Crowdsale vs Presale: Major Differences

What is crowdsale vs presale Source

Smart Contracts in Ethereum opened the opportunity to develop Decentralised Apps using Ethereum Environment. And since then Smart Contract based ICO’s have flooded the crypto marketplace. ICO’s, in theory, are actually a straightforward means to generate the upfront cost or minimum funds required to get the Cryptocurrency startup from the pages of the white paper to operational realities.

While crowdsale is not a new practice (Even Ethereum project was launched post an online crowdsale ), it has undergone a few changes since its inception during the heydays. Today, most ICO’s conduct a presale before the crowdsale. In this blog, we discuss some of the key presales vs crowdsale features.

The PreSale

The PreSale is a way for start-ups to introduce their idea and proposed token like MEP. Some even call it Pre-ICO. The PreSale is also an ideal opportunity for the starters and the investors alike. The sole objective of the process is to create the right buzz and gain a strong momentum going into the crowdsale period. The PreSale offers a great opportunity for potential investors to gain insight about the future of the token offered.

• Investors can participate early make use of discounts as well as referral schemes.
• It also is a yardstick for the buzz around the Project.
• A great PreSale report card develops credibility and assurance for investors.

Note: Smart Contracts for PreSale are different from that for CrowdSale. In simple terms, smart contracts are the self-executing by nature and they contain the condition of transactions agreed upon between the participating parties. The participating parties in PreSale normally involve large private investors.

The CrowdSale

The Crowdsale is the lifeline of the ICO project. This is a make or break deal in the true sense of the term. The start-up sales a part of its token exchange for Fiat Money. The Startup also sets a Hard Cap as well as Soft Cap limit during the CrowdSale period.

Participation is open to all via a simple registration process. One can buy the tokens post transferring the required amount on the company’s wallet address. There are minimum rules and one can invest quite a good amount if he/she wants to by following the procedure. Some added benefits of participating in a crowdsale include:

By investing in tokens, token owners can avail a multitude of bonuses and awards.
Participation adds to the credibility of the startup and in the end, one is part of an idea one believes has great potential to bring change.

While both Presales and Crowdsales are for generating funds. They serve strikingly different purposes. The CrowdSale is a means to generate the majority of the funds to get the idea completely operational. A Presale is like a payload in a satellite launch. The amount of heat and buzz preSale generates can be the deciding factor between a successful or a failed ICO. A Major prerequisite for a great pre-sale is that at least part of the project must be provable or visible on the ground.