TOZEX, THE NEW UPGRADE TO ICO?
What Is an Initial Coin Offering (ICO)?
An Initial Coin Offering (ICO) is the cryptocurrency industry’s equivalent to an Initial Public Offering (IPO). ICOs act as a way of raising funds, where a company that is looking to raise money to create a new coin/token, app, or service launches an ICO. Interested investors receives a new token from the company by buying into the company’s offering. This may represent a stake in the company or project, or the token may have some utility in using the product or service the company is offering
When cryptocurrency companies/start-ups wants to raise money through ICO, they usually creates a whitepaper outlining what the project is about, the needs/wants the project will fulfil upon completion, the amount of money needed, the number of the virtual tokens the founders will keep, the type/types of money that will be accepted, and the total time the ICO campaign will run for.
During ICO campaigns, supporters and enthusiasts of the project buys the project’s token with fiat or digital currencies. If the firm is unable to meet the minimum required funds, the ICO is deemed unsuccessful and the monies returned to their backers. If the funding requirements are met within the specified timeframe, then the money raised is used to pursue the goals of the project and drive the project to success.
One of the issues faced by ICO is accountability; the fact that tokens sold in an ICO does not always make the issuers/firms accountable to the investor. Though issuers of ICOs also raises capital for the project but it doesn’t happen in traditional way as done in initial public offering or crowdfunding. In the traditional ways of funding companies are accountable for their shareholders. That profits made are guaranteed by each share, dependent on the kind of stock the shareholders have particular rights which includes right for dividends, voting right, rights to get equity in case of liquidation.
Advantages of Initial Coin Offerings (ICO)
In an IPO, investor receives shares of stock in a company in exchange for their investment. In an ICO, there are no shares per se. Instead, firms raising funds through ICO provide a blockchain equivalent to a share — a cryptocurrency token. Investors pays in a popular existing token like bitcoin and receive a commensurate number of new tokens in exchange.
ICOs have indeed made many investors into millionaires. Take a look at the figures for 2017: That year, there were 435 successful ICOs, each raising an average of $12.7 million…the total amount raised for 2017 was $5.6 billion, with the 10 largest projects raising 25% of this total. Furthermore, tokens purchased in ICOs returned an average of 12.8x on the initial investment in dollar terms.
Disadvantages of Initial Coin Offerings (ICO)
Since ICOs have come become a big player in the cryptocurrency and blockchain industries, they have also brought along challenges, risks, and unforeseen opportunities. Investors buy into ICOs in the hopes of powerful and quick returns on their investments. Some of the most successful ICOs over the past few years are the source of this hope, as they have produced tremendous returns. Investor enthusiasm can also lead people astray, because they are mostly unregulated, ICOs are riddled with fraud and scam artists looking to prey on poorly informed and overzealous investors. And since they are not regulated by strong financial regulators like the SEC, funds lost due to fraud or incompetence may never be recovered.
The meteoric rise of ICOs during 2017 drew backlashes from a series of governmental and non-governmental entities in early Sept. 2017. The People’s Bank of China officially banned ICOs, arguing that they are counterproductive to economic and financial stability.
The Chinese central bank further prohibited the use of tokens as currency and banned banks from offering any ICOs related services. Because of this, both Bitcoin and Ethereum prices took a hit, in what is regarded as a sign of more regulation to come in cyrptocurrency. The ban also penalized already completed offerings. Facebook, Twitter, and Google all banned ICO advertisements in early 2018
Nothing can guarantee that an investor won’t be on the losing end of a scam/fraud when investing in ICOs.
Tozex is a financing platform which combines a token issuance module Tokenpad which enables the decentralized Tokenpad module allows to issue, manage and distribute tokens without help and trust from a costly third party. It facilitates the use of the Blockchain technology for token issuance and distribution by using an open source library of smart contracts. No specific skills required at cost efficient. Fully automated and regulated for ICO & STO.
Our platform uses the power of smart contract as a trustless third party to manage the issuance of tokens (utility, payment or securities) maintained by an open source library.
The decentralized exchange order book managing bids stays publicly auditable by any one avoiding market manipulations and demanding accountability.
With a user friendly interface, Tozex is designed to improve user experience without neglecting security.
The main characteristic of blockchain is to bring transparency among stakeholders (regulators, companies, investors, traders). Listing a new crypto-asset on our platform after an internal due diligence has always been the vote of our community.
BENEFITS OF TOZEX:
Entrepreneurs: help start-ups to Launch crypto-asset fundraising campaigns (ICO, STO or, BRO) as well as Expand the awareness of your promising and dream projects by submitting it to Tozex community, it saves time and cut costs (technical, marketing etc) and Creates your crypto-asset with a sustainable liquid market
Investors: Allows investors real time identification of early stages investment opportunities on exclusive projects, compare profitability and risks of each projects (given bonus, total supply …) and Liquid investments
Traders: gives traders Multi-signature deposit wallet to safeguard your crypto-assets with exclusive opportunities to trade new crypto-assets and an order book that is decentralized and pertinent market information and live market data (trading charts, reports ….)
In conclusion, Tozex is a fundraising platform which engages blockchain technology for SMEs raising capital. TOZEX allows setting up a token based crowd-funding campaign dedicated to finance SMEs project with an array embedded trading market place.