Fair Launch vs ICO
What does Fair Launch in crypto mean?
A fair launch allows for equitable and fair distribution of tokens in the world of cryptocurrencies. Owned and governed by the community from the outset, a decentralized cryptocurrency ensures that everyone can start on equal footing. There is no early access or allocation of tokens. The price is the same for everyone to purchase at the same price.
Likewise, when a new project launches, foundation nodes are sold. A certain date is determined (as well as the number of nodes needed to be in place) that then allows all the receive the same reward for each node beginning on that day. The owners of those nodes need to ensure that their nodes are in place and running in order to receive that reward. Strong communities are created which benefit the projects represented by a fair launch.
Was Bitcoin a fair launch?
Bitcoin is considered a fair launch. There was no private sale, no pre-mining, and no initial coin offering. It allowed for all to participate following the same rules.
What is an ICO?
An ICO is the abbreviation for “initial coin offering.” A company can raise money to create a new coin, app or service and launch an ICO as a way to raise funds. Investors then receive unique cryptocurrency “tokens” in exchange for their monetary investment in the company.
The smart contracts platform called Ethereum is an example of a successful ICO project that gave out Ethers as its coin tokens. When the Ethereum project was announced, its ICO raised $18 million in Bitcoin. But not all ICOs end up as successful.
ICOs are very high risk, and just like most startups, many fail. The few projects that do go on to build ecosystems around their tokens and gain traction provide a high potential reward opportunity for investors who are willing to allocated capital during a token launch. Regulations, scaling issues, and hacking attempts are battled often by such projects and lead to failure.
ICO’s ARE RISKY AND A COMPLIANCE RISK
Often with token distribution in an ICO, the tokens fall into the hands of investors who tend to follow each other and that leads to extreme market fluctuations. Significant decentralization is the goal, to build something that becomes a decentralized public good used by a community of people.
Making the decision to support projects that validate the theory of a blockchain with a self-regulating system in place may be wise for those interested in entering the blockchain metaverse. Using a fair launch, a decentralized network is earned owned and governed by the community from the outset. That is why getting the node purchased up and running by a certain date allows for all the benefits when a new project launches.
