Tokenize Real Assets by using Reverse ICOs
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Reverse initial coin offering (ICO) is a method used by existing, established real-world businesses to raise funds and get into cryptocurrency. These enterprises have existing products and/or services, and they cater to real world customers. Essentially, reverse ICO acts as an initial public offering (IPO) allowing an existing enterprise to launch cryptocurrency tokens and seek funds through crowdsourcing.
The process for a reverse ICO works exactly the same way as for a standard ICO, though it is said that their valuations are easier and more transparent. When people pour their money into a standard ICO, the track record of real-world, established businesses offer a better and more trustworthy proposition for valuing reverse ICOs.
Reverse ICOs tokenize real assets
The reverse ICO first acquired people’s attention in South Korea. However, many anticipate that it will spread to other nations as investors continue to find worthy projects from tested firms that have successfully managed to achieve user growth and profit as well as technical IP and in-depth domain knowledge.
The primary advantage of a reverse ICO is that the company behind the ICO already has a working business model with users, technology, and key partnerships. This is a distinct alternative to the “built from a white paper” model presented by most ICOs, where the go-to-market strategy, including product development and user acquisition, is unproven and therefore both more risky and demanding in time, money and resources.
Further, reverse ICO provides an edge in the industry by providing leverage in the adoption of the cryptocurrency. The method of buying and selling cryptocurrencies is still riddled with many difficulties, with technical and trust issues yet to be resolved. The process of providing existing users integration is not just convenient, but also a better option compared to generating a new user adoption.
An established company that has deep knowledge of their customers can use the right motivational triggers and desirable outcomes to incentivize users to cross the not-insignificant hurdles that persist to understand and effectively use cryptocurrencies for products and services they are accustomed to purchasing with fiat.
Benefits of Reverse ICO
• Both customers and investors receive enhanced value proposition from a reverse ICO. The company that is putting it together already has an established user- and customer-base, hence; market entry is a lot easier and facilitated in advance.
• A company’s infrastructure is arguably among the most important aspects of a successful business. With reverse ICOs, the project relies on an already established team of professionals who, most importantly, are presumably used to working together.
• Enhanced value proposition for investors due to the presence of existing human capital and operational infrastructures such as accounts receivable, logistics, legal compliance, and customer support.
• Existing companies, unlike startups, have a measurable track record. Investors can easily take a look at their performance over time and determine whether or not they are worth investing in.
Difference between ICO and Reverse ICO
• ICOs are done by startups that have no market history .However; Reverse ICOs are done by well-established organizations that have an enduring history on the market.
• ICOs have no user or customer base; Reverse ICOs have solid user and customer base, which further can increase by reverse ICO.
• ICOs are done by the companies that lack existing products or services. Reverse ICOs are done by companies that have a number of existing products and services in the market.
• ICOs have no recognized team of professionals while Reverse ICOs have established teams of professionals.
• ICOs have the risks of project failure or being scam, but Reverse ICOs are deemed to be secure and failures are close to non-existent.