Hello guys, today I am here to share with you my Homework on Initial Coin Offering(ICO) given by professor @imagen.
I'm glad to have learnt something new from the crypto professor @imagen.

ICO(Initial Coin Offering)

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ICO or also sometimes called Initial Currency Offering is a type of digital fundraising which involves the use of cryptocurrencies to fund the development of a new token. It maybe either public/crowd investment or seek for private investment. Investors purchase the newly developing tokens or coins with a more stable crypto currency such as Bitcoin or Ethereum so that the tokens are promoted to become fully functional currencies. And when the goal or level of promotion of that particular token is met, it is then launched as a successful project.
According to wikipedia The first token sale (also known as an ICO) was held by Mastercoin in July 2013. Ethereum raised money with a token sale in 2014, raising 3,700 BTC in its first 12 hours, equal to approximately $2.3 million at the time.

Guidelines you should note before involving in a project's token at the ICO stage ;

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The White Paper
This is a document that each company or project provides to its investors and it contains the plans set in place to make a particular project a successful one. It helps readers to understand and make decisions about the project.
When reading the whitepaper you should take note of certain information such as;

1. the road map and description of the project
2. Problems facing the project and the solutions they have come up with to solve them.
3. How the ICO funding is done ( token scale).
4. Technical details of the project
5. The team involved and what they are specialized at ( you should do a background research on the developers of that project)
6. Most of all, why do you need to invest in that particular project

The Team
When thinking of investing in an ICO, you should always do a thorough research and learn about the team behind the project. You must not rely on what you have heard about them only. You should learn more on your own about the team, that should be able to convince you in making a decision as to whether you should invest in the project or not. Some of the key features you should check is their expertise ( do they have any knowledge of what they are doing?, have they ever been involved in such a project?). This may as well as make you sure of the security of the project, whether your funds are safe with them or not.

Differences between ICO(Initial Coin Offering) and IEO(Initial Exchange Offering)

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First of all, let's talk a bit about IEO( Initial Exchange Offering). This is also a way of raising funds by selling tokens to investors. But this particular type involves the use of a third-party system in raising funds, a cryptocurrency exchange platform as the name suggest. So to put things simple, IEO are constructed on a crypto exchange platform. However in IEO you have to be a registered user of the particular exchange platform that is being used in order to make any contribution. Also a percentage of tokes that are sold goes to the exchange platform before the lunch of the IEO, which means that, it is some kind of partnership. Mind you, there are additional fees paid to the exchange platform too. Since IEO is more secure than ICO, IEO has become more popular than ICO which attracts more investors.

1. The first thing to talk about is transparency. With IEO, the company provides full information about each member of the team involved in the project and a detailed information of the company. Their identities a verified through a KYC procedure as well. This will make it difficult for fraudsters to use the fundraising idea for their own gain.
   On the other hand, with ICO there is little information acquired about all team members of the company. There is simply a "whitepaper" created about the company. With this, it makes it possible for anyone at all to lunch an ICO and make money. Fraudsters and scammers may use this method to raise money and run away with it.
2. With IEO, it leads us to Centralization. Because of the involvement of crypto exchanges in IEO, more users use it and which in turn raises more funds than the others. But since ICO does not involve any third-party, their reputation is low which makes it difficult for more users to join. As a result less funds are raised.
3. Token sales in both ICO and IEO occurs in a very short time(could occur in few minutes), this may leave many investors unable to take part in the token sale. However, both ICO and IEO have come up with their own solutions to that problem.
   ICO has this idea of giving discounts to early investors and the amount of discount an investor is able to acquire depends on how early you join the the project.
   IEO on the other hand randomly give tickets to investors which can be used to purchase tokens. To be able to win a ticket you should make more contribution to the project. Which means that, the higher your contribution, the higher your chance of winning a ticket and buying more tokens. Foundico; Binance Launchpad site came up with this solution during the IEO Matic Network (MATIC)

Summary of the differences between ICO and IEO

ICO	IEO
It is highly risky	It is more safer and reliable.
Does not involve a third-party system	Involves a third-party( an exchange platform)
No verification needed to engage in the presale	KYC procedure used in verification.
Tokens are given to early investors in the form of discounts	A ticket is acquired randomly to purchase a token.

Advantages of ICO

1. Investors acquire early access to their token before it becomes enlisted on crypto exchanges.
2. It does not require a KYC verification in order to make a token purchase.
3. Provides readily accessible funds for startup companies or investors since it opens a gateway to investors from all economic levels.
4. Buying tokens are cheap and it could in turn raise large significant profits.

Disadvantages of ICO

1. It doesn't usually follow any form of code of rules or protocol. And if an investor fails to make adequate research about the project, this could be of high risk in investing in such kind of projects.
2. ICO is volatile and this is because of various its exposure to several factors that affect their market value. This could subject the ICO to a rapid rise in the value or a huge decrease in the market value as well causing loss in the investment.
3. It may also lack accountability since many of the ICO companies do not have adequate funds to startup their own projects. As a result, investors might not get the returns of their contributions to the project.
4. Another big disadvantage in contributing to ICOs is that, they are vulnerable to hacks which may leave investors with nothing.

Pi NETWORK

A screenshot of Pi lunching from my phone
Pi is an ICO that is made for anyone at all as it easy to earn. You can start earning Pi by mining it on your phone as well.

A screenshot from my phone showing the Pi Network interface(the topmost part of the picture is the amount of Pi I have mined)

To start mining, have to click on the lightening button. Mining is boosted hourly by inviting other people to join. You can also boost your mining rate by building your security circle. Keep in mind that, the more you invite people to the community the higher your mining rate and the people you invite become your own mining community. Individuals who joined at the earlier stage have more higher mining rate than those who join recently.
Another interesting thing about the Pi Network is that, you don't need to open the app and stay on it for mining to go on. You can open and leave the app after hitting the lightening button and mining will be ongoing.
The Pi Network is aimed towards building the most powerful peer-to-peer marketplace when it reaches the maximum number of users, that is the stage three of Pi Network. The date isn't fixed for Pi Currency to be lunched yet.

Thanks to professor @imagen for this great lecture. I hope to learn more from your subsequent lectures.