Hello, Steemians. It feels nice to attend another lecture at the crypto academy. I've attended a lecture by the Steemit crypto professor
@imagen where the professor lectured on ICO "Initial Coin Offering". Now, I will solve the task associated with the lecture.
What to know about ICO (Initial Coin Offering)
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ICO is a short form of " Initial Coin Offering" and just as we have initial in it, which means early, then I can say Initial Coin Offering is the act whereby a crypto company set up an early sale for a new cryptocurrency which is still understand development on the blockchain to allow different investors to put their resources together to buy some portion of the new cryptocurrency.
New projects (crypto) on the blockchain often pass through this process which enables the company handling the project to raise funds that is needed for the effective running of the crypto on the blockchain and this is done through an early sale by inviting investors to buy some of the new cryptocurrency at a lesser price.
Like I highlighted earlier, ICO is projected to help the company that owns a new cryptocurrency project to raise the funds needed to take the project to completion on the blockchain and on the other hand, investors comes in to be of help the company achieve their goal by buying some of the tokens at a low price which can turn out to be a fortune in the soonest time.
Most ICOs have a public notice on their website to show investors the level of the fundraising, how much they have raised and its percentage. A good example is the Safemoon project. The screenshot below shows the level of how much the fundraising of the project has received.
Safemoon fundraising progress
Highlighting differences between ICO and IEO
IEO (Initial Exchange Offering) nearly have a close feature of operation like the ICO but coin offering is done by exchanges which differs from a direct sale by the issuer. In short, Initial exchange offering (IEO) is a form of ICO which is carried out by crypto exchanges, whereby the exchange and the issuer of the coin would have reached an agreement and the tokens will be made available to investors or traders for a pre-buy before the coin is fully listed for trading on the exchange.
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The exchange would have made proper verification about the project before making the token available for pre-sale and this ease off the stress of an investor to make tedious research checking for the authenticity of the project. Although, exchanges do warn investors before purchase that new tokens are highly volatile and this would prepare the heart of an investor towards the risk. Let's talk about the differences in a list below.
New cryptocurrencies are offered directly by the company or issuer in ICO "Initial Coin Offering", while, in IEO " Initial Exchange Offering" new cryptocurrencies awaiting listing is offered by exchanges after reaching an agreement with the coin issuer.
Investors do most of the research in ICO to be sure of the investment they are entering, while, in IEO, the burden of rigorous research has been lessened by the exchange because they are very sure of the project before bringing it in.
New tokens are available for an instant presale on ICO with no much requirements, while, participation in IEO requires that you must have passed through some verification process.
Advantages and Disadvantages of ICOs
| Advantages | Disadvantages |
|---|
| A new crypto that has the potential to hit a peak price in the soonest time are bought at a very lesser price through ICOs | It is a risk of investment if the company in charge of the project are unable to meet up with funding to effectively put the project working on the blockchain |
| High profitability of new crypto bought via ICOs, since it was bought at a very low price | If care is not taken, new crypto held during ICOs tends to be volatile after listing and this could lead to loss if the investor doesn't act on time |
| Ease of purchase of new crypto at the ICOs stage that requires no much verification process | ICOs team's purpose might be defraud people and if that happens, investors money are lost after purchase in ICOs |
| ICOs are available to all investors with its decentralization nature | Its accommodation for many investors also attracts a lot of scammers as there is no proper verification. |
The ARK project (ICO)
ARK ICO kicked off on the 5th, November 2016 which eventually ended on 9th, December 2016 with token being ARK. During the period of ICO, the project was able to raise 22,000,000 USD which was used to finish up the project on the blockchain.
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The distribution analysis through research shows that the tokens were distributed based on percentages; 75% distributed to the investors, 15% distributed to the founders, 7% distributed to the Arkshield program, 2% distributed to the bounty program and 1% distributed to the escrow.
Currently, the worth of one ARK is 2.52 USD with the crypto sitting on the 169 position as ranked by market capitalization with a circulating supply of 128,489,499 ARK.
Key features of ARK
In the crypto space, it is the first Delegated Proof of Stake (DPoS) consensus-based cryptocurrency and blockchain protocol.
It's fully decentralized.
It's aimed at improving the adoption of blockchain by the general public by creating a user-friendly platform to enhance the exchange of assets and data.
It has a whole platform that processes send and receive solely on the ARK protocol without the need of interacting with DApps (Decentralized Applications).
ARK Liquidity
ARK is quite easy to exchange as it's widely available on exchanges for trading and that makes it exhibit a high liquidity characteristics.
ARK paired with BTC for trading on Binance
Conclusion
Initial coin offering is with no doubt of great benefits to both the company in charge of the project and investors as it helps the team to generate the needed fund to finance the project and gives investors the chance to earn bigger profits in return when the project is complete on the blockchain. I am glad to be a partaker of this great lecture and I'm thankful to professor
@imagen for his great lecture.
Regards; Cc: @steemcurator01 , Cc: @steemcurator02 , Cc: @steemitblog , Cc: @imagen
Hola @temitopef
Gracias por participar en la Academia Cripto de Steemit.
Buen trabajo, sigue así, espero seguir viendo tus tareas en mis próximas clases.
Calificación: 7.85
Thanks so much professor @imagen for the review.