A guide to 123 Swap? What is a (private) token sale?

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What is 123 SWAP?

The 123 exchange platform is a decentralized financial ecosystem that enables the smooth trading of crypto assets between currencies.

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The following platforms offer a variety of multi-chain DeFi solutions on blockchain assets, including:

  • To exchange
  • Ready
  • Loan
  • Staking
  • Yield agriculture
  • NFT strike

What is the token sale?

A token sale, often referred to as an Initial Coin Offering (“ICO”) *, is a limited-time sale of a number of crypto tokens to the general public, usually in exchange for major cryptocurrencies (primarily Bitcoin and Ether ). Token sales are a critical part of the early stages of any new cryptocurrency. As the token market grows, token sales allow developers to expose investors to their projects early on. Additionally, token sales are the most common approach for new businesses to get the money they need to continue developing their product.

What exactly is a private sale?

As the name suggests, a private sale is the sale of coins or tokens to a small group of early stage investors. These sales are often unforeseen and are not disclosed to the general public. Blockchain companies that conduct private sales select which investors to invite to the event. The idea is to get the first notable investors to support the project in exchange for a cryptocurrency that can generate substantial profits.

How to execute the token sale on 123 SWAP

You sell cryptographically produced tokens in this process. They are digital elements that correspond to something in your life: the operations of the business. Tokens can be used to symbolize almost anything, like free t-shirts from a t-shirt store or drinks from a brewery. But in the United States, you can’t use tokens to gift stocks without extensive legal protection. And that’s where most attempts to sell tokens end: The SEC doesn’t want you to encroach on its territory. Other than that, almost everything else is fair game.

We’ll start this article with some basic realities for Americans. These rules are generally not applicable outside of the United States. Many entrepreneurs make their sales out of the country to avoid dealing with the SEC and other parties. I will not discourage or encourage you in any way. Whatever sort of. Whatever sort of. It’s up to you. The legality of these transactions is still uncertain around the world, and there is a narrow line between tokens and penny stocks, which few like to accept.

In addition, token sales are not a way to raise funds. While many companies present them as such, bragging about multi-million dollar fundraisers that erupt in minutes, what they do is float a coin in the open market. These cryptocurrencies can rise in value with a lot of foresight and a lot of luck, and if the token sale is handled appropriately, it gives them a bit more funding than they had when they started. . You get chaos if you don’t plan ahead.

Eyal Hertzog is co-founder of Bancor, a financial technology company. The startup that just received the dubious honor of “raising” $ 153 million in three hours to develop a system that would make bitcoin trading obsolete.

First of all, a little background. Bancor spent over 76 million tokens in this example. The tokens were sent to early investors at a price well below their current value of $ 2, and their value instantly increased. The price has stabilized and owners of existing Bancor tokens can buy and sell these tokens whenever they want, creating a legitimate market for what is effectively a cryptocurrency.

Token holders do not own a piece of Bancor but rather a token used in its product. Consider Bancor, a casino that raises funds by selling tokens to early investors, described in a prominent New York Times article. Casino customers will ultimately use these chips at gaming tables, but until then the chips have a potential value based on the expected popularity of the casino. If enough people are willing to pay $ 5 for a blue chip that used to cost $ 1, you will have a lot of happy investors. Bancor, on the other hand, did something much more intriguing.

According to Hertzog:

We chose to have a token allocation event because we had a potential protocol token in mind – BNT, the Bancor network token, based on our Bancor protocol. It is essential to note that this is neither a for-profit corporate fundraising round nor just an app token. A Swiss non-profit organization organized the fundraiser to develop and promote the Bancor open source protocol. On top of that, we (and others) can build and manage services like the “Bancor Network”, which will offer a simple user interface for creating, using, transferring, acquiring and liquidating “smart tokens”.

Smart tokens rely on the Bancor protocol to maintain their liquidity against any other liquid store of value (Ether, Bitcoin, USD, EUR, etc.) in reserve, linking these new tokens and ETH and other current currencies through BNT . As more smart tokens are issued, the value of BNT will increase, benefiting smart tokens that have them in reserve. It is a natural network ecosystem in which the increase in the number of users benefits everyone.

Creating that dynamic and incentive structure (where early adopters are disproportionately rewarded if the network is successful) would be impossible with any other token (like ETH).

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