Cryptocurrencies are revolutionizing the way transactions occur faster than crypto experts anticipated. The global cryptocurrency market cap is more than 997 billion dollars currently. The number of cryptocurrencies is increasing rapidly each year. With such rapidly expanding potential, it is the right time to take a dive into the cryptocurrency market. Your cryptocurrency development can be the next big thing in the crypto market. Hiring an industry-leading cryptocurrency development company can provide you with a one-stop solution for your cryptocurrency development needs.
Token Vs. Coin
There is always a slight confusion among people between a token and a coin. There is a fundamental difference between a token and a coin.
A cryptocurrency coin is a native asset of the network. It usually stores value and facilitates trading. Some examples of cryptocurrencies are Bitcoin, Litecoin, and Dogecoin, as the name suggests.
When it comes to tokens, they can be built on any already established desired blockchain network. Tokens are built for a project built on the network. Tokens can be backed with assets, utilities, or governance which the token holder can avail of later. Some crypto token examples are Uniswap, USDT, and Cronos.
Most budding entrepreneurs or startups are very curious about developing tokens which they circulate and create the funding they require to establish the business.
Stablecoin
With the Crypto market being highly volatile, a stablecoin development can be a suitable solution for investors who wish to invest with less risk. Stablecoins are pegged to real-life assets like fiat currencies, gold, silver, and much more. Stablecoins are better alternatives to highly volatile cryptocurrencies.
Fiat Backed Stablecoin
This is one of the most commonly known stablecoins. They are usually backed with fiat currencies with a 1:1 ratio, such as US dollars or Euros. The ratio represents that one stablecoin equals one fiat currency which it represents. The fluctuation in the stablecoin is directly proportional to the stability of the country’s economy. Fiat Collateralized stablecoins can be an easy and reliable investment for first-time cryptocurrency owners.
Commodity Backed Stablecoins
Commodity-backed stablecoins mostly back assets such as precious metals like gold or silver. The widely used commodity to back stablecoin is gold. Commodity-backed stablecoins are suitable for crypto investment to cut the intermediary charges the commodities are charged with in real life.
The commodities offer great value appreciation over time and make commodity-backed stablecoins a great investment opportunity for the coin holders.
Algorithm backed Stablecoin
Algorithmic stablecoin’s value is maintained consistently with the help of an algorithm. Usually, the two coins are pegged against each other, and the algorithm facilitates maintaining the value of the coin consistently depending on the demand and investor’s investment.
There are three types of algorithmic stablecoin, namely rebase, seigniorage, and fractional-algorithmic type kayaşehir escort stablecoin.
Rebase- The Rebase algorithmic stablecoin maintains its value consistently by controlling the supply of the coin.
Seigniorage- The seigniorage algorithmic stablecoin is pegged to another coin, and they use the burn and mint feature. This type of algorithmic stablecoin’s value is associated with another coin. One such example of coin pair which used this method is Luna and UST, both belonging to Terra Lab.
Fractional-algorithmic- The fractional-algorithmic stable coin is fractionally backed by a real-life commodity. Frax is one such coin that was partially backed by USD.
How ICO Works
ICO is an essential step for your crypto venture to raise the required funds to kick start your crypto project. There are many ways to raise funds and back your tokens with security or equity to develop trust among the potential investors in your project. Developing an effective ICO can greatly help in your cryptocurrency development process.
Fundraising
Initial Coin Offering is a great way for your promising business to raise the required funds to begin your crypto venture seamlessly. Developing your project with a rock-solid whitepaper and promising future business aspects can pull the right investors to invest in your crypto project.
ICO fundraising option is opted by new age blockchain entrepreneurs who want a hassle-free method to raise funds for their crypto-based business venture than the hectic traditional method to raise funds.
Security Backed ICO
Security-backed tokens offered in the ICO process help your project to be projected as a more reliable project to the investor’s eyes. The tokens issued in the ICO process are generally backed with real-world real estate properties as security.
When the tokens are backed with securities like real estate, it eliminates the probability of fraudulent activities and gives investors the confidence to invest in your crypto project.
Compared to the usual ICO or utility token, here, the investors are sure of the project returns, which helps the investors trust the project and helps maintain the image of the business model.
Equity-Backed ICO
Equity-backed tokens are attractive to the investor’s eyes. Equity-backed tokens represent a share in the company. Owning Equity-backed tokens also enables the investors to later take part in the company’s decision-making process in the future.
Holding onto equity-backed tokens empowers the token holders to receive part of the company profit proportional to the number of shares represented in the number of tokens held by the investor.
Conclusion
The boom of cryptocurrency and its day-by-day popularity growth makes it the perfect opportunity for you to take a dive into the crypto environment. Developing your own cryptocurrency from an industry-leading cryptocurrency development company can definitely have a great impact on your crypto venture.
A Top tier cryptocurrency development company can ensure all the above-mentioned development processes have the best outcome.
