In our previous article “Market review of ICO pools” we went into the details of primary trends of ICO pool market evolution, backgrounds to the advent of pools, classifications, current results of work, risk free pools requirement criteria and also our vision of the market future. In this article we will touch on the topic which, in our opinion, is a key to the market transformation of pools and its development as an integral part of realization ICO in general. This refers to ICO benefits of close work with pools and which are the current obstacles.
Benefits for the pools and investors who are involved in these pools are obvious. For pools they include fees and additional advantages from ICO and for investors there are bonuses and also the opportunity to get into close private rounds gaining therewith prized Xs. Of course, everyone knows that cost of security tokens can change dramatically from private sale through the presale to crowdsale. So, investors may ask, “What is the matter then?” In fact, everybody is contented and happy. They can upscale investments and enjoy the life. It’s not all that simple. The main obstacles are ICO themselves.
Perhaps ICO would like to work with pools but they are severely restricted due to the following reasons:
- All investors must be put through a sieve KYC (know your customer)
Complimented by common establishment of cryptocurrency market regulation ICO are compelled to scrutinize their investors to avoid of authorities harassment. But with KYC, pools deal not as good as they are supposed to be. Only 3% of pools maintain KYC procedure according to ICOPools.io estimates. Therefore at this point major ICOs avoid of pools in every way possible for fear of consequences. As the result, pools take part in rounds nevertheless, but they do it illegally shaking by that the confidence of ICO yet more.
- Grey market is full of scammers
Precisely this idea occurs to ICO. We will work with them and they will take money from the investors and go forth into the night with all the finances. When we came into the market as a pool rating service, we thought about looked the same way. However, it wasn’t so bad. Indeed, there are some doubtful pools but their activity is minimal while the major and qualitative pools value their reputation. They have carried out lots of rounds and divided the accordant tokens with investors. In other words, a high percentage of scam pools is rather phobic reaction than reality. It is prompted by grey market motives and, as a result, its murky and lightly regulated processes.
So, is it like the destiny of pools is to take a nibble of a pie and eat it on the quiet under the table? Quite the contrary! We believe pools have brilliant future. Furthermore, it is a pool that will become the major driving force of crowdfunding for ICO. The solution is white legal pools!
What is white ICO pools?
White ICO pools have four main characteristics:
- They are registered as a legal entity;
- They have a website with an access to investor’s personal online area and description of deals.
- They maintain KYC procedure for their investors.
- They are legally entitled to raise finances from investors.
We won’t particularize and give detailed explanations of each item. We will dedicate the next article to this. We will dedicate one of the following articles to this. The main thing is that the correspondence to this demands is possible and it doesn’t cost a huge amount of money. The most difficult steps can be accomplished by partners. On the other hand, by becoming white, the pool gets to crypto currency heavens, where big ICO exists, the collections in the ether starts with 5-digits sums, regulations treat favourably, and mass media provides active and usually free PR.
Why is it profitable for ICO to work with pools?
Here we are developing an article’s theme. So why is it profitable for ICO to work with pools? We have already understood that the main demand is pool’s legality. Now let us highlight some primary benefits:
There is not any trouble with KYC realization and investors checking.
KYC realization is another cup of tea for ICO. It is rather a laborious procedure, which demands resources and is time-consuming. However, as we mentioned earlier, it is necessary for big ICO. Actually all ICO need it to follow the procedure, but some of them are expecting a lucky break.
White ICO pools are undertaking this procedure. They realize KYC for their investors. Usually it happens when entering the pool or while making a deal. Respectively it is also convenient for an investor, as he goes through this procedure only once. Of course, different ICO might have some additional demands, but they are insignificant.
ICO is saving its resources and can concentrate on business tasks. Win-Win. Everyone benefits.
There is no trouble while distributing tokens to investors.
There is a similar situation with token distribution. ICO sends block of tokens to pool address, and then it is shared to their investors. Of course, trust aspect is very important here. Although, this is the idea of white pools, they are transparent and have some obligations. Additionally there are some outer services like ICOPools.io, which accomplish the whole process monitoring and they are in fact one of the industry supervising body.
Making collections in condition of crypto currency and ICO advertising ban in the popular media.
As it is well known, recently basic social networks (Facebook, Google, Twitter and many others set some restrictions for crypto currency and ICO advertisement. So it became more difficult to promote any projects. Pools help to solve this problem, as they are investors communities. ICO doesn’t have to make a difficult marketing strategy. It is important to make an agreement with a few big white pools and the task of raising funds will be mainly solved. And considering large raisings through the pools, media will pick up the news, solving capture problem completely.
It is necessary to note that this clause concerns presale and sale stages, as the layout private usually doesn’t need any advertising and is held in advance using some particular channels.
Working with a few big investors instead of plenty of small.
By working with pools, ICO excludes the necessity to deal with a big number of small investors. All this charges are taken by ICO pool. This is its job and it gets a commission and other benefits from ICO. Moreover, the presale stage, which is the key one for pools, becomes a crowdsale, as the receivers are small investors. The issue is only emitted token blocks sizes.
There might be a few rounds. This is how does ICO manage to gain more and more crypto money.
Demand analyzing before crowdsale maintaining
This is a phenomenal item which leads to one of the key advantage of crowdfunding. Pools solve a bunch of tasks simultaneously in the limits of any collections for ICO round. Usually there is a pledge form filling in before collections, which identify the level of potential demand. It means that it becomes clear even before collection start which sums should be considered.
Moreover, leading pre-sale through a pool, ICO sees the demand level and realizes which results are going to be there in crowdsales. So, quality pools are really multifaceted and give the ICO an incredible advantage.
It is way more profitable to use the trend than to fight it.
The last but not the least is trend using. Pools surge, even the grey one’s, wasn’t an accident. Enterprising people just saw the opportunity and used it. You can find out why did it happen from our article “ICO pools market review”. In the conditions when their actions were disapproved by ICO they keep doing conspiration magic.
It is possible to fight it but it actually doesn’t make sense as pool can always collect all the money in one pocket, then transfer it through the stock and only after that send it to ICO. This is the way to hide a pool. Grey schemes will exist, but they cannot upgrade to the new level.
The new level will provide two conditions:
Transferring pools to legal sphere
Being ready to work with white pools in big ICOs
For ICO it is way more beneficial to make some noise around this issue then just bury it down or just avoid it.
Rating pools service ICOPools.io attempts to help the trend to develop and speed quality white pools appearing. We have already made an essential contribution with the help of pools monitoring functions. Big quality pools with a good collection history realized the necessity to getting to the new legal sphere and perspectives which will become available. Currently their legalization are taking place. We are waiting for new announcements and beginning of a great work.
For our own part we will highlight white pools in the rating, as we think, that they are more trustworthy for investors. The last thing to do is to persuade ICO to extract extra slots for pools and after this the revolution, which is equally beneficial and simply necessary for all market participants, will begin.
The material was developed by ICOPOOLS.io analytics service department – the first ICO pools rating, which is meeting the interests of crypto investors. You may disscuss any questions regarding pools in our chat (https://t.me/icopoolsen).