Why do blockchain companies need ICOs (Why does blockchain need to be listed on exchanges)?

Why do blockchain companies need ICOs? ICO is a form of fundraising and financing for blockchain companies.

In traditional markets, many companies refer to ICOs as Initial Public Offerings (IPOs) because investors are often reluctant to engage with the concept of cryptocurrencies. However, with the development of ICOs and the improving regulations and supervision, new attempts and innovative approaches are emerging. For example, the recently widely discussed “IEO” and “STO” are both aiming to provide fundraising opportunities for project owners. So why do blockchain companies use ICOs? Many startups do not fully understand what ICOs are, but they want to use existing technologies to raise funds or issue tokens or private tokens through ICOs in order to establish their own ecosystems.

ICOs can make it easier for entrepreneurs to obtain investment opportunities and participate in them, and they can also generate more income. This method can also help those who are already involved in this field to create value and achieve better returns. The main purpose of ICOs is to raise funds to develop the community and expand their business. Therefore, ICOs are usually open-source tools used to develop platforms for more teams to join and create and operate projects, so that they can promote the development and progress of the industry globally.

ICOs are a new type of securities issuance model for specific industries, allowing investment in certain types of equity. However, it is currently uncertain which categories of equity have completely different characteristics. For example, Bitcoin and Ethereum are both supported by the US government and have no financial institution responsible for them. In addition, most ICOs are conducted by unapproved or unregistered companies. ICOs can lead to fraud because they lack verifiable information; ICOs must meet exemption conditions to carry out activities; the assets involved in ICOs cannot guarantee their authenticity; if an ICO successfully holds a crowdfunding campaign, this situation needs to be announced to the public; timely action must be taken once problems are discovered.

For blockchain companies, ICOs can not only promote project growth but also achieve other purposes. For example, through ICOs, some projects can obtain partial profits. The purpose of ICOs is to encourage people to pay active attention to the blockchain field, reduce costs, increase efficiency, and increase returns to a certain extent. ICOs also help attract more potential investors and capital, especially from early investors, including the purchase of fund shares. However, ICOs also pose a major risk, which is the legal risk associated with ICOs.

Why does blockchain need to be listed on exchanges

Editor’s Note: This article is from Interchain Pulse (ID:HiveEcon), written by Yuan Shang, authorized to be republished by Odaily.

As the blockchain industry has developed, it has experienced three bubble bursts and four death spirals. However, from historical data, the blockchain still has enormous growth potential and application space in the financial field, and it is currently in the forefront of a major revolutionary change. “Exchanges” are one of the important components of the development of blockchain technology.

Exchanges can provide asset custody, and trading platforms allow users to directly conduct business operations such as buying and selling digital currencies through exchanges. This is an important infrastructure for traditional securities markets. However, for ordinary people, there is still a lack of information about these exchanges. If you want to sell the coins in your wallet, you must have a dedicated service provider to handle all your private keys. If you need to do something like sending an email to various exchanges or other places to receive or send voting or tokens, many exchanges do not have such service providers, and even exchanges themselves do not do such things–so most companies choose not to provide customer service or require customers to pay for it. In addition, we can also see that many exchanges use exchanges to match transactions because exchanges prioritize the security of users’ funds, which can ensure their own safety and reduce losses. Therefore, many people believe that “exchanges” are an important infrastructure for the next generation of business models. Why does Bitcoin need to be listed on exchanges? It is because people generally have a high demand for digital currencies, and cryptocurrencies are also a mainstream concept circulating worldwide. The decentralization feature provides many investors with a new way of investment: “decentralized value.”

In fact, in the past decade, with various innovative forms emerging one after another, the price of Bitcoin has been soaring. In early 2020, the price of Bitcoin reached a high point of around $20,000 and then fell back, and then rose to a high of $40,000. At that time, Vitalik Buterin, co-founder of Ethereum, said, “I have seen the tremendous power of Bitcoin.” He also mentioned that he personally believes that BTC can continue to exist in the long run and achieve higher returns. Of course, some people believe that this is a failed investment opportunity because they hope to concentrate their wealth. However, because Bitcoin is not a fiat currency but is based on smart contract issuance, it cannot anchor the dollar like the US dollar, so Bitcoin cannot become a real fiat currency and can only be replaced by gold, which is called stablecoin USDT. In addition, according to Bloomberg, after the Bitcoin price plummeted more than 70% in the bull market in 2017, a similar situation occurred. Since 2019, Bitcoin has continued to rise and broke through $60,000 in December last year.

DeFi has had the largest increase since the first three quarters of 2018, with a total value locked of $1.47 billion, nearly triple the growth compared to the same period last year. During the same period, Ethereum also reached a new high, with a daily average trading volume of 147,000 coins. However, since the second half of this year, the market volatility has significantly decreased, and DeFi is the most prominent example. How has the price of tokens performed under the DeFi trend?