The Ever-Changing ICO Process

The crypto space is nimble, just like the underlying blockchain technology that powers it. As a constantly evolving emerging technology, spanning all industries, with countless applications being explored and countless others yet to be discovered, crypto makes it hard to keep up.

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The crypto space is nimble, just like the underlying blockchain technology that powers it. As a constantly evolving emerging technology, spanning all industries, with countless applications being explored and countless others yet to be discovered, crypto makes it hard to keep up.

The ICO (Initial Coin Offering), a fundamental element in the roadmap of some crypto projects, is continually being redefined. But, as ideas change and the space develops, so has the process of getting to an ICO.

How Has the ICO Process Changed?

There’s been a noticeable sea-change in the ICO process for crypto projects since the early days, when the market was less saturated and mostly dominated by early-adopters and tech-level crypto enthusiasts.

Jon Knipper is one of TLDR’s Founding Partners, with vast experience in investment. Having followed the crypto space closely for many years, he explains the key change he’s observed in the ICO process:

“In the earliest days of ICO hype, all a project needed to do was show up. Now the space has rapidly transformed and investors (both institutional as well as the broader retail ICO participants) are increasingly picky, doing better due diligence and demanding more disclosure.”

As more people have become involved in the space, whether as investors or project founders, a need has arisen to establish and separate the potentially successful ICOs from those that will undoubtedly fail. When all you may have to go on is a whitepaper, it’s important to know what to look for.

Increasingly, as Jon explains, consumers and investors are researching the team behind the projects emerging into the crypto space, and their advisers and partners, before engaging with a project. This level of individual due diligence is something that TLDR recommends as standard practice when getting involved with crypto.

Is There a Distinct Process or Template for ICOs?

In an ever-changing space, it’s hard to nail down a specific template for an ICO, as each project is different and the demands of the consumer are evolving. Jon makes an apt comparison to IPOs:

“Every ICO process is unique, but as the space continues to develop, trends and best practices are certainly starting to become apparent. Just as the process for a traditional IPO may differ between Hong Kong or New York, there are going to be more similarities than not.”

However, Jon does offer some good advice for new projects and ICOs, regarding the process they should adopt, to not only survive but thrive, within an increasingly competitive market:

“For new ICOs we advocate a controlled and well-communicated process that brings together a grass-roots community of users and developers along with support from increasingly crypto-sophisticated institutional investors.”

And while success isn’t guaranteed, there are steps that can be taken to increase the possibility of enjoying a successful ICO. According to TLDR Partner, Andrew Durgee, there are criteria to help projects negotiate the current market situation:

“While there isn’t necessarily a formula for success, there certainly are established criteria for the current market landscape. It can often be complex nuances that are required to ensure an ICO is delivered to market effectively. It’s best to lean on qualified and experienced advisors to help your ICO navigate these issues on your way to TGE.”

Has There Been a Shift Away from Public Sales to Private Sales?

Market conditions are always something that crypto projects need to be wary of, as these can greatly affect the ICO process as well as the relative success of the ICO. Knowing when to opt for a private sale over a public sale, or how to strike a balance between the two contrasting elements of the process, is essential to negotiating a tricky marketplace. Andrew explains:

“As we continue to navigate a somewhat bearish market, the public sales and hard caps continue to come down. This is a product of individuals not wanting to part with their BTC and ETH at what they consider to be low values. Thus there has been a pivot towards private sales where significant investment can sometimes be more easily obtained. The public often does not have the financial capacity nor the technical understanding to accurately identify ICO winners and are opting to instead put their assets towards already established liquid tokens.”

The TLDR Recap

  1. The process of getting to an ICO is evolving as the crypto space develops and market conditions change.
  2. A congested ICO marketplace is forcing investors to research projects more thoroughly and complete their own due diligence.
  3. New ICOs should have a controlled and well-communicated process, including a community of users, developers, and crypto-sophisticated institutional investors.
  4. ICOs should work with qualified and experienced advisors to help them get to their TGE

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This article is based on views and information held by TLDR on publication date and may be subject to change, although TLDR does not undertake to update them. Nothing contained herein constitutes investment, legal, tax or other advice, nor a recommendation or solicitation of an offer to buy or sell any securities or to adopt any investment strategy. No representation or warranty, express or implied, is made or given by or on behalf of TLDR as to the accuracy and completeness or fairness of the information contained in this article.