Pre-Sale Definition
A pre-sale in the context of cryptocurrencies and blockchain technology refers to an event that blockchain startups organize to raise capital for their projects. The startup sells a part of its cryptocurrency tokens to early investors or adopters, often before a public sale (ICO – Initial Coin Offering) at a discounted rate. The capital thus raised is typically used for development, marketing, and other operational expenses for the project.
Pre-Sale Key Points
- Pre-sale is a fundraising event by blockchain startups where a portion of project’s tokens are sold to early investors.
- This event usually occurs before a public sale or ICO.
- Pre-sale tokens are often offered at a discounted rate to incentivize early investment.
- The funds raised from a pre-sale are used for the development, marketing, and other costs related to the project.
What is a Pre-Sale?
A Pre-Sale is the phase of a crypto token sale where the project’s tokens are offered to a selected group of people before they are made available to the public. It is similar to a private equity placement within traditional markets and is typically carried out before the public ICO.
Why is a Pre-Sale Important?
Pre-sales are important because they provide crypto projects with the essential capital to fund the development, as well as marketing and operational costs. They also offer investors an opportunity to buy into a project early at a usually discounted price, potentially leading to significant returns if the project is successful.
Who Can Participate in a Pre-Sale?
The eligibility to participate in a pre-sale varies and can be limited to selected investors, such as venture capitalists, private equity funds, and other institutional investors. Some pre-sales might also include retail investors who have shown early interest in the project.
When Can a Pre-Sale Occur?
A pre-sale usually occurs during the formulation and development stages of a blockchain project, often before an ICO. The specific timing is decided by the project team.
Where Can You Find Information About a Pre-Sale?
Information about a pre-sale can be found on the project’s website, social media channels, or on cryptocurrency exchanges that are participating in the pre-sale. It’s crucial that potential investors do their own research (DYOR) before deciding to invest.
How Does a Pre-Sale Work?
In a pre-sale, the token issuers set a certain amount of tokens to be sold at a specific price before the public sale or ICO. These tokens are often sold on a first-come, first-served basis. Once the pre-sale is concluded, the tokens are usually distributed to the investors’ wallet addresses, or are held by the exchange from where they were bought. In some cases, they might be time-locked and gradually released over a specified period.
