Initial coin offerings or ICOs have opened a whole new dimension to how startups garner consumer interest and raise funds for realizing their projects. In most countries, ICOs are largely unregulated, allowing for greater flexibility for Blockchain-based companies to pitch their products or solutions to prospective investors. However, lack of regulations and growing skepticism among the populace about investing in ICOs, given the rampant rise in the number of fraudulent ICOs reported in recent times, creates a major pain point for organizers of ICOs.
This issue can be significantly alleviated by maintaining transparency and increasing the investor understanding about the project. This makes the ICO whitepaper—detailing every aspect of the cryptocurrency or token, right from the commercial standpoint to the technological aspect —a highly critical element of any ICO. This document is often the basis on which investors decide upon investing in an ICO and also plays a crucial role in building consumer confidence about the ICO.
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This article will give you a quick rundown on all the aspects to consider when working on the all-important ICO whitepaper.
The whitepaper should talk to the investors – Convey the idea, why it is important and why this ICO is a great opportunity to take part in the project. The whitepaper can have a lot of contents and on a minimum scale, every ICO should have the following contents in order.
Your target audience may not have the technical know-how about the various aspects of the cryptocurrency or token. Easing the reader into the document, with an easy to understand write-up and then gradually moving into the technical aspects of the token would be the best approach. Highlight the unique selling point of the cryptocurrency or token and how it compares to the others in the market. The whitepaper needs to serve as a beginner’s guide that caters to the technically uninformed as well as a rundown for the seasoned investors. Also, while the average length of a whitepaper is around 100 pages, this cannot serve as a benchmark, as a well-written whitepaper of less than half these number of pages can convey the intended message, without losing the reader’s interest.
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Given their exhaustive nature, whitepapers can get monotonous. Infographics not only help present information in an easy to understand manner but also help the reader to be engrossed. Infographics and pictorial representations interspersed between the whitepaper can act as section breakers and also serve as a synopsis for parts of the document, which can be referred to by the reader, rather than having to read through the entire section. It is especially beneficial to make comparisons of the scenario before the launch of your particular product or service, or how your cryptocurrency stacks up against the competition. Need to ensure that all images and elements used are relevant to the matter and serve a specific purpose. Also, one needs to be careful so as not to overload the whitepaper with such images, as it may make the document seem shallow.
An effective whitepaper is one that helps build investor confidence by providing details of the market cap of the ICO token and can attract investments by talking about the estimated valuation of the cryptocurrency post-launch. How the token will behave in future, how the investor will get benefited with the token, how the valuation of the token can increase, all such information needs to be backed up by statistics and calculated assumptions, so as to gain investor confidence.
One of the most important aspects of any ICO whitepaper is building investor confidence by presenting all vital information about the organizer. Given the recent spate of incidences of fraudulent ICOs, this aspect requires a lot more attention than ever before. Provide a detailed overview of the company, its history, financial information pertaining to the company, and also the purpose of deploying the token. Also, highlight how transparency is at the core of all operations related to the token and how the company would continue to communicate with investors and vice versa during and after the ICO. The company can further build consumer confidence by providing detailed information about technology, patents, copyrights, and business model, among others, deployed by the company for the ICO.
An ICO whitepaper serves as an executive summary that highlights the key points of the ICO and plays a critical role in arousing the interest of the investor by providing an overview of the market and how the token will affect it. It helps build a common ground for the company and the investor, wherein the company offers a realistic picture of the market scenario before and after deploying the ICO. Investors closely scrutinize the whitepaper for all the possible internal and external risks that may affect the ICO. This includes technological, political, and legal factors that could affect the company and the ICO. It helps showcase the transparency of proposed operations of the ICO. A well-documented whitepaper based on the aforementioned points would serve as the perfect marketing material for your ICO and helps build investor confidence, subsequently translating into higher investments in the ICO. You’re all set and ready to go then. Happy ICOing!