Crypto presales and private sales are crucial stages for laying down the foundation for a public sale and the long-term success of a project. After a presale, various scenarios may unfold depending on the project and market conditions. Typically, a project might move forward to a public sale, however, the project may use pre-sales to receive feedback from early-stage investors to improve the development and testing of a token before launching publicly. Early investors and crypto enthusiasts often purchase new coins from crypto presales because they offer low prices, high possible returns, and the chance to support a new digital currency project (source: https://bestcryptopresales.net/).
The success of a presale can affect the momentum of the project, impacting the token’s price, market sentiment, and investor interest. Additionally, how well the project performs post-presale can impact the project’s credibility and adoption rate. This article delves into what early and potential investors can expect after a crypto presale concludes.
Token Distribution
After a crypto presale concludes, the project distributes the tokens to presale participants according to the terms outlined during the presale. The process typically involves verifying the identities and contributions of participants through the KYC/AML processes before the tokens are transferred to their designated wallets. Once the token distribution to early investors concludes, projects often have a vesting or lock-up period for the tokens before listings on crypto exchanges can begin.
Vesting Period
A portion of the tokens allocated to early investors is subject to a vesting period. Vesting periods refer to the gradual release of tokens over a predetermined schedule. It is important to understand that vesting periods can follow different patterns, which are:
- Linear vesting refers to tokens that are released in equal portions at a constant rate over a specific period of time. For example, investors could receive 1,000 tokens over a specific period of ten months.
- Graded vesting involves tokens being released in increasing portions at different intervals. The project’s team starts releasing smaller portions at the start, eventually increasing the release during specific time frames.
- Cliff vesting is when no tokens are released until after a specific period, which is then followed by either linear or graded releases.
Lock-up Period
A lock-up period prevents investors from selling or transferring tokens purchased during the presale immediately. Lock-up periods are much shorter than vesting periods, which could last a few weeks or months. The purpose of a lock-up period is to prevent token dumping after a crypto presale and to encourage long-term commitment from investors to ensure price stability. Once the lock-up period ends, investors are free to sell their shares, trade, and use them on e-commerce platforms or use them for crypto poker transactions.
Preparing The Listing on Exchanges
After a crypto presale concludes, to increase the liquidity and market visibility of a project, tokens or coins are listed on various crypto exchanges. Listing the token on multiple exchanges is a critical step for projects to increase the token’s accessibility, market exposure, and trading volume.
The process for listing tokens on exchanges includes comprehensive information about the token, its use case, and the project’s goals. The exchange will review the project’s legitimacy, potential for growth, KYC and AML process, and tokenomics. This is done to ensure that a project is not a potential scam, has no malicious intent, executes a rug pull, and protects investors.
The Squid Game token was listed on several crypto exchanges and experienced a rug pull scam that resulted in investors losing a collective sum of $2.5 million. The developers of the token absconded with the funds, selling their holdings, and leaving investors with worthless tokens. After the rug pull schemes, crypto exchanges implemented stricter vetting measures to ensure projects are legitimate and transparent.
Conducting the ICO or Public Sale
The initial coin offering (ICO) or public sale is a crucial phase after a crypto presale. The objective of the ICO is to raise additional funds for the project’s development and growth. Opening the token up for sale to a wider audience allows projects to raise the necessary capital.
Before the ICO, the project’s team typically considers a few key elements, including:
- Token sale structure: The project will have a token sale structure that will depend on the project’s goals, intended audience, and market conditions. The pricing structure for public sales typically relies on either market-based or utility-based pricing. Market-based pricing relies on supply and demand, competitor offering, and analyzing similar ICO tokens. Utility-based pricing refers to a token’s value based on its functionality and clear use cases.
- Pricing tiers: Although projects often use tiered pricing in presales to encourage early investors to participate, public sales use pricing tiers to incentivize and regulate demand.
Conclusion
After a crypto presale, projects may focus on generating interest and hype around their token. This would include marketing, community engagement, and strategic partnerships to attract a broader range of investors for the public sale. After the token sale and project development phases, the project provides ongoing support to its community, addressing any concerns related to the tokens.
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