What is an ICO White Paper?
Like a white paper in business, an ICO white paper is a detailed guide for a new blockchain project which informs potential token holders about the business and its idea in view of an upcoming token sale.
The white paper is embedded on your ICO landing page and is a core selling point for potential investors.
What Should an ICO White Paper Look Like?
ICO white paper structure is totally dependant on the type of project and has no ideal “how to write an ICO white paper” format. The ICO white paper does however have a few general guidelines which will be outlined below:
- Disclaimer: This generally quickly covers the purpose of the white paper and its legalities.
- Introduction: The introduction will contain information about the problem that inspired the project and what they aim to improve in the future. This should be addressed in a way that provides a solution to customer pain points.
- Industry Overview: Current markets, competitors, financial stats and future trends.
- Risk Factors: This will contain all legal, internal, industry relevant risks that could possibly affect the success of the ICO and potential future of the business.
- Solution: The mechanics of the project will be outlined here, along with a full project description. Pitch your solution with an aim to convert potential investors.
- Token Distribution: The sale, the distribution schedule, unpurchased tokens allocation, fees and costs.
- Team Members: Is there a technical team or blockchain engineer onboard? If not this will be a costly hire
- Token proceeds utilization: How the tokens will be used to promote and develop the project as outline by the road map
Benefits of Having an ICO White Paper
First it is important to note that when hosting an ICO it is 100% necessary to have a white paper.
- Increases investment, credibility and trust
- Well written white papers that get shared will help to generate market buzz.
- Potential investors react positively to white papers that provide problem solving information
How to Keep ICO White Paper Readers Engaged
Following the general guidelines of the ICO white paper outline, these tips will help to keep readers engaged
- Graphics like charts, tables or photos will make the white paper more appealing and increase credibility.
- Maintain a clear layout and design, with an easy to read font. Use bullet points to divide content
- Use vocabulary that is easy to understand, while avoiding a sales format.
- To avoid sales format, use more benefits to the customer than features.
- Use external links to further back points. (Make sure to reference).
ICO white papers are becoming more visually pleasing and user friendly than technical traditional white papers.
What to Look for in an ICO
There are a few things that potential investors should be looking out for when reading ICO white papers, but the most important is value.
- Product/Service: What is being made or serviced and does it exist already?
- Values: What can the token be used for post ICO? Does it/will it hold value? Why is this token different to any other
- Solution: Does the solution being provided solve the problem?
- Tokens: How will tokens be distributed during ICO and utilized post ICO?
- Scams: Is there any security in place to prevent unlawful token reproduction?
- Reviews: Have any users reviewed the product so far?
- Team Members: Is there a technical team of experts or blockchain engineers onboard?
How to Promote an ICO White Paper
To help contribute to a successful ICO, you will need to understand how to create a marketing strategy for an ICO. The overall marketing strategy will not only promote your white paper but your whole ICO.
A few of the main marketing tips for ICO are:
- Social media engagement: Yes you can use paid advertising on Facebook or Linkedin advertising, but replying to community questions on a website like Reddit are much more beneficial.
- Bounties: Use the community via bounties to help promote your ICO. Make sure to follow a guide to ICO bounties when doing so.
- Blogging: Similarly to engaging on Reddit, writing blogs and having them featured on relevant cryptocurrency sites with high amounts of traffic is going to be extremely beneficial.
- Listing sites: Register on an ICO listing site like CoinRating and opt for premium rating features. These can then be linked back to your ICO website to increase trust and credibility. The best ICO listing sites compile all live ICO campaigns and provide information like current ICO status and token type/price.
How to Identify ICO White Paper Frauds
ICO’s are not 100% safe all of the time and one should invest a lot of time into researching prior to making any sort of investment. These tips are just a few that you should be weary of when reading ICO white papers.
- No Blockchain Required: Ask yourself the question. Does this business require it to be decentralized or need a blockchain to function?
- Token Distribution/Utilization: Does the token distribution allotment work to the advantage of the development team? Does the token utilization structure make complete sense?
- Team Members: If the team has little technical expertise and are trying to keep themselves relatively unknown, this should raise a red flag.
- Lack Of Info: One should be careful if the white paper or company website has little information as they could be a scam or in very early development stages