Investment through Private and Public Sales - Crypto Academy / S4W6 - Homework Post for @fredquantum

Greetings from @meymeyshops to you Prof @fredquantum
To you all fellow Steemians, I am glad to be part of this week six lecture and to participate in the homework thereof. I hereby study and present my task to the class.

Question 1

What can you say about Crypto Investment and how to properly utilize the investment tools available to make the right decisions?

Crypto investment have brought about a revolution in the global financial market. It is filled with virtually speculators in their various categories of investments. Among them are the newcomers, those most vulnerable to losing their funds due to lack of proper knowledge of the cryptocurrency ecosystem. There are the next set, the HODLers, those with a palm-full of crypto knowledge but lack the strength to venture into crypto trading but would rather buy and hold cryptos, waiting for a long time in expectation of a rise in price and then exit by selling out their tokens or coins.

There are traders in cryptocurrency market, those who have gotten a good knowledge of how it works. There can predict, calculate, apply every necessary indicators geared towards hitting the anticipated profits. Among them are the short and long term traders but with the same goal of cashing out big from their trades. There are also the big whales or the Dolphins in the crypto investment world, likely they saw the future of the technology behind cryptocurrencies like Bitcoin and they grab it at once when the price was very low. You hardly know their face, they only tweet and move the market either high or low.

Having seen the adventure in cryptocurrency investment, the reality is that there tools that are programmed to assist all classes of investors. These tools are many but for the purpose of this article, I'll mention but a few and discuss only one. Let's go!

• CoinMarketCap
• CoinMarketCal
• Brave Browser
• Coingecko
• Transaction fee tracker; etc

CoinMarketCap

Whether an investor is a newbie, a HODLer or Dolphin; doing the due diligence is never overemphasized before venturing into any crypto investment. CoinMarketCap is a ready-made website aptly designed to enable anyone make a fundamental analysis of a cryptocurrency. This website have all legitimate coins listed, can give some five (5) years life of a coin health be it the maximum supply, its market performance, the rank, volume and everything one need to know about a particular project for investment.

If my interest is in investing the Monero coin, all I need to do is to open CoinMarketCap website, search for Monero and click on it in the listing. I can then check its Overview, market, historical data, news, wallets, socials, ratings, analysis and price estimate of Monero. Checking up on all the features will enable me make an informed decision before investing.

Question 2

Talk extensively about the following. Also, highlight the benefits and risks associated with each.

i. Private Sale in Cryptocurrency.

Initial Coin Offering is usually carried out in three stages, the first being Private Sale. This process is done immediately the company have put together all necessary documentations regarding the project. Then they dispatch invitations to big investors but not individuals, who after crosschecking their products to see if it meets their preference will then commit their tokens to the project. One notable thing is that the project team may if possible meet those big institutional investors in person so as to make a strong impression as to the legitimacy of their project. At that meeting, all necessary details of the project will be made open so that the project will attract high investments.

Furthermore, the project founders do set a time limit of the private sale and also the amount to be realized for the project is stipulated. They may wish to extend the time limit to allow for more private sale investments but where such amount isn't realized, they then proceed to the next phase which is Pre-sale.

Benefits of Private Sale

• The fundraisers are able to attract large investors
• The management of the project often leverages on the experience and networking of the big investors.
• The target investors have the advantage of being offered the products at a very reduced price.

Risks

• Investors capital may be pinned down in the project in case of unsuccessful listing of the token.
• Investors may totally be duped if the project developers are not real or honest.
• Issuers often do as they like with the fund so raised.

ii. Presale in Cryptocurrency.

As the second stage, normally the invitation is extended to friends, relatives and other large investors who weren't aware of the first stage. The offer given at this time is less than the private sale phase in terms of discount, bonuses and all is determined by how timely they respond to the invitation.

The mode of dispensing the offer is usually orally but then the project website as well so social medias are also used to bring potential investors to this second phase. The larger the audience, the possibility of reaching the target fund to be raised for the completion of the said project.

Benefits

• The discounts and bonuses given at pre-sale events makes for large profits to the investors so they can exit before the end of ICO.
• A successful presale can further bring in more investors in the future.

Risks

• If the project do not have a strong foundation, private sale investors might dump the project resulting downsizing the value of the project.
• Since almost all the ICO's are performed using ERC-20 tokens of Ethereum, if in the nearest future, Ethereum is seen as a threat to cryptocurrency then those tokens (coins) will be at the risk of losing their value and growth.

iii. Public Sale in Cryptocurrency.

At this point, every Tom and Dick is invited to participate in this sale but the percentage discount given is less than the two previous sales. Requirement for participation is an online registration to get an authentic Know Your Customer (KYC). This stage of sale is given adequate advertising because it is the final round of the Initial Coin Offering, and especially if the fundraising is not meeting up with the target.

Unlike the private sale where there is limit of investment packages, in the Public sale round, there is no limit except investing the lowest minimum token. One good thing here is that investors have free access to investments but their discounts are dependent on their level of contributions or commitment in the process.

Benefits

• There is little barrier to participate in crowdfunding
• The fundraiser can raise money quickly to build up his project since the whole world is at his disposal for investing.
• There is no need for strict requirement for disclosure of fundraiser's documentation.

Risks

• There is higher price volatility due to manipulations by the whales resulting in outright loses to the poor investors.
• Since the tokens are not listed anywhere in the crypto market, one may just be committing his fund to an idea not real product.
• Any loss arising from the investment may not be recovered as there is no regulatory body to report to.
• Offerings given at a reduced price which is at the expense of the company.

Question 3

What are the mediums used for Public/Pre/Public Sales in Cryptocurrency?

There are many medium for the ICO events among whom are:
1). The project website: Here all potential investors are expected to connect their wallets when and then exchange their already owned coins with the new coin.
2). Holding a personal meeting with potential big investors: The coin developers book a meeting through word of mouth with some known big watts, during such meeting, these investors have the chance to peruse the value of the coin, giving them ample opportunity to receive lowest price.
3). The project's social media handle: It is easy, faster and cheaper to reach to massive number of potential investors by using the developer's social media handle. People can bargain with the issuers for a rock-bottom price earlier before the ICO event.
4). The Launchpad: These are exchanges that have listed the new coin and have made their technology available for for the issuance of the new coin to the public. Before this development, the exchange must have verified the project, crossexamine all its features and accept to offer the ICO services to the developers.

Question 4

Research about any recent (2021) successful ICO or IEO and give detailed information about the project. (Note: BETA token is excluded)

Source image

I choose Divergence - a decentralized trading platform for derivatives. It is a 2021 coin that was listed on CMC on 20th September, had its auction sale in Shushiswap Launchpad. It had a supply of 1,000,000,000 DIVER tokens, with the goal of raising fund to the tune of $2,000,000 from 20,000,000 tokens mapped out for Private sale at the ICO price of $0.1. There was no minimal or maximum commitment in USDC.

Another strategy employed by Divergence is to launch their LBP (Liquidity Bootstrapping Pool) a Public sale event, mapping out 30,000,000 DIVER tokens paired with USDC. It was held on 27th and 28th September - a 24hr updated IDO. It was a huge success as they were able to raise another $6,600,000.

Were they successful? Their performance since the end of their ICO shows so. The price of one (1) DIVER has increased to $0.16 as shown in the chat below:

What problem does Divergence set to resolve?

Divergence is looking at providing diverse solutions to hedgers, speculators and liquidity providers by creating a marketplace based on Automated Market Maker (AMM) for buying and selling synthetic products or derivative tokens. Divergence's approach is to design a DeFi ecosystem that is easy to use, scalable and takes care of the immediate desires of traders of the three categories above mentioned.

The platform is designed to enable binary option trades, it is composable, meaning that traders can create trades with derivatives minted in Divergence as well as tokens from other protocols. Traders capital are protected from too much collateral, they are only charged a one-time collateral fee after a pool is created. There is also a continuity of pools created even after the circles have expired, reason being that pools for binary options are automated.

Benefits of Divergence

• ability to manage trade risks associated with asset prices and rates of interests unlike other protocols
• speculators of volatile assets are able to make and take profits from trades due to Divergence price algorithm.
• payouts from betting events are customized

Question 5

Create an imaginary token. Write about the project including its use case. Develop an ICO which includes Private sales (3 stages) and Public sales (1). Note that: You are expected to explain what the funds are intended to be used for, your Private sale should have 3 stages, and specify the initial supply available, and the price you are issuing the token in each stage. Also, specify the price you are issuing the token at the Public sale phase (including the supply)

Introducing the Meymey Token (MEY)

The idea of creating this token is to proffer the going concern of cryptocurrency traders in relation to privacy of transactions and security of funds. The Meymey team is designing this platform to be an open-source protocol but with cryptographic encryption algorithm that will eliminate any third party to a transaction through the generation of private and public keys for encryption and decription of transaction messages. The protocol framework is built on Proof of Activity (PoA) consensus in making sure that all miners really are at work and that they actually performed verification and authentication of transactions based on consensus. This kind of algorithm is a beneficiary of both PoW and PoS. The reason for choosing this type of algorithm is to have added defence mechanism for the protection of transactions.

Due to its heritage of PoW and PoS consensus, the cost of MEY token will be reduced, validators that are at fault will be tolerated using the Byzantine Fault Tolerance. But the paramount usefulness of this MEY token built on Proof of Activity (PoA) is that intending attacks on the protocol is drastically reduced to 0% because it requires 51% of same validators to sign twice before an attack is launched but this is impossible.

Compatibility

MEY coin will perform well along with Decred (DCR) and Espers (ESP) whose protocols are built on Proof of Activity (PoA) and are all performing well in the market better than BTC with regards to USD pricing.

Use cases

• The MEY token will be used as a store of value and a payment token.
• The MEY coin will be used to reward miners for their work of validating blocks in the protocol.
• It is going to be useful in rewarding fitness lovers around the globe.

Maximum Supply: 40,000,000
Tokens for sale: 20% = 8,000,000
ICO Price: $0.1
Expected fund raising: $800,000

An anticipated $800,000 to $1,000,000M is to be gotten from the fundraising event to enable the MEYMEY token project complete its blockchain network so as to come live for listing. The team is looking at having the coin listing come January 15th 2022.

The three rounds of our Private Sale are as follows:
Private Sale 1
Kickoff date: October 20th - 23rd
MEY token price: $0.1
Token for sale: 25% = 2,000,000M
Fund to be raised: $200,000

Private Sale 2
Kickoff date: October 24th- 27th
MEY token price: $0.15
Token for sale: 25% = 2,000,000M
Fund to be raised: $300,000

Private Sale 3
Kickoff date: October 28th- 30th
MEY token price: $0.24
Token for sale: 25% = 2,000,000M
Fund to be raised: $480,000

At this stage of event, fund realized is very substantial, to that end the next round will be the final phase which is Public sale.

Public Sale
Kickoff date: October 31st- 2nd November
MEY token price: $0.27
Token for sale: 25% = 2,000,000M
Fund to be raised: $540,000

Following the agenda above, we the MEYMEY team are hopeful to realize a total of $1,220,000M from the ICO events. This amount is expected to be enough to complete to the finish the Meymey blockchain network to enable us fully go live on the 15th of January, 2022.

Question 6

What are the criteria required for listing a token on CoinMarketCap. Is there a criteria for listing an asset on a Centralized Exchange? If Yes, use an exchange for your explanation in response to the question

To list a token on CoinMarketCap, the following requirements must be met:

• whether it serves as a store of value
• whether it can used as a mode of payment
• whether it is actually decentralized
• the architectural design and its consensus algorithm must be in harmony with cryptographic rules
• the coin website must be accessible to navigate through block explorer
• is such coin been listed in any CoinMarketCap exchange, then what exchange is that?
• it must have a means of communication that is functional through which CMC can relate with the project management as timely as possible.

To further clarify the above criteria, listing a coin in CMC requires that an online form provided by CoinMarketCap must be filled by the CEO of the project. The contents of which must be well arranged with all the features of the coin well stated which include the purpose of the coin; its consensus algorithm; its value; whether it has been traded in any exchange visible in CMC as to have been seen as a feasible project. Having the project head filled this form is essential so that he or she would be communicated to at any point of need. So the communication line should be functional at all time.

It is imperative too that the coin requesting for listing should be active in trading activities in any one of the listed exchanges. The essence is that it is a prerequisite it will undergo to be acceptable for listing. Then too is followed by a verification of the coin trading data, if found wanting, then it will not be acceptable. All these requirements must be followed and of course CMC will be tracking the coin to ascertain its compliance.

To have a coin listed in a Centralized Exchange - Binance

There are criteria for that goes with listing a token in a centralized exchange. I will be using Binance, the largest centralized exchange to show those criteria, thus:
1). The developer of a coin should directly apply for Binance token listing.
2). The application must clearly state all information about the project.
3). The application is expected to be detailed by the CEO of the project so that he/she can answer any question put to him/her regarding any bugs, double-spend or any issue of irregularity noticed in the project.
4). Regular weekly or monthly progress of the project report is of paramount importance.
5). The applicant is expected to promote Binance tokens (BNB/BUSD) in its community as well as during the project's initial coin offering phases.
6). The project team is not expected to request for a contact person whom he may be communicating with in the interim.
7). Not to dispatch the white paper to the Binance CEO but provide a link to the white paper etc.

Conclusion

The two prominent points of this article centered on the talk about Crypto Investment and ICO events. This research has dealt well on these aspects by letting us know categories of investors including the newbies, the HOLders, the traders as well as the big influencers or movers of the crypto markets. We have also seen the need to verify information accurately by using investment tools like CoinMarketCap to determine whether to invest in a certain crypto or not.

On the part of the ICO events, we have been able to explain the first three phases of an ICO as well as the final round which involves the general public with no limit to investment. We have equally understood the essence of ICO as being to raise fund for the completion of a coin project development.

Thank you very much Prof @fredquantum for this lecture. I hope to receive your mild hearted review.

I remain yours truly,
@meymeyshops.