The traditional financial system was swept by the concept of crowdfunding. The Internet of Things has come up with the alternative crowdfunding known as the Initial Coin Offerings. This all new funding method has aided several new startups to raise funds and expand their businesses. Businesses have raised over 5.1 billion USD in 2013, which had grown to 16 billion in 2014, and got further momentum in 2015 with over 34 billion raised in that fiscal.
The ICO, also known as the Initial Coin Offerings, is the new buzz in the crypto arena and is the part of the cryptocurrencies. It provides an efficient and a simple way to raise funds for developers whereas, it provides an excellent opportunity for the investors to invest in something where they see the value. The ICO is usually lasted for a week and sometimes for a longer duration, wherein, individuals are allowed to exchange the Cryptocurrencies like Bitcoin (BTC) or Ether (ETH) with tokens.
There are basically two kinds of fundraising happens with the ICO, one with the fixed coin – fixed price, and another with the fixed coin but floating prices. Meaning, in the fixed coin – fixed price fundraising, the investors are offered coins at pre-determined prices and with designated number of coins, whereas, in the fixed coin – floating price event, the investors are offered fixed number of coin through market-driven prices (i.e. if the project receives more funds then the prices offered per token are raised).
Recently, there is a new method has been developed wherein the prices of the tokens are fixed but the number of tokens is dynamic. In this concept, fundraisers, generally, keep the limit in terms of the amount being raised or the duration for which it is offered.
Successful Initial Coin Offerings
Now, as we know what is Initial Coin Offerings, let’s see some of the most successful ICO’s which has given whopping returns to the investors.
The Nxt ICO: The Nxt exchange provides a complete solution for users to issue assets/cryptocurrencies in a decentralized manner. It is also available through API allowing users to have the flexibility to connect. The Initial Coin Offering for Nxt platform commenced on 28/09/2013 and remained open till 18/11/2013. During the ICO period, it received only 21 BTC from 73 investors and had raised about $14K. The ICO was offered through unknown bitcoin talk forum and the funds were transferred to raiser’s personnel BTC account. The ICO has given a profit percentage of whopping 199900 percent to the investors.
The Ethereum ICO: The software provides decentralized contract application platform and has gained popularity since its launch. The Ethereum’s native token known as the Ether can be mined through the proof of work protocol which is set to change to the proof of stake protocol. The Initial Coin Offering for the Ethereum commenced on 20/07/2017 and remained open till 2/09/2014. During the offering period of 42 days, it had collected about 31.5K BTC having a value of over $18 million. Making it the second most successful ICO and 6th largest crowdfunded project so far. The developers kept their funds in the BTC which during that time went through a very high volatility and ultimately affected the funds. Since its launch, the Ethereum platform has gained popularity and value. The platform is being utilized by several projects like DigixDAO, Ardor, Singular-DTV, and Iconomi.