Reverse ICO: How it differs from traditional ICO’s?


The world is moving towards a tokenized economy. The companies with traditional businesses are looking for new trends to remain profiting. One such way is the Reverse ICO.

Initial Coin Offering was the popular strategy right from the year 2017. A lot of investors are being benefited from this scheme. Innovation is still blooming in this sector which cannot be denied!

So, Which scheme is actually beneficial? what can be the differences between both? Go ahead to know more!

What is Reverse ICO?

Before knowing what a Reverse ICO, we shall brush up on what is an ICO. Initial Coin Offering is a fantastic fundraising strategy where startups can enhance themselves. The new enterprises go for ICO fundraising when they come up with an idea. What they’ll do is, write a whitepaper, develop a website, build a perfect team, and then the public funding.

With ICO’s, new projects are being sold with underlying tokens. They are done in exchange for popular cryptocurrencies such as Bitcoin, Ether, etc.

According to Coinschedule, Initial Coin Offerings have raised more than $11 billion in 2018! With such growth and popularity, ICO’s are still the reason to remain benefited by the startups!

Okay, now you may be wondering, why Reverse ICO has evolved?

In a reverse ICO, an established company issues tokens to the investors for the business. These tokens are being offered in replacement for their traditional shares.

Each token holder will get premium rights & benefits. Added, they are also involved in the decision-making process of the company.

Moreover, a reverse ICO is a traditional share of allotment event. But with an exemption of happening with dedicated tokens rather than blockchain network.  

As the established companies would have worked with the business models, the Reverse ICO makes them more secured. Added, it would limit the risks of fraud and capital loss.

While looking at the future of Reverse ICO, they will still be potentially discovered to a larger extent. Once this trend is widely adopted across the globe, new jobs and industries will bloom.

Reverse ICO’s Vs Traditional ICO’s: The key differences

  • In Initial Coin Offering, companies require funds before the product is being developed. While in Reverse ICO, the established companies ask for funds after the product is being developed!
  • In Reverse ICO’s, companies with great history take part in enhancing themselves. But in case of Initial Coin Offerings, startups who are willing to showcase themselves to the world take part.
  • In ICO, since startups are being involved, they need to create a new user base. Reverse ICO’s have a potential customer base available.
  • Initial Coin Offering doesn’t involve the complete set of professionals. In Reverse ICO, a well-established team is already available.
  • ICO’s can sometimes have a risk of failures or scams. But Reverse ICO’s are being found more secure and free from scams.

Why is Reverse ICO important?

If you are an established company with a great history, you can consider Reverse ICO’s for:

  • Remain Updated

In this fluctuating world of technology, it is important to stay relevant. By conducting Reverse ICO, the companies can remain in the competition. This is through gaining a technical knowledge of the current industry.

When the company remains updated with the current industry, there are high chances of gaining a new customer base.

  • Fundraising to continue renewing

There are plenty of companies who are marching towards Reverse ICO strategy. The energy sources such as Solo Energy, Sun Exchange are actually looking for funds right now. This advanced technology has helped them with fundraising strategies.

Here is one of the success stories of Reverse ICO:

Kik, one of the social media launched in the year 2009, has opted for Reverse ICO. The app has nearly 300 million users and has raised over $100 million during the token sale in 2017.

The company was dependent on Facebook & WhatsApp for Ad-Supported Revenue. Once it entered into the Reverse ICO space, it has shifted to the Blockchain industry.

Kakao, one of the popular messaging platform in South Korea has planned to launch Reverse ICO in the upcoming days.

What are the major benefits of Reverse ICO?

Reverse ICO’s have greater benefits than the traditional ICO’s. This is due to the fact that they are built on something which is existing already.

  • Assurance

With the existing projects, Reverse ICO reassures on investing. You have a company with use cases, real stories, a perfect team, existing user base. Thus no doubts, your business will succeed faster!

  • Reduced Risks

Since a well-established company is being involved, the risk of scams is lesser. This is yet another benefit of Reverse ICO.

  • Business Expansion

You would wonder, “why established companies are involving in ICO?” The reason is for expanding the business. By this, they can gain new customers and enhance profits & business.

  • High-Value Scheme

You may be thinking about the existing users of the company. Existing customers are all the way benefited with the increased value proposition. The reason is an established user and customer base which makes the market entry easier.

  • Security & Value

Reverse ICO’s are quite friendly and safe for investors. This fact pertains to both the confidence of companies and the expectation of the value of the token. Yes, the value may increase in the future!

Summing Up:

In Summary, both Traditional ICO’s and Reverse ICO’s remain profitable for the business! If you had referred the history of Initial Coin Offering in the year 2017, most of the investors are lucky enough to reap benefits! If you are a startup, it is well and good to go with Traditional ICO’s.

On the other hand, if you are a reputed enterprise with a long history of a success story, Reverse ICO can be a better choice. This scheme can, in turn, lengthen your success stories without any doubts!

If you have a well-defined idea on any of these strategies, ICOCLONE is here to help you with the work done! With extensive expertise in ICO platforms, we people are readily available to provide you with top-notch solutions!

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