Initial Coin Offerings, or ICOs as they are commonly abbreviated, were the first manifestations of bringing together a new technology like blockchain and an aspect of traditional financed like crowdsourced investments. For a long time, crypto fundraising was synonymous with ICO. Today, there might be a lot of regulated alternatives like the security token offering (STO) and the initial exchange offering (IEO). However, ICOs have retained their supremacy when it comes to crypto fundraising, largely because of its uncomplicated nature. It might have its flaws with respect to regulatory compliance but its relative ease makes it numero uno choice both for investors and investment seeking entrepreneurs alike.
It has always been a question that has intrigued entrepreneurs as to how much would be the cost of launching an ICO. These entrepreneurs, while always being on the lookout for the best ICO launching platform, do not want to compromise on the utility and quality.
What are the factors that determine the cost of an ICO? Let us read on to find out.
The influencing factors
The cost of creating an ICO is contingent upon a few factors. Any token development company will have to take into consideration these factors before promising on a cost for any company that wants to launch its own ICO.
Without question, the first factor that influences the cost of an ICO is the complexity of the project. The cost will be proportional to the number of features and functionality is involved in the project.
ICOs have been subjected to a lot of negative publicity. To address this, there have been a few regulatory compliance requirements that have been introduced. Launching a completely compliant and safe ICO will take around 3 to 6 months of time. The time taken might also be dependent on the magnitude of expertise of the core team involved in the project.
You can consider using alternatives like a white label ICO platform script. This is bound to save you a lot of time and money.
Before spending your money on technology, it would be a better idea to spend time and money to ensure the feasibility of your project. When it comes to ICOs, the cost of the ideation might not be high. However, it also depends on the complexity of the project.
You might have a team of in-house experts who will take care of this part period if that is the case, your project cost would increase gradually. This increase in cost is bound to be parallel to the increase in the salaries for employees.
The technical architecture gives a tangible form to your idea. It plays a major role in determining your expenses, and it might not be an exaggeration to say that the biggest chunk of your expenses will be attributed to the technological tasks. A lot of time is also involved in planning and research on the architecture and the different technologies that will be used to build the ICO.
Blockchain-the answer to most of the challenges
Blockchain, as we all know, is a decentralized ledger technology that assures top-notch transparency and security. When it comes to an ICO, blockchain can solve most of the problems that it faces period the basic functionality of an ICO is built on the blockchain. The blockchain can also take care of the legal aspects of your token and also help in establishing compliance. The highly secure nature of the blockchain ensures that there is no compromise on the security of your ICO.
It is quite obvious that for the successful launch of an ICO, blockchain technology is inevitable. Therefore, it becomes mandatory for any company that launches its own ICO to have a blockchain expert. They can choose to hire an in-house blockchain expert or outsource their blockchain-oriented development tasks to a Token Development Company that specializes in blockchain and the auxiliary technologies.
The resources include a research scientist, a designer and developer, a security engineer, and an advisor, with all of them having that focus on the blockchain.
Establishing legal compliance
A separate cost needs to be set aside for the legal advisory team. The legal tasks include designing the structure of the offering, the creation of the token documentation, and the KYC/AML formalities. Since the technology is relatively new and is constantly changing, the legal team needs to be updated with the latest policies on ICOs and blockchain technologies. You will require legal advisers, an in-house legal team, and a team that specializes in compliance.
Developing the token sale platform
If you have spent a considerable chunk of time in effort in developing a robust ICO, all the efforts would probably go down the drain if you do not handle the token sale with utmost effectiveness and efficiency. The token sale involves the system handling a lot of transactions.
The first step towards a successful ICO launch is the development of a landing page that leads users to the token sale platform. The investor should be able to access the KYC motives, perform due diligence, and make a decision whether or not to go ahead with investing in the ICO.
Sealing the security loopholes
ICOs have the dubious distinction of having been extremely vulnerable to malpractices. Within a couple of years between 2015 and 2017, about $400 million worth of funds were stolen from ICOs. Therefore, security is of paramount importance when it comes to assuring the success of your ICO.
Security involves smart contracts, security audits, security monitoring, and constant and consistent testing. Cybersecurity engineers and testing engineers who specialize in blockchain technology would be vital resources to address these aspects.
It is important to let the entire world know about the ICO that you have created. Practices like search engine optimization bounty programs, ICO listing sites, social media posts, press releases, advertisements, and content distribution make a major chunk of the marketing efforts. There is a certain cost associated with social media experts, content creators bounty hunters and program managers, and of course, spend associated with advertising.
Creating an ICO is a big task in itself, and a lot of questions need to be answered before embarking on the journey of creating and launching your ICO. You can take the assistance of a reputed ICO development company that will also hold parallel expertise in marketing your ICO. All you need to do is get in touch with those people, and they will take care to assess, create, and market your ICO.