A detailed guide on how to plan a road map for ICO

 

An ICO or initial coin offering is a new cryptocurrency system which can help the entrepreneurs to raise fund in the market. With the help of an ICO, investor brings new cryptocurrencies to market but at high risk. The company uses it as a way to raise money in the form of new coins, app or services. Interested people can buy these coins from the company and can invest in the cryptocurrency issued by them. This can be considered as a token and have some utility in using them. This requires an initial coin offering platform to be formed for creating a new cryptocurrency for new business. 

These ICOs are used generally by those who want to start their new business and wishes to offer some goods or service related to the cryptocurrency but these tokens cannot be considered as stocks as both have many differences. For investing in an ICO, it requires purchasing of digital currency and having some basic knowledge of using these cryptocurrencies. For this, you can take the help of ICO development services provided by different companies which can help you to raise a fund with cryptocurrencies safely.

How to plan a road map for ICO

An initial coin offering road map is usually a graphical representation of the platform that needs to be created to issue a cryptocurrency for a new startup. It includes presenting the project goal and plans in the form of a timeline using a clear and transparent chart. Also, launching an ICO is not an easy task. It is very time consuming and thus ICO launching companies can provide you ICO launching services to plan a road map for you making it an easier task.

To plan a road map for an initial coin offering, the following are some steps which can be followed

Step 1: start it with an idea

To start a new project it is essential to come up with an idea, think over it and make sure whether your project needs an initial coin offering or not. If you are starting a project and want it to be successful, you must offer an ICO solution in the market that no one can ever provide. For this purpose, you require to have a complete understanding of the competitors and the target audience in the market. Moreover, if you are thinking to fund your startup with an ICO, you will require its token. Also to make your token value high, it must need to be integrated with the start-up in a useful way.

Step 2: Know about your competitors

It is very essential to know about your competition and competitors if you are starting your new business. This is because one can think your business similar to any other business already existing in the market. So if you want investors to invest in your company, you will require a cryptocurrency integrated with your startup in a meaningful way. Competing for the money of the investors can make you stand out from the crowd.

Step 3: find out the legal sides of the things

ICOs are nowadays the most regulated thing in the country. This is because of the frauds and spams associated with it. That is why it is still a doubtful thing whether initial coin offering is legal, regulated or subject to any future regulations. For this, it is essential to pay much attention to their legal terms and legal regulation. This issue can be resolved by hiring a lawyer which has much experience in cryptocurrency.

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Detailed Analysis And Information On Margin-Leverage Engine

Consider a trade between a gold jeweler and Mr. Amit. Amit has entered into a contract with gold jeweler where he agrees to buy 10Kgs of gold at Rs. 3000/- per gram after a period of 3 months. But due to the recent COVID-19 crisis, the value of the gold rose to a very high level. This resulted in the loss of the gold jeweler and profit for Amit. Had it been the case that the jeweler disagreed to respect the contract, it would have been followed with a long and grueling legal case. To prevent such cases, a concept of margin came into existence. 

What is Margin?

Margin is the collateral taken from the exchange from the trader when he enters into a leveraged derivative contract. But what does leverage mean? It is a feature that enables the trader to take a position that is much larger than his/her capital. Say, to buy 1 Bitcoin for $5,000, a trader with a capital of $500 can borrow $4500 in margin trading. In this situation, the leverage of the trader is 10x.

What are the types of Margin?

Crypto derivatives trading platform has below mentioned margins

Initial Margin: It is the minimum amount required to enter a new position as well as the minimum amount needed to keep that position from getting liquidated. The initial margin varies from the price of the contract and depends on the position size.

A trader buys 6,000 BTCUSD contracts at 10,000 USD with 25x leverage.

Initial Margin = Quantity of Contracts / (Order Price × Leverage)

= 6,000/(10,000×25) 

= 0.024 BTC

Maintenance Margin: It is the amount that will assist the trader to hold his/her positions. The moment the cash balance falls below the maintenance margin, the exchange will ask you to deposit more money or else it will trigger the liquidation. That means the exchange will force themselves to close the positions on their own.

A trader buys 6,000 BTCUSD contracts at 10,000 USD with 25x leverage.

The maintenance margin used for this position is:

Maintenance Margin = (Quantity of Contracts / Order Price) × Maintenance Margin Rate

= (6,000/10,000)×0.5% 

= 0.003 BTC

Initial Margin = 6,000/(10,000*25)

= 0.024 BTC

This means that this position may have an unrealized loss of up to 0.021 BTC (0.024 BTC – 0.003 BTC) before the occurrence of liquidation

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Launching an STO – A Comprehensive Guide

 

The blockchain is a core technique when it comes to supporting crypto assets like Bitcoin, Ether, security tokens and utility tokens. These crypto-assets have an enormous capacity to bring a complete transformation in the financial services marketplace. Many people are already familiar with utility tokens, and the security tokens are relatively novel concept. In this post, we shall elucidate the launching process of an STO.

A token, when subjected to federal security regulations, is known as a security token. Such tokens can derive its valuation from other external and tradable assets. Some of the examples of security tokens are equity tokens, debt tokens, utility and asset-backed tokens.

How to Launch Security Token Offering?

The STO Launching Process can be bifurcated into the following stages:

1. Preparation
2. Pre-STO
3. STO for investors
4. Post-STO

Stage 1: Preparation

1. Coming up with an idea for the security token and consulting a legal advisor and deciding the modus operandi for the token to gain value. The token’s value can be determined through the three principles:

• Role
• Purpose
• Feature

Every role defined for the token has a specified purpose against which the features can be apprehended depending on the need of the business.

2. The regulations to be followed in the process of creating a security token. For the token to be considered as a security token, it must qualify the Howey Test determined by the US Supreme Court. Howey test can be segmented as 3 independent criteria that must be fulfilled for creating a security token. They are:

• An investment of capital
• In the identical enterprise
• With the expectation of profits from the struggles of others.

If not, then the token will be deemed as a utility token. The regulations for the security token in diverse for every country. The issuer will have to adhere to the legislation of the respective countries in which he plans to issue the tokens.

3. The next step is selecting the correct security token platform. Security tokens require unique infrastructure and a new approach. It is a cumbersome process; therefore, you need to have a piece of thorough knowledge about the security issuance platforms. 

Given below is the list of the top security token platforms to launch an STO.

• Polymath
• Harbor
• Securitize
• Securrency
• Swarm

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Things to be Included in a Project Road map

 It can be said without a hint of doubt that cryptocurrency has been receiving a lot of market attention these days. Cryptocurrency is a phenomenon, especially with an unexpected subsequent crackdown on the ventures and crypto exchanges in the domain. It has been duly observed that many companies have begun to fathom the probabilities of their applications in multiple sectors. 

Finally, Blockchain technology has started gaining the recognition it rightly deserves. Due to this, having a cryptocurrency based project is gaining popularity amongst many companies. Many companies today dream of creating such cryptocurrency-based projects and accumulate offerings from the public for the execution of the project. They wish to create an Initial Coin Offering (ICO), Initial Exchange Offering (IEO), or Security Token Offering (STO).

Several ICOs failed over a period of time, not because they were scams, some had excellent plans and visions. These projects succumbed as many critical aspects of the ICOs were overlooked. However, many agencies provide ICO software development and ico development services to promise a smooth transition through the process.

Launching STOs (Security Token Offerings) is slightly complicated. You require a substantial understanding of the legislation dictating STOs with proper and equipped employees to manage assent with the Security Exchange Commission (SEC). Designing a smart-contract model for a security token requires much scrutiny; otherwise, the authority debunks it. SEC has criteria that must be comprehended and requisites for each security token. You must examine these rules very thoroughly and ensure to learn them. This knowledge will assist you in understanding what skill sets you are watching for in a developer and your legal team. STO Development Services and STO Consulting Services can be availed for better working of the project.

For IEOs (Initial Exchange Offerings), the accumulation of funds is done by a crypto exchange. This can be very easy as you do not require to establish a crowd sale website. In addition, the exchange that will offer the IEO will carry due diligence on your project and team members. This is done to protect the reliability of the exchange. Launching an IEO is almost the equivalent of launching an ICO, the important distinction being the method of acquisition of funds, which is through a crypto exchange in IEO’s situation. You need to watch out for a fitting exchange to launch your IEO. You might contemplate using multiple exchanges or utilizing a mix of IEO and ICO. Many agencies nowadays provide ieo development services and IEO Launch services to the issuers so that they can concentrate on the core operations.

Process for ICO Launchpad

Step 1: Pre-ICO Validation

Every project begins with an idea; it needs to be validated and converted into a plan for it to be implemented. To ensure that the plan succeeds it must have a proper ICO Planning, knowledge of token model and economy, custom business model, initial project audit, analysis of product validation, a perfect pitch deck and Social Community Build-up for investors, market analysis and setting up of a team.

Step 2: Legal Audit

No one wants to be engrossed in legal matters, especially with the changing dynamics of the market. A legal audit is a must to review the Corporate Structure and Governance. Also, to draft the necessary documents and follow the compliances diligently.

Step 3: ICO Marketing

Marketing is essential in helping the product reach its target audience. It will help the ICO campaign reach to the masses. Comprehensive marketing would incorporate a Roadmap & Marketing Strategy. It will be necessary for tapping Brand, Web, and Social Media Expertise, Bounty Programs, Airdrops, Digital Marketing, Community Management, and Roadshows so that all the mediums of marketing are covered.

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Cryptocurrency Exchange Software Development Company - Espay Exchange

 

Do you know what smart contracts are? If yes, you might know how it is being used in major sectors like Finance, Healthcare, Real Estate, Automobile, Supply Chain, and Management. Even the Government is planning to use it for elections. 

But it was first introduced in the crypto market. Do you know the technology behind crypto trading? The main technology is blockchain. But nowadays, trading platforms are using smart contracts to facilitate crypto trade. 

White label cryptocurrency exchange uses smart contracts to facilitate crypto trade. Do you know how ICO tokens are created and sold? It is done by using smart contracts. It is safe to say that smart contracts have become a very important part of the crypto market and crypto trading.

Many people still don’t have any idea about smart contracts. So in this post, we are going to help you understand what exactly smart contracts are. We are also going to discuss how it is reacted to trading in the crypto market.

Smart Contracts

In technical terms, it is a computer protocol. This protocol works like a contract. It is like a digital contract. Do you know how a contract works? In a contract, two parties agree to certain terms and conditions. Once these conditions are met, the contract is executed. 

Similarly, a smart contract is a computer program which works on the blockchain. Here the terms and conditions are written in codes. When the terms and conditions are fulfilled by both parties, the contract gets executed on its own. Once the contract is executed, it is updated across the blockchain network.

The idea was coined by Nick Szabo. He was a cryptographer. In 1994, he taught of using computer codes to write contracts and make it digital. However, it took 21 years for this idea to be implemented. In 2015, the first smart contract was developed. It was done by Vitalik Buterin. He is the founder of Ethereum. 

A smart contract basically can be understood with the help of these three terms.

• Agreement: It is an agreement between two parties. The agreement is in the form of a written code. It runs on the blockchain. These codes are stored in a public ledger, which everybody can see but cannot be changed.
• Processing: The blockchain network processes the transaction agreement. There is no third party or mediator involved. 
• Execution: Once the conditions of the contract are met, it gets executed automatically. There is no one to stop or intervene. 

If you still have doubts about smart contracts, this example will help you.

Example

You have conducted an ICO. The smart contract is made on Ethereum Blockchain. The smart contract will contain an agreement between you and the investors. Suppose you have 100,000 Tokens. Now, you want to raise 1,000,000 Ether, so you need to sell one token for 10 Ether. Now, you need to create a smart contract which will help you to transfer 1 Token for 10 Ether. The smart contract will look like,

“WHEN the investor pays 10 Ether to you, THEN he will get ownership of 1 token.”

As per the smart contract, when you receive 10 Ether from an investor, he will automatically receive one token. You don’t need to go to any lawyer to create an agreement. With smart contracts, you can develop your own contract. The mechanism behind smart contracts is simple. Once the terms and conditions of the contracts are met, it gets executed.

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Security Parameters To Look Forward To

 

The cryptocurrency space has seen massive changes since Bitcoin’s earliest days, but one thing that’s remained constant is exchange breaches. About $1.1 billion worth of cryptocurrencies were stolen in the first half of 2018. The survey conducted by the ICOrating.com has revealed some scary statistics relating to the security practices in many exchanges. 

• 41% of exchanges allow passwords with fewer than 8 symbols
• 37% of exchanges allow passwords with either digits or letters alone
• 5% of exchanges allow the creation of accounts without email verification
• 4% of exchanges lack 2FA
• Only 46% of exchanges meet all four parameters
• Just 4% of Exchanges were found to have a best practice for domain security

Numbers don’t lie and it makes me scared. Is it safe to trade my hard-earned money in such exchanges?

The Cryptocurrency derivatives exchange platform should consider safety features for securing the user against any unwanted potential threats and losses. Espay-X crypto derivative exchange software development team makes sure that your software exchange terminal has the below-mentioned features.

LOGIN WITH EMAIL ID AND PASSWORD

Email is of the most important aspect between the user and the software. It is used to alert the user for new activities happening around with his account – login via the new device, one-time password, etc. It can also be used to communicate with the user, when he/she needs support. We make sure that your email address and password are secure and never compromised. The engine helps the user to choose a password that consists of permutations and combinations of varied characters.

STANDARD SIGNUP

The software exchange terminal comes with a secure and optimized login process. This serves the purpose for the end-user as well as guarantee minimal data breach impact. It consists of the usage of SSL encryption, reCAPTCHA, limit login, and password reset attempts, geo-location security, etc.

FORGOT PASSWORD WITH SECURITY QUESTION

The software exchange terminal has the forget password feature to help the users reset it. It will ask a particular set of security questions that are pre-selected and filled by the user. If the user is able to answer it correctly, then and only then the software allows to reset the password. Else, it throws error message or blocks your account.

2 FACTOR AUTHENTICATIONS

2-factor authentications also known as dual-factor authentication is mostly used protection mechanism features. It means the user needs to have a hold of two different authorization keys to enable him to log in to his respective account. Generally, it consists of the password set by the user and the random alphanumeric character. It is mandatory for the user to remember the password, but needs to follow the below-mentioned approaches to get the second code. 

• It can be availed via message of call
• It can be availed via specific applications

The latter approach is considered to be reliable because the code generated by the applications has a shorter life span say 30 seconds. This makes it difficult for the hackers provided your device is at a safe place.

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What are the risks and liability involved in raising a fund with STO

 

Enter 2018, a terminology was introduced into the cryptocurrency world – STO; Acronym for Security Token Offerings. 

While most people were familiar with ICO but given its number of scam projects that never delivered, STO was brought into the crypto family.

And soon the STO era started that provided far better protection to the blockchain investors and carved the way for mass adoption of the digital economy. Scroll to know about Security Token Offerings in brief.

What is STO?

STO stands for Security Token Offering. It is the alternative to private and venture capital financing for companies across the globe. Security token offerings, popularly known as security tokens, offer a number of financial rights such as equity, vote casting, income shares, profit dividends and access to the investors. A security token performs evenly in functionality and confirms ownership of the tokens via blockchain transactions.

Unlike ICO, STO is the sale of the security token. All in all, STO is a combination of Security and ICO.

What are the key benefits of Security Token Offerings?

Security Token Offerings has unlocked a user- friendly, cost-effective and safe means for the investors to invest in companies, they choose.

With all the discussions around security token offerings, potential investors and buyers have the most obvious question: What makes this STO investment stand out? Let’s take a look at some of the benefits that Security Token Offerings have in store for investors and buyers.

1. Security tokens are programmable

The main benefit of security tokens over conventional financial securities is that they are programmable. This means you can include certain rules within the security token that will apply automatically. These rules can become an effective way to impel ownership and guarantee price stability.

2. 24*7 full liquidity

The current securities can only be traded in working hours on weekdays. It requires a few days before securities are settled. Tokens can be organized using blockchain technology quickly or promptly. It is a significant benefit for investors as compared to traditional investments.

3. Access to the global market

An organization can offer its security to the global market giving it a higher chance of success. Launching an IPO involves a lot of fees to banks and advisors across different sectors. This is not in the case of STO as it lowers the fees to raise funds.

4. Fractional ownership

Fractional ownership is quite complicated when dealing with high-priced assets. Since security tokens allow investors to buy only a fraction of collectibles or arts, people can extend the portfolios without much money.

5. Completely traceable & embedded compliance

Regulatory compliance is key for security tokens. These regulations vary on different factors such as jurisdictions, investor type and asset type. Incorporating them is a bit hassle. But, since security tokens are easily programmable, the regulations can be embedded in the code. This means regulations become rapidly easier and automatic once the system is set up.

Besides, STOs are fully traceable. It is possible to trace a coin, check who owned it and for how long.

What are the main challenges with STOs?

On one side where STO offers a myriad of benefits, there are certain risks and liability involved while raising a fund with STO. One of the biggest challenges that STO platforms face is increased regulation. This places a higher administrative burden as every process will have to be set up for custodianship, exchange approvals, know your customer (KYC), tracking ownership, AML, etc. to ensure they adhere to the relevant securities law.

Though the process of STO is cheaper than IPO, the additional post works turn it more costly and raise the barrier of entry.

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