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Understanding the Crypto Presale

By Mchapeyama | CryptoSocial News | 27 Mar 2021


Initial coin Offering and presale ICO are two terms which crypto investors need to understand. Even if you are a mere crypto enthusiast you often come across these two terms. Understanding their meanings and implications will help you appreciate these much.

Initial coin offering is similar to initial public offering (IPO) in the legacy financial system. An ICO is a fund raising campaign in the cryptocurrency sector. During an ICO investors buy a token or coin, with the hope of getting a profit in the future. With an ICO, the sale of a token or coin is made public. Anyone can buy the tokens or coins at public cryptocurrency exchanges. Thus an ICO takes place when the coin is listed on one or more exchanges.

On the other hand, a presale involves people or organizations buying a token or coin before it is listed at any exchanges. In other words, the token is sold to a selected group of people. A presale takes place before the initial coin offering.

A presale is important to investors and the company.

Investors: These are the buyers of the token or coin. They buy the coin when it is still very cheap. This is because of the huge discount that the token owners give in order to make many people know about the token.

Usually, people who buy the token in the presale period make huge profits later. However, the downside is that investors may not know if the presale is genuine and if the coin will fare well in the market. As a result, the risk is very high to the investors.

Token owners: In this case, the owner refers to the business or project team. First the team is able to raise the initial capital required to expand the project. Second, many people come to know about the token. This raises interest for people to buy it during the ICO. Anyway, it is the norm with many companies to hold Presale ICOs.

Pros

There are several pros for adopting a presale:

  • The project attracts a large community of enthusiasts. These are the people who supports the project and will buy the token in the future.
  • The project and coin becomes widely known. This is because during the presale there is a lot of promotion of the coin. In order to get more supporters, companies normally create many social media platforms.
  • If the token becomes successful in the future, the early adopters will earn much money.

Levelnaut Presale

The long awaited presale of the Elven coin kicked off on 19 March 2021. The Elven coin currently sells for only $0.11. This token is likely to become successful because it is backed by products and services. Details of the presale are found at its website: ElvenCoin.

Levelnaut ambassadors: The company is planning for an ambassador program. Interested people can join. Writers, video creators and community managers are required now. The telegram group is ElvenCoin.

Cons

  • The hype that surrounds a presale may attract scammers.
  • The early investors have no knowledge whether or not the token will become successful. They buy the tokens based only on speculation.

Conclusion

As discussed above, a presale offers both the investors and project owner’s good opportunities. If the token succeeds the early buyers get huge profits. The presale helps to raise funds for the team to expand the project.

 

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Mchapeyama
Mchapeyama

I am a blogger and writer


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