ICO teams continue to grow in number in recent years. However, not all of these teams were able to succeed in making a successful ICO token. ICO tokens come in different types and names. If you plan on making your own ICO token, it is best that you know what the token is really all about.
ICO tokens are products that have a specific value assigned to it. Usually, when giving value to a token, the creator assigns an equivalent to it. One token can be equal to a certain monetary value or service.
In Making an ICO Token
Making your own digital token is a big leap in creating an ICO. An ICO is a fundraising project that usually funds ICO projects in exchange for the cryptocurrency. Many platforms like Stellar and Ethereum allow traders to create their own cryptocurrency. It also helps to have your own blockchain in making your ICO token.
Make sure that you are able to address the questions below. to help you scale the success rate of the ICO token that you plan on making.
• What is your business’ overall goal?
• Can your business profit from using blockchain technology? How?
• Is it necessary to have a token system for your business?
• What value does this token give to its users?
• Does it conform to all the legal requirements of an ICO token?
• Can you list your token in a cryptocurrency exchange?
• Do you have competitors? If so, identify them and their products.
Types of ICO Tokens
In creating your own ICO tokens, you also need to classify what type of ICO token it should be and the purpose it will serve. There are three categories for ICO tokens:
Equity tokens are the newest type of tokens in the market. These tokens are similar to investment shares in IPOs. Investors get Equity Tokens in exchange for the money that they invest. In addition, these tokens allow the investor to vote and decide on matters relevant to the ICO Company. However, Equity Tokens do not have clear regulations and can be a high-risk investment.
You can issue Security Tokens for almost everything. They are often used on products that are tangible. They are used to tokenize properties and other material assets. Many ICO companies often offer this type of token. Security tokens are covered by strict security regulations. Make sure that you take the time to read and study these regulations if you plan on issuing them.
However, before you start dispensing and creating Utility Tokens, be sure that they pass the Howey Test. The Howey Test helps you determine if your Utility Coin is able to meet the security requirements mandated by the government. Utility Tokens play an important role in a blockchain application or platform and allow users to enjoy special benefits from it.
Initial Supply of your ICO Tokens
ICO teams usually decide on the number of tokens that will be made available in the market. They also have a say on how these tokens will be distributed. Down below are some of the options on how you can create a number of digital tokens to be released and how they will be distributed:
- ICO Sale
- Private Sale
- Pre-ICO sale
- Post-ICO sale
Furthermore, you have to allocate tokens for your advisory board and ICO team. You also need to set aside a number of tokens for your business reserves and expenses. Having a specific amount that you want your tokens to reach also helps determine the initial supply of your digital token. You can set a hard cap and soft cap on the amount that you want to raise.
How to create your ICO token
Many ICOs often use Ethereum as their primary platform. It doesn’t take a lot of time in creating a digital token on Ethereum. It usually takes about 20 minutes to issue tokens through the platform. There are also other alternatives that you can use in creating tokens. There are times that Ethereum networks would set a limit to their platform transactions. You can also use other platforms like Stellar to create your own cryptocurrency.
In making an ICO token, always take into consideration the uses and types of the tokens. In this way, it will be easier for you to conceptualize and scale up its functionality. Always remember that a worthless coin is easily replaceable in the world of cryptocurrency trading.