With one single tweet from Elon Musk, the price of Dogecoin increased. There are multiple reasons in the world out there that can lead to fluctuations in the price of tokens and coins, but their sale is always trendy. Ava Labs, a start-up founded by Cornell professor Emin Gun Sirer, roughly raised $42 million in a public token sale. Polkadot, the project spearheaded by Ethereum co-founder Gavin Wood, raised another $43 million in a private sale. But this all has been done on a scalable and trustworthy network. Let’s take a deep dive into this world.
The Saga Of Traditional Token Sales
2017 was the phase that introduced people with multiple mainstream consumers to their first token sales. Various forms and levels of legitimacy were submitted, but the ICO interface has not changed.
The process of interacting in an Ethereum Ecosystem is as follows:
- Complete the general KYC process by registering yourself by providing a name and an email address.
- Wait for the token sale start date, and hurry to the website to join the token sale queue.
- Select the number of tokens that you want to purchase and send your ETH to your wallet’s token sale address.
- Just wait for a few days, maybe weeks, for the distribution of your token.
Problems With Current Methodology:
- Scalability: The scalability of the token sale is limited by the transaction throughput of the blockchain the sale is built on. Problems like participation in the token sale raise their transaction fees to ridiculous prices and paralyze the entire network.
- Use Of Buy-In Economics: Every existing public blockchain network requires its participants to transact in the native token. The issue is that it forces users to ‘buy-in’ to that localized economy quite literally. The process of buying cryptocurrency is very complex, where many people fall back.
- Security Problems: When a user reaches the end of the token sale and purchases tokens of their desires, they have to struggle with cryptocurrency wallets. Due to a lack of experience and knowledge, many people have terrible experiences. Then the complexity of private security keys arises. Without proper and complete education, there is a high chance that they might lose their keys and make their wallet and tokens/coins vulnerable to attacks and scams.
Developing A Sustainable Token Sale Platform
Ethereum already has so much of a crowd on the platform. Therefore, flooding it with smart contract transactions is not an option to move forward with. Instead, we need to commit a bundle of transactions periodically to the root-chain, i.e., Ethereum main-net, so that the lessened burden can lead to a reduction of transaction fees and distribute the sale’s transactional throughput evenly across the network.
Now, we need a managed wallet architecture (MWA), where tokens are stored at a public address generated for each investor account. An MWA allows laymen consumers to depend on the platform for digital access to their digital assets. Users can also reclaim their address key pairs, and the architect is not private to the user’s pirate keys. Such innovation allows users to hold tokens at auto-generated and protected public addresses. Now, the users can claim full ownership whenever they want. An MWA helps in recreating a traditional application experience. It is paired with an event listening service to make sure transactions are successful.
Moreover, a platform needs to complete the on-boarding process by leveraging Know Your Client (KYC) within the framework of SEC regulations for every participating investor. There is also a need to exist individual investor purchasing limits during the initial phase of the token sale to ensure that the maximum number of unique investors can participate.
How Can Cryptocurrency Exchange Script Help?
Cryptocurrency Exchange Script is a leading name in blockchain technology and cryptocurrencies at a global level. A perfect amount of experience and expertise are mixed to develop a Token Sale platform to help you in every possible way. Our Token Sale Platform services are created by adding value-added features and solutions. It can be customized as per your business needs and standards. So, get in touch with us today, and request a demo now!