Launching an ICO

The ICO Handbook : https://hackernoon.com/the-ico-handbook-705a89fa8978

First before all : Determine the type of token and avoid being a security token (regulated by
SEC)

i) Currency
ii) Utility
iii) Asset
iv) Equity/security
v) Reward
https://hackernoon.com/icos-token-types-for-dummies-an-buyers-guide-to-crypto-
tokens-b6edea16776e

- Could your decentralized token project run afoul of securities laws?

Part I: Planning

What does the token do?

● Role of the token — how does it work in your system?

● Purpose of the token — what objective does it accomplish? Why is this token

● Features — what features does it have that make it the right tool for the job?

Challenge your token

Tokens are Project Finance

Token Income is Regular Operating Income

Who is the Audience?

There are four main token buyers:

2. Investors

3. Traders

4. Natural buyers and users of your future system

Is it Legal?

How is it Structured?

What are your Assets?

- Running code
- Customers are a big deal.
- Open-source.
- Commitment.
- What are your Liabilities?
- Marketing
- The pre-sale
- Advisors
- Partners
- Road show.
- Logos
- Foreign language translations
- Bounty programs.
- Online events. (webinars)
- Understand buying behavior.

Offering Terms

The PreSale

Communications

An explainer video.
A white paper.

Articles.

Interviews.

Social Media

Twitter

Slack

Facebook

LinkedIn

YouTube

Reddit and BitcoinTalk

Advertising

Public Relations
http://www.famouspublicity.com/

Medium.com

LinkedIn

Mistakes
Many people will make mistakes trying to get into any ICO.

Customer Service

Customer service system like https://www.groovehq.com/

Hackers, Phishers, Spyware, and Thieves

Social media phishing

Web sites and newsletters that look like yours.

Your web site is a big vulnerability. You need Cloudflare, two-factor authentication, hard
passwords, and only a very few people running the show.

Domain names

Slack seems to be full of phishing messages. Lock down your slack before you
announce your ICO.

Keyloggers and spyware.

EtherScan. You can search for keywords on Etherscan.

Presale. We couldn’t tell buyers when our presale was coming.

https://myetherwallet.github.io/knowledge-base/getting-started/protecting-yourself-and-
your-funds.html
Smart Contracts and Multisig Wallets

https://openzeppelin.org/
https://blog.zeppelin.solutions/how-to-create-token-and-initial-coin-offering-contracts-
using-truffle-openzeppelin-1b7a5dae99b6

https://tokenmarket.net/
https://blog.wavesplatform.com/how-to-run-an-ico-e21b9f8c11d6

Smart contracts audit and test : https://dltlabs.io/

I recommend keeping your ether/bitcoins in a multisig wallet, which is now standard practice.

https://wallet.gnosis.pm/

Part II: The ICO Process

Before you release it, make a video showing how to buy your tokens with the real address.

Have people set a bookmark to your site.

Tell people that the address will come simultaneously via your newsletter and on your web site,
but that the newsletter is far better, as your newsletter is your number-one source of truth.

Respond on Twitter as soon as you see fakes.

Tell people to set their parameter at 60 Gwei and about 200,000 gas limit and put in their order
as soon as possible, and that’s it. Don’t order again.

Unpause and start the smart contract when the time comes. Do not think you can leave it sitting
on the blockchain without a pause function.
Assuming you are going for a “natural buyer” audience, you’ll want to schedule events and
generate news to continue to build momentum.

It makes sense to have bigger discounts early, but I don’t think the discount should be the
draw. It should be the project.

It is during this time that you must remember you are actually selling a product and they are
your customers, rather than you’re getting money from them to do your project.

At the same time, all your media channels must be working overtime, building on each other.
Use your advisors and their contacts to set up as many interviews as you can get. Watch to see
which messages turn into sales. Use A/B testing and different messages on different audiences.

We had live events almost daily, where we would all be on a Zoom screen, livecast to YouTube,
and we consistently had 200–500 people watching and asking questions. We had a chance to
introduce all the team members and give people a chance to get to know us. Because we were
always thinking one step ahead, people had something to look forward to.

To close out the sale, we had a “control room” broadcast and counted down the last minutes.
We were surprised how many people watched that! We thanked them and told them that our big
kick-off broadcast would be the following day, keeping the momentum.

Part III: After the Sale

Where are my Tokens?

Better to put the answer on a web page and send them there than to keep answering the
questions one by one.

What Exchange is Your Token Listed On?

Token Holders
You will have two kinds of token policies, each of which has an effect on the token supply:
i) Fiscal policy is the buying, spending, icing, discounting, and burning of tokens.
ii) Monetary policy is the overall set-up: how many tokens there are, how divisible, and the
inflation scheme. If there is a fixed supply forever, as with most tokens, then you can control the
price from the treasury by buying and selling tokens as a liquidity provider on several
exchanges. I don’t think it’s a good use of raised funds, but if your token is on a big exchange
and trading is thin, you may want to purchase tokens when they come on the market. Ideally,
you find a liquidity provider to do this for you.

Employees
You must make all expenses very transparent.
I think they should be tiered — we are shooting for four salary levels.
Better to pay people in cash than in tokens they are just going to sell.

Customers
Don’t focus as much on the technology and product as you think — you should also focus on
market adoption, messaging, and pivoting often so you don’t get too far out over your
technology skis looking for product-market fit.

Token Stewardship
Before and during the sale, you don’t want to talk much about the tokens. You want to
talk about the project. Now, after the sale, you must be careful what you say and do. On the
one hand, what’s good for the token is good for the business — anything that increases the value
of the token should be the right thing to do. But this is not true. This is what you should not do.
In general, you should ignore the token price and focus on achieving visible project
milestones that everyone can see will lead to the network effects you promised.

You can’t control the price, but you may be able to control a) the supply to some extent, and b)
the expectation of supply. These fiscal measures should be very clear and communicated long
before you do anything. The more you have “skin in the game” and don’t cash out, the more
people will believe in you and your mission. Projects where the majority of tokens belong to the
founders are problematic.

About Liquidity
People don’t appreciate the role liquidity plays in markets. It seems like a good idea to list
your token on as many exchanges as will accept it, but think about liquidity. We have a
real problem in the crypto-economy: the bigger exchanges get bigger, while smaller exchanges
must struggle to get customers. And bigger exchanges don’t necessarily have a better
experience or lower spreads, they are just bigger, and bigger is better.
Until then, you should list your token on the largest exchange you can get it on, simply
because that’s where the liquidity is. Having your token on several exchanges fragments the
market.

Money Management
Fiat currency. If you really have a lot of cash, you should probably only be about one third in
crypto altogether. The rest should be extremely diversified in ETFs and indexes across
currencies, locations, and strategies. A smart-beta and barbell approach are a good
combination.

Petty cash. You should cash out whenever you see a decent rise in the price of ether or bitcoin.
Not much, but enough to meet your projected needs for the next three months. If the price goes
down, hang in there and draw down your petty cash, and if the price goes up, replenish your
three-month supply. If you have raised quite a lot, change that to six months.

The token economy. You already probably have a pretty large exposure to your own tokens,
as you should. If you can, and if you’re building a platform, give or award some of your
tokens to other start-ups to finance their building parts of your ecosystem. Obviously,
they shouldn’t dump the tokens all at once — you could have a pay-as-you-go funding
approach. There are good reasons not to invest in other ICOs but rather use your money and
tokens to get direct results that apply to your project.

Your native cryptocurrency. Our native currency is ether, which is very volatile. Yet long term
we believe in it. We plan to retain a significant portion of our holdings in ether.

Build a diversified portfolio. A decent percentage of your holdings in crypto is okay, as long
as it’s diversified. That’s why we have built the CryptX index, which you can read about at
TokenFactory.io. We plan to be the first customers. There are other indexes, but I haven’t seen
one that is properly diversified and weighted.

The number one thing you should have is an investment committee with diverse, outside
views and some qualified statisticians/quants. A large enough portfolio should include hedges.
It’s easy to get too far out over your skis and not manage your holdings well. Don’t trust anyone
who is paid when you trade. Please see my webinar on postmodern portfolio theory to learn
more.

Community
Get them into an online community (we use RocketChat) and engage them!