The cryptocurrency ecosystem is still in its early stages and as such, adoption is quite slow. In fact, studies show that in the U.S, only 8% of people hold cryptocurrency investments. Compared to the number of blockchain startups and projects that continue to emerge, competition is tough.
While this is frustrating for investors who find it difficult to discern the good projects from the bad, it is even more so for blockchain startups trying to prove themselves. These companies are faced with several obstacles– from the talk of strict ICO regulations in the future to the ban on ICOs in countries like China. The looming possibility of getting hacked, coupled with FUD from investors doesn’t help either. Although uncertainty is a normal thing in business, too much of it makes things difficult.
Fortunately, as with any new technological field, adoption, although slow, will improve over time. When that happens, blockchain startups must be ready for the coming load on their networks and the swarm of new consumers who will be looking for services to patronize. This means that the major work should be focused on operation, security, and scalability.
As most blockchain startup teams are relatively small, pending the growth of the organization, there is no room or financial allowance for extra members. This may leave the current team overworked and juggling the development of their platforms as well as the issue of funding.
There may also be gaps in areas such as customer service and marketing that are equally as important as the tech itself. So what can blockchain startups do to ensure that every part of the business is taken care of without cluttering their systems? The answer is simple: Outsourcing to firms that are well-equipped to provide out-of-the-box token funding solutions.
What are Out-of-the-Box Solutions?
According to Mike Raitsyn of Snowfox Technologies – an airdrop and campaign management platform that connects crypto and blockchain startups to investors, Out-of-the-box solutions are the “products that significantly reduce the process of preparing for ICO/STO, thanks to ready-made solutions necessary for the entire process of selling tokens”. These include KYC / AML / PEP user verification, payment processing, investor verification, data processing and cryptocurrency processing.
In the past, the ICO and standard token offering (STO) process were handled with a DIY approach and this has been less than ideal. “The issuers (tokens) are just passing through the “9 circles of hell”, repeating almost the same processes in order to comply with international compliance, to develop a mechanism for working with personal users data, inspecting various types of investors in different regions, processing payments, distribution of tokens, etc.” Raitsyn said.
Firms like Snowfox and MPCX both offer out-of-the-box blockchain solutions which give startups a window of up to 2-3 months to independently focus on creating a platform for working with their investors. This comes without the need to bother about the token sale process.
“Our solution already includes KYC / AML, cryptocurrency processing, marketing tools, loyalty programs, a system of promotional codes and work with influencers – all that is needed to make private and public sale in the most convenient way for the token holders and the ICO itself,” Raitsyn said.
What to Look Out For in Blockchain Solutions Providers
Choosing which company handles your ICO is a step that can make or break the entire process. A company that doesn’t align itself with your vision will definitely generate poorer results than you hoped for. However, there are certain things to look out for when choosing a company to outsource your ICO needs to.
- Ability to Provide Top-Notch Security
Typically, any company that handles your ICO should value security as much as you do to avoid any form of theft. This includes verification, investor authentication and other relevant forms of security. While this may seem obvious, there are startups that take security for granted.
One example is the case of the Coindash ICO which was hacked in 2017 and robbed of $7 million. Prior to the hack, there had been security concerns with the company’s code which were ignored. It’s painful to lose money after your team has put in so much work. To avoid this scenario, you should use firms that have carried out secure and successful ICOs in the past.
- A Wide Scope of Functionality
Apart from your company’s ICO, there are other important things that must be done to ensure the smooth operation of your platform even after the crowdsale. These are things like smart contract technicalities, design and analytics.
Although there are companies that are well versed in one or more of these things, outsourcing to different firms at the same time may complicate things down the line. This is why it’s a better option to choose a blockchain solutions firm that has a broad range of functionality on a single platform.
- An Interest in Innovation
The cryptocurrency ecosystem is changing gradually, especially as it trends towards ICO regulation. Although there are several positive aspects of this change, like improved security and transparency, protection of property rights and increased investment by big Wall Street players, there are also several negative aspects.
Firstly, there are too many offers in the market and this may only increase with time. Secondly, public sales are beginning to dwindle while the average budget for planning an ICO has continued to increase, even surpassing $1 million in some cases. Depending on future regulations, these negatives may become worse.
Having forward-thinking blockchain solutions firm on your side helps you to see future problems from a different perspective and share the burden of tackling them. An innovative blockchain solutions firm will typically have a bird’s-eye view of how the industry is changing. This quality is highly important and will certainly prove valuable for a blockchain startup in the long run, especially as the industry is still in its early stages.
For example, companies like Snowfox Technologies offers a range of essential features and services on their platforms which plays a crucial role in the success of ICO campaigns, and in turn the project itself. The general offerings include;
- Coverage of entire ICO process, starting from planning to execution and promotion.
- Provision of a scalable bookbuilding platform that can accommodate and facilitate any type of token crowdsale.
- Accurate estimation of ROI, statistics and other relevant analytics.
- Extra security including KYC/AML and support against DDoS attacks.
- The opportunity to create a landing page and token airdrop page on its bookbuilding platform with customizable front-end design in English, Russian and Japanese languages.
- Creation of ERC-20 tokens with special discounts and Bonuses.
- Development and management of smart contracts and blockchain-based web applications.
- Provision of secure cryptocurrency payment gateways for token sales with automatic withdrawals to cold storage and very low fees. This also includes simple Visa and Mastercard integrations, to make it easier for investors to buy tokens.
- Continuous support throughout the entire process.
There have been few successes along the road as well. By availing such service from Snowfox, one of the projects — Crypterium raised about $50 million through token sales.
Raitsyn gives a hint about the opportunities lying ahead by saying, “people are ready to go towards the blockchain industry, to study, receive knowledge and constantly learning new skills, opening new horizons for their projects and developing the technologies worldwide.”
The ICO terrain is tougher and more competitive than it was in 2017 because the space has become saturated with many startups and persistent meddling by regulators is serving as a hindrance to investors. To outdo the competition, blockchain startups must have a great value proposition, strategy, and overall functionality. This is already enough work without adding the intricacies of planning a crowdsale to the mix. That is why outsourcing this aspect is important and may define how the company is perceived by potential investors.
While outsourcing is meant to make things easier for blockchain startups, its process is not easy. There are so many things to figure out like which projects should be outsourced and who exactly to work with. Snowfox takes away that problem by automating the process and laying down several options that make it easier to decide.