The hype around cryptocurrencies and blockchain technology keeps on growing. You should live in a separate reality to hear nothing about Bitcoin, ICOs, and large funds startups raise due to the new way of investing. A few years ago, an Initial Coin Offering was a combination of words hardly understandable only to several nerds. Today, the number of enthusiasts crazy about launching an ICO is hard to estimate.
So, the question bothering entrepreneurs worldwide is – how to launch an initial coin offering? The very idea behind an ICO is simple: the company sells its assets (tokens) for fiat money or cryptocurrencies – Bitcoin (BTC), Ethereum (ETH), or any altcoin accepted. Token sales are the fundraising tools that provide companies with money they need to implement ideas presented to investors.
However, not only an innovative idea and an appealing white paper underlie a successful ICO. The key aspect to consider is qualified technical support of the campaign. Ambisafe Software provides all the required tools and services for running an ICO and managing funds when the campaign is over. From the technical point of view, the campaign includes three main stages:
- Issuing an asset (token) and starting an ICO
- Selling the asset to the investors
- Ensuring the investors may securely hold and manage your asset
Let’s consider the main aspects of each stage and outline the key steps you have to complete.
Before the ICO
The campaign doesn’t start out of the blue as if by a wave of a magic wand. You can’t just say “Launch my ICO!” and wait for the process to trigger itself. The first thing you have to do is to issue tokens – assets that you would offer to your potential investors.
There are two different ways of issuing tokens:
- Collecting the investments and then issuing tokens, due to the total amount of investments. This approach was chosen by Chronobank and Waves for their ICOs.
- Issuing more tokens than could be potentially sold, performing an ICO and then destroying the unnecessary tokens. TaaS has chosen this option.
In the first case, you use Ambisafe CryptoWallet to collect the investments. In the second, you may sell your asset through some of the participating cryptocurrency exchanges (e.g., Orderbook). The second option gives your investors a chance to use familiar trading websites to purchase your tokens.
Running the ICO
When you have decided on the way you would release your tokens, it’s time to start issuing them and then selling. The process of running the ICO equals to the process of selling your assets to the investors.
Let’s have a look at the most complicated case when investments are collected simultaneously via CryptoWallet and cryptocurrency exchanges.
The First Step
To launch an ICO on Ethereum blockchain, you need to issue an asset – token – that will be purchased by your investors. First of all, you need to create an account at Ambisafe Software website and to register your Ambisafe Vault (ex. Asset Manager) organization.
At this stage, all the tokens issued would belong exclusively to you and the users that have access to Ambisafe Vault. The latter is a multi-sig repository: to manage tokens and funds several users have to approve the transaction.
For effective exploitation of Ambisafe Vault, add at least two more owners. When there are three owners of the multi-sig repository, then you should indicate that each operation and transaction requires the confirmation from two owners. The most efficient scheme of managing your funds is when the number of confirming signatures is smaller than the number of owners: it prevents the lockout of your funds in case one of the owners loses the account password. We recommend setting a 3-of-5 scheme in your Ambisafe Vault. It would be impossible to perform any transaction until all three signatures are collected: this requirement is enforced by a smart contract and cannot be skipped.
Also, you should make sure that the password of every owner is stored securely.
The Second Step
When the tokens are issued and securely kept in Ambisafe Vault, it is time for you to purchase a license for Ambisafe CryptoWallet. It is the tool that you would use to collect donations from your investors. The Wallet is branded and customized to fit your corporate identity.
CryptoWallet requires the following dependencies to function:
- Ethereum node or Ambisafe Supernode SaaS subscription for communication with Ethereum blockchain
- Key-value storage or Ambisafe Keystore SaaS subscription for storing the encrypted Ethereum account containers with the highest reliability. Corruption or loss of these containers will lead to the loss of control over purchased assets
- Ambisafe Keyserver SaaS subscription to accept Bitcoin as a payment method
- MySQL or PostgreSQL database for storing the rest of the wallet’s data
After the installation and login to CryptoWallet admin panel, you will see the address of the tokens’ repository. As all the tokens issued are stored in Ambisafe Vault, you have to make sure that a certain amount of tokens is regularly transferred to the repository. It is crucial as when your investors purchase tokens they receive them from the address of the repository.
Ambisafe Software sets up a staging server that uses a non-valuable asset to make sure that everything looks and works perfectly before the ICO begins. To check it out, you use a test account and make a test purchase of your tokens. If everything is fine, Ambisafe Software releases the final version of CryptoWallet that will be used for gathering funds during the ICO.
The Third Step
On this stage, the negotiations with cryptocurrency exchanges occur so that you may add your tokens to the supported currencies list.
Also, there are additional options, such as:
- Configuring the trading back-end to allow token purchase only from your account
- Disabling withdrawal of your asset from exchange until the ICO is finished
- Adding bonuses for early participants
- Starting the sale at the specified time
- Announcing the sale in the exchange's mailing list and notifications
When all the details are agreed, you should add the address of your tokens’ repository to your account at the cryptocurrency exchange so that investors would be able to purchase tokens during the ICO.
At this stage you should have everything you need – assets to sell, a wallet to store and release them, a wallet to collect funds. So, it’s a high time to run a token sale. During this stage, investors purchase your tokens, and you gather their money in your CryptoWallet. Meanwhile, investors get own Wallets where they store the tokens they bought.
After the ICO
As a rule, the ICO doesn’t last longer than a month or so. For a successful campaign, it’s not enough to launch an ICO – it’s crucial to finish it with dignity, regardless the sum of money you managed to collect. Unfortunately, not every project is successful, and you never have 100% guarantees that investors would give you what you want.
The first thing to do, when the campaign is over is to destroy the unpurchased part of the tokens. You can do it by withdrawing tokens to your Ambisafe Vault cold storage address and using the Revoke command.
Ambisafe Software provides not only the ICO launching services and technical solutions you need to run the campaign but also offers tools to manage the funds you raised. The most logical option you have is to transfer all the money to your Ambisafe Vault. This service is convenient when it comes to storage and management of large volumes of cryptocurrencies.
Meanwhile, your investors have access to their CryptoWallets even when the campaign is over. They may keep their tokens, withdraw them to a token exchange, transfer to other wallets, etc.
Hence, Ambisafe Software provides you with all the tools necessary throughout an ICO: from token issuance to funds management.