What Is a Public Sale?
In the blockchain world, a public sale refers to the process in which a company or project makes its tokens/coins available to the general public before listing them on cryptocurrency exchanges.
Innovative Fundraising
Public sales have become a popular trend in the cryptocurrency market, allowing blockchain companies to raise capital by selling specific tokens or coins for their projects.
The funds raised through these sales are often used to launch the platform or application associated with the project.
This type of fundraising is known as an Initial Coin Offering (ICO) and is akin to a next-generation crowdfunding model.
An ICO typically consists of three stages:
- Private sale
- Pre-sale
- Public sale
Modernizing Token Sales
Most token sales in recent times occur on the Ethereum blockchain, utilizing smart contracts to collect Ethereum tokens and immediately swap them for the newly issued tokens of the startup.
This process is peer-to-peer and does not involve exchanges or brokers.
The ICO begins with a private sale, where selected individuals who align with the goals of the ICO are given the opportunity to purchase tokens before the general public.
This is followed by the pre-sale phase, which offers individuals an exclusive “early bird” opportunity to buy coins before the ICO becomes public.
Pre-Sale Advantage
The pre-sale period allows companies or projects to accumulate funds and launch effective marketing campaigns before fully launching their project or app.
For investors, it presents an opportunity to secure a higher discount or bonus compared to the public sale while mitigating potential risks associated with private sales.
Crowdsourcing Growth
The public or crowd sale is the most crucial stage in the ICO’s path to success.
It is widely promoted and advertised to attract a larger audience.
Although fewer bonuses or discounts are available compared to the pre-sale, the public sale provides an opportunity to participate in the project’s growth.
Advantages of participating in a public sale include:
- Predictability of the ICO’s outcome based on the previous stages.
- Lower risk since the project is more developed at this stage.
- Greater liquidity due to a shorter time frame to trade the token.
- Reduced impact of cryptocurrency price volatility.
However, there are some trade-offs associated with the public sale:
- Lower discounts compared to the pre-sale period.
- Potential limitations on the maximum investment amount per investor.
- The public sale may be canceled if tokens are sold out during the pre-sale.
- Risk of token dumping when purchased at a discount.