For a project to succeed, it needs funding, and cryptocurrencies are not an exception. Crypto project developers have come up with different ways to raise money, which include but are not limited to presales, also known as pre-ICO, and initial coin offerings (ICOs). A crypto presale is a funding round that takes place before the official ICO, which gives investors a chance to get tokens before they are listed on cryptocurrency exchanges.
In this article, we will explore 9 facts about crypto presales, including what they are, how they work, and some of the risks associated with them.
A crypto presale takes place before the official ICO.
During a crypto presale, a limited amount of tokens is sold to early investors, giving them an opportunity to get tokens, usually at a discounted price as compared to the official token sale. Although a crypto presale is done with various objectives in mind, it is basically carried out to raise money to develop and launch the project. By doing a presale, the project builds a strong foundation for a successful ICO and its future growth. A presale also proves a project’s credibility and shows investor confidence in its future growth. The early investors become part of its community and loyal supporters, at least through the vesting period.
A project’s potential cannot be determined by its presale ranking alone.
If a project has a high presale coin ranking, this can be an indication of its potential success, but it is not always a guarantee of a bright future. The latest 사전판매 코인 순위 by Yujin Park gives insight into the top nineteen presale tokens. The high ranking is proof that many investors are interested in the token and have confidence in the project, but it is not a shield against future price fluctuations. However, a high presale ranking does show confidence in the project and feedback from crypto experts, which is key. When evaluating the future success of a project, investors should consider presale rankings and also consider other factors such as what the coin will be used for, its potential for adoption, and how it compares to other likely similar projects.
The tokens sold during a presale are usually subject to a vesting period.
When project developers offer tokens for a presale, there are terms and conditions that accompany the presale, and one of them is a predetermined vesting period. A vesting period is a defined time frame during which tokens or coins that investors get through a presale, ICO, or other funding method are locked and cannot be transferred, sold, or traded. This means that investors or team members who receive tokens during this time cannot dispose of them immediately.
This is done for various reasons, which include encouraging long-term commitment and investment in the project and preventing investors from dumping tokens as soon as they receive them, which could lead to an unexpected price drop of the token. The vesting period can be 6–12 months for investors and longer for those directly involved in the project, such as team members. After the vesting period, tokens can be released bit by bit, in full, or when certain project objectives are met. Once the tokens are released, token holders can use them for further investment, to purchase goods online, to gamble at an online casino, or to reinvest in the same project.
Although a presale is usually the offering of tokens at a discount, some presales offer tokens at a higher price.
While presales are known for offering discounted token prices, some presales may offer investors tokens at a higher price than the official public token sale, a move sometimes referred to as a reverse discount or upside pricing. Project developers do this for various reasons. If there is a very high demand for the tokens and there is a limited supply, the presale price might be raised slightly to discourage some potential investors and limit the number of participants to only those who are serious about investing in the project. This strategy also helps in getting the maximum funding possible. It is worth noting that a higher presale price is not a guarantee for a successful project or a higher return on investment. Doing your own research before investing in any project will help you minimize any potential losses.
There are ways to check the legitimacy of a crypto presale.
There are many ways in which an investor can research the legitimacy of a presale. However, it is worth noting that the crypto industry has no guarantees, and you should always invest responsibly. As an investor, you can look to see if the project’s website is professional and clearly states the presale terms and information concerning the project. The project’s whitepaper should be well-written, clearly explaining the project’s goals, technology, and tokenomics. It should not make unrealistic promises or guarantee returns since every investment has a certain degree of risk associated with it, and returns cannot be 100 percent certain.
For investors to take part in crypto presales, they should be whitelisted first.
Crypto presales are usually done using a whitelist method, where those interested in investing must register and meet the set requirements in order to qualify to take part. Interested investors register for the whitelist by providing basic information such as name, email, wallet address, and any other information that may be required. Applications are then reviewed by the project team, and approval or rejection of the application will be based on predetermined guidelines, which can include investment amount or geographic location. Whitelist procedures differ from project to project depending on project requirements.
Offering exclusive bonuses or incentives is a common practice in crypto presales.
In order to reward early participants and encourage more investors to join in the presale, project developers can offer exclusive bonuses such as early access to the platform or token generation event (TGE), additional tokens or token bonuses, discounted token prices, increased staking rewards, and early access to new features or updates. These incentives can be enough to motivate investors to take part in the presale and help build a loyal community of supporters who are invested in the project’s success.
Taking part in a crypto presale has higher risks as compared to buying tokens during the public sale.
Not all projects reach their stated goals or fulfil their promises. The token value may fall after trading begins, and investors may lose some or all of their investment. Besides these risks, investors can feel highly pressured during a presale due to FOMO (Fear of Missing Out), which might lead them to make impulsive or uninformed decisions that will come with many consequences. The key for investors is to complete thorough research and invest wisely.
A successful crypto presale can be a very good investment.
Investing in presales has been listed as one of the ways to get rich off crypto. Participating in a successful crypto presale can give early investors the opportunity to make a profit from the potential price increase of the tokens once they are listed on exchanges, similar to how early Bitcoin supporters have now struck it rich as the coin has increased in value over the years.
Conclusion
Crypto presales give investors an early opportunity to get acquainted with a new cryptocurrency project. The discounted prices, bonus tokens, and early access can make presales a lucrative investment opportunity. However, it is important to remember that investing in any asset can carry certain levels of risk, and cryptocurrencies are no different. Each investor must do their own research and decide if the choice is right for them before diving in.
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