How to Buy Early-Stage Crypto Tokens

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The story of cryptocurrency is taking a new turn in 2022, with users finding a new opportunity in metaverse tokens. Used within virtual worlds to buy in-game items or space in a metaverse platform, this form of utility token is being eyed by experts as a promising new avenue for crypto. This follows the explosion of cryptocurrency and blockchain across all levels of society. It is even being taught at higher education institutions, with the Wharton Business School now teaching a dedicated blockchain-focused class as part of their business degree. Today, to be a financial advisor or analyst with a financial services degree requires a knowledge of the latest trends in strategy, money and banking, wealth management, sales, marketing, and trade. And that means a good understanding of digital currencies. The good news is that you don’t need a financial degree to purchase crypto tokens.

These utility tokens often grow from early-stage cryptocurrency projects. An initial coin offering (ICO) is a mix between an IPO and online crowdfunding, but for new forms of cryptocurrency. The idea is to buy a first-wave cryptocurrency at a discounted price and potentially benefit someday if the crypto appreciates in value. Now, there are also IDOs or initial DEX offerings.

When you launch a token on a decentralized and permissionless liquidity exchange, the exchange manages the fundraising event on behalf of the project’s operatives — and these projects are called IDOs. By immediately listing tokens on the decentralized exchange, you can avoid lock-up periods for the ICO, as well as the pre-mine issuance system that favors founders over community members. IDOs are poised to become the successor to ICOs because they offer better and immediate liquidity at every price level.

However, regulatory oversight on both ICOs and IDOs isn’t very stringent yet, and purchasing an early-stage crypto token can be tricky. Here are some tips to consider:

Not all early-stage tokens are created equally, and initial coin offering risks are tied to fraudulent activities. Unscrupulous actors raise money illegally through a slow process of engaging prospective clients through conversation. It’s necessary to approach any purchase with a strong background in financial theory. You should be aware of the types of products, risks, market structure, prohibited practices, and regulatory agencies, if any, related to ICOs. Knowing the fundamentals behind the product will allow you to make better decisions.

Unlike IPO valuations, there are no underlying financial records to comb through. ICOs mostly rely on hype, public sentiment, and potential uses of the coin. Before buying, be sure to study up on the subject and speak with experts. Keep an eye out for red flags like guaranteed high returns, pressure to buy immediately, unsolicited offers, or unlicensed sellers.

Once you’re ready to look for interesting tokens and projects, you should choose an IDO launchpad to see which tokens are already listed on the DEX. Reputable launchpads allow fair access to token sales for promising projects. They limit token allocation to prevent whales and bots from locking small buyers out. Launchpads also provide anti-scam vetting and Know Your Customer checks (KYC) for project credibility, and even ensure that the IDOs launched have sufficient liquidity.

Of course, not all launchpads offer due diligence, so it’s important to be selective. Explore launch platforms like VentUp, which accept projects only after a thorough due diligence period, both pre- and post-IDO. Do note that even if a launchpad gives a green light on certain projects, it’s still up to the buyer to evaluate if the project’s tokenomics and security meet their needs.

Found a launchpad for decentralized exchange offerings? Great. Now, getting in on an IDO only requires you to win a whitelist spot on your launchpad of choice. Whitelisting is something all major launchpads have in common because IDOs tend to raise smaller amounts. Platforms have to limit the number of buyers and the amount of launching tokens each buyer can purchase.

To win a whitelist spot, you’d need to hold a minimum number of the launchpad’s native token, and those with larger holdings often gain more entries. In adherence to the IDO ethos of fairness, most individuals can only win once. You would also need a Web 3.0 wallet like Metamask, then undergo a KYC check to get whitelisted. Keep in mind that many IDOs don’t permit buyers from certain countries to participate, so check first if you’re eligible before signing up.

If the campaign is successful, you should explore the utility of your tokens, as these often relate to interesting blockchain projects — like the metaverse gaming tokens. For instance, the Basic Attention Token (BAT) is a utility token used by digital marketers to pay for ads on the Brave browser, which is a privacy-focused Chrome and Firefox competitor that blocks ads and tracking by default. Users who want to see ads can choose to join a program that pays them in BAT for viewing ads.

VentUp launchpad is a decentralized funding platform that aims to accelerate the adoption of blockchain protocols. We directly connect innovative blockchain and Web3 projects to community members through a fair and compliant community sale. Check out our verified project listings today.

Specially written for Vent Finance

By: Regin Jalissa

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