Even though there have been possible risks of cheating and scams, an ICO or initial coin offering is still the most infamous concept of fundraising in the crypto world. Most of the time, the motive behind the ICO launch depends upon the company’s need. And when interested, it executes the plan of selling tokens to the investors. It is a kind of a crowdsourcing method implemented for funding purposes. And it is done to finish the process of launching and efforts to make a mark in the wider market. You must be getting updates on the latest ICO listing by following the Cryptoknowmics site. But have you ever heard of reverse ICO? If not, then you will know it today.Latest Ico listing
There are many firms based on blockchain technology that have come up through initial coin offerings, where some proved to be successful. So there are companies who have been for a long time and are too interested in the associated fundraising technique. The process is called Reverse ICO.
Motive Of Reverse ICO
Sometimes you might notice the similarity between the reverse ICO and the usual ICO. But both are different from each other in terms of launching perspective. Firms that are already established opt for token selling to those investors who seem interested in decentralization. The purpose behind this is to emanate more investment or for the release of a section based on blockchain technology.
Advantage Of Reverse ICO
There can be many advantages of Reverse ICO. It is mainly applicable or says given more importance among the established firms that adhere to regulatory policies, or those who have experienced with the implementation of ICO. There is more value in it. Also, reverse ICO can prove legal with trust and fiscal clarity. It is all because it does not demand a strict regulation policy, which is prevalent in initial public offerings.
If you notice initial public offerings, then you will find that they don’t have unlimited customers to offer, and are stick to only the licensed investors. But this is not a similar case with the reverse ICO. Rather, it encourages firms to involve in fundraising techniques among worldwide investors. And the best part is there is no hurdle in terms of any regulations during this process mostly.
Other Benefits Of Reverse ICO
Apart from all these advantages that have been mentioned above, there are other possible benefits provided by reverse ICO. Apart from fund-raising techniques, reverse ICO can also be beneficial for those companies who are inquisitive to generate their economies ranging in the services of their goods. Moreover, a reverse ICO can also be useful for a company regarding its ownership, as well as transforming a function into a decentralized state, and to help in the distribution procedure.
This makes it more efficient for an IPO. Firms that have been convinced with the idea of reverse ICO also include cryptocurrency exchanges. They are already interlinked with the world of a decentralized ledger, blockchain. Many of them are still active in running their businesses apart from it.
Suppose any cryptocurrency exchange platform expresses interest in releasing its digital token with the help of reverse ICO, then it tends to become independent and self-sufficient also. This will give them a chance to outshone other competitor exchanges by facilitating their customers with more incentives so that they can execute the transactions of their cryptocurrencies.
Differences Between An ICO And Reverse ICO
In the above sentences, I have mentioned the advantages of reverse ICO over traditional ICO. But there are more other facts that also define the differences between the two fundraising concepts.
Initial coin offerings have been much preferred by the new businesses or say startup firms but have no past market record. Whereas reverse ICO has been executed by the organizations that have been in operations for a long time and in comparison to startups, they have market history. Reverse ICO tends to have a robust customer and user base, but in ICO there is nothing like that.
Companies having no persisting products or services initiate a fundraising method like ICO. But companies who are well-established and having products and services at present prefer reverse ICO. Where there is no possibility to find a team with expertise in ICO, one can expect the opposite in reverse ICO. This means it consists of a team of experts. One should also know that there is a big risk of scams and project downpour prevalent in initial coin offerings. But there are no such big issues in reverse ICO.
So this is what you should know about reverse ICO. Those who have never been familiar with this term before, now are cleared with the concept. To avoid confusion between the two fundraising concepts, I emphasized the differences between the two. If you read the differences between the reverse ICO and traditional ICO, you will find that reverse ICO has more advantages than ICO. Reverse ICO is mostly preferred by established businesses, whereas ICOs are used by newbie or startup businesses. If you want to get updates of the initial coin offering listing, then better flock on to the Cryptoknowmics website.