How to STO Like a Pro
by granny Hudson
This article is written exclusively for https://t.me/KryptoSherlock
Disclaimer: the article is based on personal experience and any resemblance to actual projects is purely coincidental. This is not investment advice and the team of “Crypto Sherlock” strongly recommends to consult professionals and DYOR before investing. You accept the terms by continuing to read the article.
Let’s face it…in the current market, if your project is not on Binance Launchpad, it is next to impossible to meet the hardcap target. Times, where you could find a couple of Asians wearing glasses and get $20mil for 2% of your worthless “utility” tokens, are long gone. Unless we’re talking about this couple, of course:
Another form of token offerings is gradually becoming more and more prevalent: STOs aka Scammy Security Token Offerings are taking over the news step-by-step with a crazy amount of money being raized in a short period of time. Right now, the state of the STO market is reminiscent of the ICO one at the beginning of 2018. Everyone is trying to jump on the hype train but 99% of people in this space are as a good as a monkey with a hand grenade:
In this article, we’re giving you a step-by-step guide on How to STO Like a Pro and get your hardcap to where it needs to be, 50% of which you don’t really need but it’ll be nice to upgrade a house, get a new car, and get out of debt. Without further ado, let’s roll
Idea
Ah, yes, everyone has one, and your idea is obviously the best of them all. The truth is: you’ll have to be dumb to give your hard-earned money in exchange for “promised” dividends to a slick website, smiling faces, and a whitepaper compiled by a freshman. Didn’t you learn anything in 2018?
Based on hundreds of STOs we’ve analyzed, only real businesses with tangible assets make sense in this market. So, start one, get more or less successful, then have an STO to expand it. One of the best STOs we had a chance to follow was one of a hotel where the team did most of the things right: they showed a physical location, gave an address, and all the contacts were listed on the website. It also serves as another point of trust during the STO process.
Legal Aspects
This is the part where most of the projects start showing their shadiness and money hunger. 90% of the ones we’ve touched, refused to give the information on their registration details and the company structure. Luckily, in this day and age, it is very easy to “find out who’s naughty or nice” by a simple online search. Post the details openly to avoid unnecessary questions. Don’t forget about your local SEC, of course. Call them up and submit an application.
Tokenomics
STOs are supposed to encourage long-term holding in exchange for dividends, so the tokenomics isn’t as crucial as in the ICOs. Keep it simple: 1 token = $1, crypto is pegged to FIAT on a daily basis, a small or no pre-sale bonuses, $10k minimum investment. We consider an 80-10-10 split the ideal one for an STO: 80% for sale, 10% to the team (with a minimum 2-year lock and a gradual release), 10% to advisors if needed (more than a year-long lock). Your token should have only one function: holding it. All the tokens should be pre-minted ahead in a publicly viewed and audited smart-contract. All the new investment must be converted into stable coins with a publicly viewed proof. All the unsold tokens should be burned and not “put back in the circulation at a later stage”.
Dividend Structure
This is the sweetest part for us, investors. State it clear on the website: how often, how much, in what form? From our experience, quarterly payouts of a fixed percentage of a profit/revenue in either crypto or FIAT work best. Show your books to the investors and be open about it. Everyone has bad quarters.
Protection and Perks
What will you do if an investor loses access to their private keys? What if a “whale” decides to dump the stock and crash the market? How will you continue payouts if the blockchain dies off? What other perks will the investors get for holding the tokens?
Team and Advisors
List everyone: from the CEO and management to blockchain developers and smart-contract auditors. Everyone must have a Linkedin profile set up, and all the IT staff their skills i.e. active GitHub, articles, publications, portfolios etc.
Partnerships
You don’t need many but all of them should be functional. Please, stop slapping Samsung and Microsoft everywhere: we don’t want to know what OS you use in the office. Better, partner with your industry’s professionals and associations, a smart-contract auditor, a security token issuer, legal team, an exchange for liquidity, and a shiller or two.
Marketing and Community
Here, we see things differently: ditch Telegram chats and its, mostly, toxic quick-money-pump-and-dump-loving community, and open an announcement channel only. Instead, set up a Facebook group/chat, Instagram, Twitter, Medium, YouTube and market all of it within your industry first before moving on to the general public. They will be far more understanding than your average consumer of “Very Highs” from a well-known website. If you do decide to choose the general public route, consider the fact that bounties do not make much sense in the STO market. Why would you give away a part of your business to a random flipper for a tweet or a tattoo on their buttcheek?
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