Crypto Academy Season 2 Week 1 Homework Post for (imagen) - ICO (Initial Coin Offering)

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Hello, Steemit Crypto Academy Community

After a few weeks of hiatus, the Steemit crypto academy courses resumed. This time, however, the number of professors increased and the difficulty of homework increased considerably. I chose the first homework of the new season from professor @imagen. The professor discussed the issue of ICO this week. He wants us to state what an ICO is, the differences between the ICO and the IEO, state the advantages and disadvantages of the ICO, and explain an ICO project that has started or is about to be completed.

To reach the course article of the professor

What is an ICO?

ICO is an English origin term. It stands for "Initial coin offering". It means the first money offer. As we know, if you know a little about the traditional stock market, it will be a little easier for you to grasp the ICO. The traditional exchange equivalent of ICO is IPO (Initial Public Offering) . Companies put their stocks on sale through ilay to meet their resource needs. This is what we call an IPO. I have said that the IPO's counterpart in blockchains, in this area of interest, is the ICO. Blockchain project developers organize events called pre-sales to obtain resources, develop their projects, and promote their projects.

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Ripple is the first cryptocurrency to be distributed with an ICO event. 1 billion XRP produced in 2013 was distributed to those who want to invest. Later, the noteworthy ICO project is Ethereum. In 2014, a pre-sale was made with 1 ETH = 0.0005 BTC. ICOs of 2017 had become very popular. Unfortunately, many people were defrauded due to ICO projects. Those who follow cryptocurrencies closely will remember. EOS was launched in 2017 using the ICO method. About $ 2.5 billion was raised, making it one of the tallest ICO initiatives.

I think ICO initiative is required. Because blockchain projects need a resource to thrive. They can only achieve this through ICO. Projects that cannot raise enough funds or do not have enough resources have difficulty in keeping up with their development.

I would like to briefly talk about the working principle of ICO. Blockchain developers first publish their white papers. They explain their goals, objectives, working principles, and the people in the team. They promote their projects through the press or other means. Next, a timetable is set for the ICO. ICO price and quantity are decided. People who want to participate in the ICO buy BTC, ETH or other methods.

Differences between ICO and IEO

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I have said that ICO means the first money offer. IEO means the first stock market offer. In fact, they are technically very similar concepts. The differences between the two are as follows.

(1) The ICO has a website owned by the developers. The exchange's own website is used in IEO. For example, ethereum uses its own website for ICO, while Binance uses its own website for IEO.

(2) It is unclear whether the coin will be listed on ICOs. In IEO, the exchange guarantees listing.

(3) There is a high probability of you getting scammed in the ICO. Because 80% of ICO attempts have been found to be fraudulent. If the exchange you join in IEO is a reliable and popular one, it is impossible to get defrauded.

(4) In ICO, you are not subjected to any procedure. Documents are not required from you. In IEO, the exchange will force you to approve KYC.

(5) In ICO, your interlocutor is project developers, in IEO, exchanges are your addressee.

Advantages and disadvantages of ICO

Let's talk about the advantages of ICO first. Most ICO entrepreneurs are a great opportunity for investors. The token price is sold at a fairly low price. It should be sold at a low price so that investors should show interest in the ICO initiative and provide sufficient funds. For example, it was launched 9-10 months ago with the Avax ICO initiative and 1 Avax was sold for $ 0.5. Currently Avax price is $ 32.63. Participants in the Avax ICO event made 65 times the profit. Don't you think this is a great opportunity? As I mentioned, the biggest advantage of ICO initiatives is that they provide high profits to investors. An investor participating in the ICO initiative also has some information about the project. Even if the person does not participate in the ICO initiative, it is an advantage to even review the project. He will have learned something.

The most downside of ICO attempts is the risk of fraud. According to the researches, most of the ICO initiatives result in fraud.

Another negative side of ICO projects is that you have to lock your token for a long time. For example, those who participated in the AVAX ICO initiative last year will not be able to sell their tokens for about 1 year.

Another negative aspect of ICO initiatives is this. Possibility of the token to be listed on stock exchanges or major exchanges. Think about it, you participated in the ICO initiative, paid money but the token was not listed on the exchange. How disappointing is that?

ICO Initiative = Avalanche (AVAX)

The Avalanche network was developed by Ava Labs, headed by computer professor Emin Gün Sirer. The project was launched in September 2020. Although it is a new project, it attracts a lot of attention from investors.

Avalanche allows permission or non-permission blockchains to run on a single network. Its scalability is quite impressive. It has the ability to verify transactions in less than 1 second. It is the one with the fastest verification feature among the smart contract platforms. It attracts attention with the feature of having all of the Ethereum development tools.

AVAX is limited in supply. The total supply is 360 million AVAX. The maximum supply is 720 million units. Towards the maximum supply, new tokens are issued and token burning is performed.

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It was wise to participate in the Avalanche Coin ICO. Because the ICO price was $ 0.5 ($0.85). Its current price is exactly 65 times the ICO price! Its total supply was limited and there was an attempt to burn the token. It was supported by large companies such as Andressen Horowitz and Polychain Capital. The concept, objectives, promises of the project were logical. Their primary goal is to tackle the problems in blockchains. They showed that they are very successful in this regard. There were 2 options in Avax ICO. If you are going to lock the token in the network for a certain period of time, you could participate in the pre-sale for $ 0.5. Those who did not intend to lock in tokens bought Avax for $ 0.85. I think those who do not lock tokens here seem to have an advantage. Because they both bought Avax cheaply and Avax price increased too much, and when the token lockout process is over, they will sell it at high prices. The ICO lasted 14 days and 17 million Avax were pre-sold.

Conclusion

If you want to be a good cryptocurrency investor, you need to understand what ICO is. You need to know what the ICO is, how it works. It is also essential to know that you need to gain good experience and awareness of ICO.

If you have participated in a good ICO initiative, it is possible to make a profit from your investment. If someone participating in an ICO in a bear period sells their tokens in a bull period, it is possible to earn up to 50X gains.

It was a very enjoyable and informative course. Thanks to Professor @imagen for this course.

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