Most token sales nowadays run on top of the Ethereum blockchain through a ache contract that collects Ethereum tokens and mechanically exchanges these for a fresh nominal presented by the start-up company. This happens wholly P2P without any exchanges or brokers as middle men .
Every ICO has a different price mechanism ( price decreases, increases, is fixed, non existent ) *. For more information on types of ICOs click here. If the rally rate of the token write out is fixed giving investors the opportunity to get as many tokens they like at that fix price. This mechanism is appealing to large investors because they don ’ t have to worry about influencing the price by purchasing a big numeral of tokens. After a token sale ends, there is a cool-off period where tokens might be frozen ( investors are not allowed to transfer their coins for a certain come of prison term ) or kept away from exchanges. After the the end of the cool-off period, exchanges can start listing keepsake frankincense allowing early people to trade it at a market price.
1. Register with an Cryptocurrency Exchange
To participate in an ICO you need cryptocurrencies, normally Ether or Bitcoin. You can not participate in an ICO with decree currency. If you don ’ metric ton own cryptocurrencies, you will first need to buy some. The best room to buy bombastic amounts of Bitcoin is through on-line exchanges and send your transplant money from your bank account to your newly created score with a crypto currency commute. Please note that the registration procedure might need some days due to strikt KYC and AML regulation. If you don ’ t have a bank report or don ’ thyroxine want to give up your privacy by sending your id to a third party like Coinbase there are other options like buying ether from an ATM or locally from other people. More information read our tutorial on How to buy Bitcoin & other Cryptocurrencies.
2. Exchange Fiat for Bitcoin or Ether
once you registered on an exchange and the money from your bank account has arrived in your cryptocurrency exchange account, you now have to exchange your EUR, USD, etc for the cryptocurrency you want to buy. This serve take a few seconds to minutes depending on when the adjacent block is created ( bill : block universe times differ from blockchain to blockchain ). Your cryptocurrencies will be send to an on-line wallet offered by the commute you registered with. Keeping large amounts of coins on-line might be dangerous since on-line exchanges are vulnerable to attacks. In the by money has been stolen from on-line exchanges. Therefore it is highly advised that you send your cryptocurrency to a wallet which is under your control. For more information on how to securely store your coins read our tutorial on How to buy Bitcoin & other Cryptocurrencies.
2. Transfer your Coins from the Exchange to a Blockchain Wallet you Control
3. Set up your Wallet
Most token sales today happen on the Ethereum net. Therefore you will need an Ethereum wallet to participate in the token sale. not every wallet is desirable for ICOs. The most user-friendly and wide accepted Ethereum wallets are MetaMask and MyEhterWallet. MetaMask is a plugin for the Google Chrome browser. It is not merely a wallet but besides a lightweight Ethereum dApp browser. MyEtherWallet is a client-side wallet and does not hold your individual keys. It besides connects with hardware wallets like the Ledger Nano S or Trezor. Depending on the startup and the ICO one of these wallets might be recommended for the engagement. If the startup hasn ’ t defined a favored wallet for the ICO, we recommend using MetaMask .
MetaMask is a desktop type of wallet, and we do not recommend storing large values in it. Use it alone for the ICO and then move your funds to a more dependable target like a hardware wallet or wallpaper wallet. Don ’ deoxythymidine monophosphate forget backing up your wallet. Store your 12-word seed in a dependable position ( not in the cloud ). After your wallet is properly frame-up & backed up send Ether from your on-line wallet at the change to your MetaMask wallet.
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4. Buy ICO Tokens
Before you proceed make sure to read the general terms of the ICO and the keepsake purchase agreement. Most start-ups supply bit-by-bit guides for the keepsake sale engagement including screenshots for each step. Make certain you read these. You should besides join the social media channels including slack and follow the news around the ICO. sometimes token sales experience technical problems and staying up to date during the nominal sale is crucial .
All ICOs beginning either at a certain prison term or a previously specified blocking phone number. You can use an Ethereum blockage internet explorer to check the stuff numbers translates into real fourth dimension of the time you live in. bill that some ICOs end in a matter of minutes. consequently using wallets like Parity that allow for a more advance frame-up options might be recommended, if you expect the token sale to end promptly .
When the token sale starts, you will have to send ETH to the address specified by the team. You will need to set a proper gas restrict which is controlled by the MetaMask interface. After you send the transaction there are a couple of scenarios :
- You receive your tokens right after the token sale ends
- You need to wait for couple of days for your tokens
- You will need to manually redeem you tokens (look at eos.io)
notice ! In some cases, hackers have manipulated ICO websites, by exchanging the veridical ETH adress with their own ETH adress, which means that the money investors send to the ICO wallet adress indicated on the ICO web site was corrupted and the hackers got all the money rather of the team behind the ICO .
5. Secure your Tokens
After you receive your tokens in your MetaMask – or MyEtherWallet, or Parity – address make indisputable to transfer these to more plug wallet. You will need to have some extra ETH ( small come ) memory in your wallets to pay for transaction costs of sending money from wallet to wallet. note that this will change once Ethereum updates to Metropolis, but presently it is silent something you will need to keep in heed .
*Note : developers have the full moon freedom on how they want to setup the keepsake sale. Covering every potential ICO scenario is about impossible. A developer might decide not to sell his tokens at a fixate exchange rate but preferably lease people invest in his inauguration and then distribute the new tokens proportionately by giving each person a share of the tokens corresponding to the share of his investment which is separate of sum investments. In this lawsuit if a startup gets a single investor he/she will get 100 % of the tokens. Another option would be a dutch auction as presented by the Gnosis team for the first fourth dimension, where the sale starts at the highest price per token proportionately decreases until the end of the auction .