A year ago, everyone seemed to be running or taking part in an ICO (Initial Coin Offering), with a grand total of year-round funds amounting to almost 5 billion dollars.
If you’re reading this, you’re probably interested in starting an ICO yourself, or at the very least, participating in one. Useless Ethereum Token, which raised $200,000 despite it likely being made by a single person in minimal time, are the exception to the rule, as your project will probably require a dedicated team and a substantial amount of time in order to raise the necessary funds.
But first, a disclaimer: successfully hosting an ICO from scratch will be quite costly. The approximate costs for launching a campaign can vary depending on what type of project you’ll be running and its distinct goals, but it will cost around $60,000.
Another factor to consider is how much time this can take. Usually, the pre-public engagement phase will range anywhere from six months to a year, and will comprise everything that happens prior to the first big announcement.
The post-public engagement phase will take about three months, and will involve everything that happens between the first announcement and the actual sale of tokens. This span of time will be long for your project to catch the public’s eye, but short enough for them to keep it in mind.
As far as your team goes, there isn’t a hard-and-fast-rule for how many people you’ll need to be involved. What is essential here is covering each area of expertise needed, instead of hiring as many people as possible. This will most likely include developers, Blockchain and cryptocurrency specialists, PR and marketing as well as advisors, partners and early investors.
There are no rules set in stone in the realm of ICOs. The future of value tokens will be supported by nothing but demand, so competition will be fierce.
This guide will take you step-by-step through every stage of the process of launching your own successful ICO.
1. Think of an idea, make it thorough, and ensure your project really needs an ICO.
Your project has to offer a solution in order for it to be successful. This solution has to cater to current market needs, and it should be objectively better than anything offered by your competitors. Having a thorough understanding of the market is going to help you, but you’ll also need to know your target audience. Most importantly, you’ll need to know what exactly they’ll be willing you give you money for.
If your project’s funding comes from an ICO campaign, it’s going to have its own token. Currently, there are over 1500 cryptocurrencies in the world, according to CoinMarketCap. Amidst this competition the survival of your token, let alone its ability to gain value, will depend on how high demand will be. Achieving this will mean integration of the cryptocurrency into the project substantively, making it an absolutely vital part of the product.
Tokenization isn’t always necessary. If your project uses it when it doesn’t need to, there’s a high likelihood your investors will not even consider putting their money into the project.
You can try test running your idea for some initial feedback by creating a thread at BitcoinTalk forum with the tag [pre-ANN] for pre announcement.
2. Understand the competition.
What exactly will you be competing with? You might think any project offering services similar to yours is competition. However, you’re actually competing against each other for the investors’ money. So, in reality, you are up against everyone else. Literally every single ICO being held at more or less the same time as yours.
3. Do some research on legal requirements, and ensure ICOs are legal in your country.
The most regulated aspect of cryptocurrencies at present is the ICO. This is simply a result of the high volume of ICOs that shut down and run away with collected funds, or end up being exposed as scams. Despite this however, Initial Coin Offerings are either legal, regulated, or subject to future regulations in most countries. So far though, the only countries that have banned ICOs explicitly in their respective jurisdictions are China and South Korea.
As far as the US goes, any income earned and wealth held abroad should be fully disclosed by citizens to the IRS. ICO’s that are not compliant with the strict Know-Your-Customer policies of the US Security and Exchanges Commission will be prosecuted by them. As a result, an increasing amount of projects including Goldmint, Monaco Visa, Datum, and countless others have made sure that US citizens are explicitly exempted from buying their tokens.
In any case, learning how to deal with the current regulations on cryptocurrency is essential, and you’ll have to stay up to date on any changes to those regulations in the future. This might seem obvious, but it is important that you break no laws. Keeping a lawyer who is experienced in cryptocurrency and ICO regulations will come in handy.
Although, you should keep in mind that any suspicious behaviour on your part in terms of handling investments could result in your project being labelled a scam by the cryptocurrency community, even if you’re not breaking any laws. In the event of this happening, your ICO will be doomed to fail.
As a result, you will have to do more than just obey the relevant laws and regulations. Absolute transparency will be required on your end when it comes to handling other people’s money. Expenditure, taxes, fiat withdrawals, and all other financial aspects will have to be meticulously thought out.
4. Creating an ICO token
Now that communication with your preferred blockchain of choice has been established, what are you going to do with it?
You can see your project as a human being. Its skeleton is the technical architecture that supports its entire body. The blood vessels are the blockchain technology and the token itself, which contribute to keeping the body fully functional.
First off, you’ll need a foolproof distribution plan, which will depend heavily on the particular requirements and plans of an ICO. For example, the token sale can have many different stages, including but not limited to a private sale, pre-sale, the actual ICO and a general sale.
For different ICOs, you’re going to need different structures. In 2013, NXT raised $16,800 worth of Bitcoin through simply collecting donations via the BitcoinTalk forum to an anonymous wallet. A point of interest here is that even after all these years, NXT’s ICO is still number one when it comes to Returns of Investment.
On the other end of the spectrum, we have Telegram. They raised $850 million during quite a secretive pre-sale, and are now apparently gearing up for a second round of pre-sale, on track to double the amount of investments before the actual ICO even happens.
Moving on, you’ll also need to outline clearly the way in which tokens will be distributed. Make a decision ahead of time on the number of tokens to be issued in total, the number of them to be distributed amongst team members, and the number of them to be sold at each stage of the token sale. Finally, make a decision on the exact situation in which additional tokens will be issued.
In terms of issuing tokens for ICO’s using blockchain platforms, market competition isnt too much of a problem. ICOWatchList says 81.7% of all projects use Ethereum, while the remainder of projects prefer custom blockchain platforms. Alternative services like Hyperledger, Stratis, and Waves, but even their share of the market adds up to only 3.7%.
It’s a comparatively easy to create the token itself, especially Ethereum’s ERC20 tokens. The code you’ll need to use is even listed on Ethereum’s website. Although, trying to customize specific aspects of a crowd sale logic for your tokens might be slightly harder, so it might be best to hire a professional if you aren’t exactly tech-savvy.
5. Write a White Paper.
A technical document that describes your whole project in every conceivable detail, the white paper ideally should cover literally everything. Market analysis, your vision for the project, development strategy, architecture and goals, information on and distribution of the token, legality, available resources, a team description, early investors/advisors, etc.
Obviously, not every potential investor is going to carefully read through a detailed technical description of your project. Ten people might read the entire thing. Yet it’s these ten people that you’ll have to satisfy with the white paper, because they will be capable of bringing on significant issues to your ICO.
Enthusiasts of the Blockchain have a vast understanding of the technical aspects and a great deal of expertise. Immensely valued and held in esteem within the community, they are opinion leaders with audiences that number in the tens of thousands.
If you plan on running a significant PR campaign, but the project has a few glaring flaws, these people will not miss their chance to reveal them to the public.
6. Launching a Website
Content
There are three things that people will stay focused on: the team, the aims of the project, and the measures ensuring protection of investor interests that you’ve put in place.
On Nuvu’s website, one of the first things you’ll see is a thorough breakdown of token sale structure. This doesn’t just present information in a way that is easily digestible, but also successfully creates FOMO (Fear of Missing Out).
The section of your website dedicated to The Team should contain their names, high-definition pictures, short biographies (use this to focus specifically on their relevant skills) and social media links. Make the project personified.
The roadmap is another vital section of your website. This should feature practical and clearly written goals as well as set timeframes. If a few big milestones on your roadmap are already checked off the list, this will instill a great deal of confidence in your investors.
It would be ideal if your timeline includes dates for alpha, beta, and public release, and any further milestones you feel would be relevant. Don’t make the dates vague, instead be as precise as you can. A breakdown of the costs linked to every specified task would also be a good idea in the roadmap.
The roadmap can take on various forms. They can contain both history and future plans and set dates by quarters in a concrete manner.
The last thing to consider here is if all information pertaining to distribution of tokens is completely accessible to future investors. They should know what fraction of the project’s currency will be distributed amongst those on the development team, and how much will actually be available for purchase.
Usually, social media links for the project will be listed at the bottom of the website. Of course, there can also be clever exceptions and more creative placement.
Layout
Once all content is ready for publishing, spend some time to think through the websites layout. The overwhelming majority of projects are currently going for single-page structure. It’s undoubtedly convenient and has incredible ease-of-access in its presentation of all relevant information in the precise order it has to be in. In any case, only you can decide which structure will be best for your project’s website.
Security
The one thing you definitely won’t like for your website is for it to be down at any point in time. Provided it gets enough community attention, thousands of people will be flocking your website once the ICO starts, all at the same time. In this situation, the last thing you need is a crash, so ensure that you’ve invested in a dependable hosting service.
Furthermore, any project running an ICO has to face the very common threat of hacking and DdoS attacks. In many cases an official website gets hacked, replacing wallet’s addresses. The investors, unbeknownst to them, would end up sending money to scammers.
Additionally, ensure that all the necessary precautions against phishing attacks have been taken, especially if you’re running a substantial PR campaign. Fraudsters will commonly combine DDos-attacks with all-out spam attacks on all possible social channels, usually with messages like “our website is temporarily down, use this link instead”.
Design
The design of the website should reflect the nature of your project; reliability and a sleek yet welcoming look is essential. The smallest error in something like formatting will demotivate investors. Hiring a professional to undertake the design of your project’s website will be a worthwhile investment.
An ideal website will usually feature a subscription form, presentation video, Roadmap, description of ICO, the team’s photos, bios, and social media links, press coverage, product description, real-life cases, documents, partners/early investors, and contact information.
Translating
If a project is to be truly global, your website will have to be translated into the target audiences’ mother tongues. The languages considered most useful when it comes to ICO’s are Chinese, Japanese, Korean, Russian, German, French and Spanish.
Keeping in mind that a successful ICO is $60,000 if you start from scratch, only a comparatively small amount of cash will be needed for translations. A professional or agency will charge anywhere from $150 to $300 for translating a 25 page white paper.
Do not hesitate to hire professional translators, because even the smallest of mistakes can cost you investors, and can make you seem unprofessional.
7. PR and Marketing
Once you’ve created an idea, organized a team, written a white paper, created the token and ensured your ICO does not break any legal requirements, you’ll now have to promote it. Without this step, any chance of making money is completely lost.
This means you’ll need a sizeable amount of funds to be spent on marketing. Paid information listing can fluctuate between $400 and $15,000, or even beyond. Investing in a good community manager to oversee the project’s social media will cost about $2000 a month or more
Paid ads will have to be used to the fullest advantage. This will include Google ads, forum ads, etc. A sufficient userbase of competent investors will cost you about $5000. Also, take note of how much money or tokens you’re willing to offer to bounty programs should you involve them in the PR campaign.
Just as you did with website design, planning a PR campaign will require you to view the project from the perspective of a potential investor. Think about how and where your audience will learn about the project from; especially how it’s going to be presented to them.
The entire market right now is propelled forward by one single force- FOMO, The Fear of Missing Out. Investors are going to flock to your venture only if the hype around it is so large that it convinces them that they’re missing out on a once-in-a-lifetime opportunity.
Сonstant Communication
Your team and the investors will need to be in constant communication with each other, whether it’s before the ICO campaign, during, or after it. The more channels for communication you use, the better your project’s chances of success will be. Social media platforms like Twitter and Facebook will be good channels, as well as forums such as BitcoinTalk and Reddit.
Be a Part of the Community
These are some ways of engaging with the cryptocurrency community:
Forums: The backbone of your PR-campaign. In the past, most ICOs were held on Bitcoin forums. BitcoinTalk is what you should focus on most, as it is the biggest and most popular platform at the moment, especially when new cryptocurrencies are announced. Of course, don’t forget other forums like Bitcoin.com, AltcoinTalks, BitcoinGarden and many more.
ICO calendars: People should stumble upon your campaign. Lots of ICO calendars enable potential investors to track upcoming ICOs; take full advantage of services like this. Notable examples are calendars by CoinTelegraph, TokenMarket, ICOAlert and many, many others.
Reddit: Pay very close attention here. Reddit has over 40 subreddits devoted only to Bitcoin, and it might be the most active social media for cryptocurrencies. There are also multiple subbreddits dedicated to altcoins, as well as some that only focus on ICOs, like r/icocrypto (active and upcoming ICOs), r/ico and r/ICOanalysis. Also, ensure that you persistently monitor the platform and make use of the search bar to find and track threads about your project and it’s ICO. Actually looking for people’s questions and providing answers to them should play a large role in your marketing campaign.
Quora discussions: This is built around users asking questions and recieving comprehensive answers to them. The best move here is to not just let others discuss your project, but to directly answer questions. Similar to forums and Reddit, proactive communication will go a long way here.
Slack & Telegram: These are the most widely adopted by the cryptocurrency community. Crucially, both services enable setting up channels, an extremely useful means for updating your audience. You can also set up a chat for potential investors to communicate and discuss the project. The more open you are, the more funds you’ll attract. Also, use existing channels and chats to further promote the ICO.
LinkedIn professional groups: Since your project’s website will link to team members’ LinkedIn accounts, this service becomes an essential tool for promotion and instilling confidence in potential investors. This is where you can show them how deep your project's roots are in the community. There are also professional groups like ICO Launch group, ICO group and many more for discussion and promotion.
Facebook groups: For many people, this might be the easiest way to reach out to a startup. However, paid promotion can’t be used here anymore since Facebook bans all cryptocurrency and ICO-related ads. Yet, there are many dedicated groups that can promote your campaign. Also, keep in mind that Facebook is quite international and you might run into a lot of language-specific groups, which will help to promote your ICO as well.
Mailing Marketing
Use a weekly email to keep people updated. The reminder for your ICO’s start date can come a month, week, day, or five minutes before it commences. However, don’t force it on anyone and definitely avoid ending up as spam by sending too many emails.
Bounty Program
At present, many ICOs offer bounty programs. These entail financial rewards for PR-activities conducted by users. This means paying people to promote your ICO on forums, while maintaining language-specific threads on various platforms, translating and localizing documents, social media posts, blogs etc.
While this approach can be quite advantageous, try to not go overboard with it. Experienced users can effortlessly spot posts and publications that are paid-for, and if word gets out that your project exploits bounty programs, community suspicion is inevitable. Ultimately, no one likes an aggressive PR campaign, and your product should manage to sell itself without desperate attempts at paid promotion.x
Important Warning
A successful campaign will advertise through any means possible, ensuring maximum reach within the community. It is most important that you and your marketing team are extremely careful with each publication, post or reply.
Even just a couple of forum, subreddit or social network users who mildly suspect your ICO is a scam can heavily affect the outcome of the campaign. Potential investors will carry out rigorous checks on your project, and will not miss negative opinions on it. This kind of risk cannot be afforded by any ICO, so always make sure you choose your words carefully.
Remember, the community branding your ICO campaign as a scam is the worst outcome possible.
8. Launch an ICO
Your Initial Coin Offering is finally live! How long should it last for? Here are some successful ICOs:
Mastercoin (now Omni Coin): ICO lasted one month, raising about $750,000 worth of Bitcoin
Stratis: ICO lasted 36 days, raising almost $600,000
Ethereum:Token sale lasted 42 days, raising $18 million
NXT:ICO lasted 51 days, raising $14,000
Waves:Token sale lasted 49 days, raising over $16 million
Taking these numbers into consideration, simple math will lead us to an ideal duration of 41 days for a successful ICO. Yet, this is only an average based on just five campaigns and is not a golden ratio of some sorts.
But this does reflect current market trends to an extent. This timespan is long enough to generate FOMO and hype, attracting more people and investments, without being so long that investors don't see actual results and a potential for the project to move forward.
One tool that will be of the utmost importance in any cryptocurrency-related project is Communication. This is especially the case during the ICO. Specialists should ideally be involved in every aspect of the project on round-the-clock duty. Keep in mind, this will be a major milestone in the history of your project, and many will be eager to ask questions before they contribute, or simply seeking guidance on how to do so.
Having security specialists on call at all times is extremely important. Your website is vulnerable to attacks at any point in time. An example is Coindash’s ICO; on the very first day of their ICO campaign, their website was hacked, resulting in a loss of $7 million.
What Happens After an ICO
When the community delivers, the ICO is a success. Once the campaign has ended, it’s the project that must now deliver. This is the point at which tokens must be distributed, and the roadmap is followed as planned. Try your best to deliver as much value as you can for both customers and token holders.
This is only really the beginning, and the ICO was just the easy part. Now that the necessary funds have been raised, the end product’s development should start, or even better, continue, on a much larger scale. This is the moment where your project not only possesses the funds it needs to achieve its goals; it also has a moral and financial obligation to not let investors down.
List Your Token on Exchanges and Token Listing Platforms
It is obviously good to fine tune the product, make your dream of successful entrepeneurship a reality, and make the cryptocurrency community a better place through the development and integration of your project. Meanwhile, however, your team and investors will expect one thing only: making everyone rich.
To achieve this, your token will have to be in high demand, valuable, and most of all, listed on at least one cryptocurrency exchange. Different exchanges will have different requirements, but as long as your project is unique and offers something truly valuable to the community, you should gave no problems getting in.
Poloniex, an exchange that is among the biggest and most well-established, has this on their website:
We don't have a definitive set of criteria as each project is unique. We listen to the community and select projects that we believe are unique, innovative, and that our users would be interested in trading. We also look for products that have strong (organic) market demand.
Binance, the other big exchange, has a team solely for reviewing applications for new tokens waiting for their chance to be listed. Lots of other exchanges are going to ask that your token prove its worth in similar ways.
Here are some basic characteristics of a coin that is eligible for being listed on an exchange:
Coin name- Either the same name as your project, or something very similar.
Coin trading symbol- A three-letter ticker representing your token forever. The amount of letter can sometimes go up to five, with no numbers allowed.
Description of your project and its token- List every exchange you hope to get the token on with a clear mission and pitch for the coin. Why would they want to list it? What makes your token different to hundreds of other coins floating around?
Coin logo- A slick and memorable logo for your token. Think Bitcoin’s instantly recognizable orange logo. Most exchanges accept logos in PNG format with a transparent background.
Launch date- The ICO campaign’s very first day.
GitHub link- Most exchanges require source code before they can even consider listing the coin.
Project audited by trusted entities- Source code reviewed by a trusted third party. ex:- Certik
Compliance fee (in some cases)- Some exchanges may require a compliance fee before your token can get listed on them. Bittrex, warns its users that a $5,000 fee might be charged, however, they seem to have scrapped that rule since then.
If you’re not sure which exchange you should apply to, this brief list of the biggest ones in terms of trading value should help you get started:
Top Exchanges to List Your Project
Bitfinex,Bithumb,Bittrex,HitBTC,bitFlyer,Poloniex,GDAX,Kraken,Bitstamp,Binance
Top Token Listing Platforms to List Your Token
CoinMarketCap, Coingeko, Nomics