What to do once youâ€™ve completed your token distribution event
If youâ€™ve successfully launched your token distribution eventâ€Šâ€”â€Šcongratulations! Youâ€™ve cleared one of the biggest hurdles of your blockchain business.
But what happensÂ next?
A clear post-sale strategy is necessary to maintain momentum and ensure that your TDE translates into the success of yourÂ startup.
Ensure SecurityÂ Measures
Even once youâ€™ve completed your TDE, you should be concerned about the security of your funds. Companies that launch successful TDEs have a target on their backs for hackers, since itâ€™s common knowledge that a large amount of capital has been raised. Itâ€™s essential to look into cryptocurrency wallets and hard wallets (see below), as well as making sure that your security measures are in place and procedures are up-to-date. Working with a third-party auditor can help alleviate these concerns.
Another way to alleviate concerns is to make sure that the lines of communication are open with contributors. Make sure they clearly understand how they receive their tokens, and give contributors your official communication channels to avoid phishingÂ scams.
Store Contributions Wisely
One of the first things to consider is how you will store the cryptocurrency contributed during your TDE. Although there are multiple ways to set up a TDE, generally, itâ€™s a good idea to move your supporterâ€™s contributions from an online wallet to a secure hardwareÂ wallet.
What is a hardwareÂ wallet?
A hardware wallet is a physical device designed to keep your cryptocurrency safe. It is usually a small device that plugs into your computer or phone to generate your private keys securely in an offline environment.
It can also act as an extra security layer for your cryptocurrency. An online cryptocurrency wallet uses public and private keys to gain access to tokens, with algorithms managing the keys and enabling you to execute transactions. A hardware wallet gives you an extra layer of security if hackers compromise your data in an attempt to steal yourÂ keys.
According to Dan Podolan, founder of www.livemarketcap, hardware wallets have some key advantages over web wallets. In a web wallet, your private keys are stored on remote servers. In this scenario, you could lose your tokensÂ if:
- Your computer is hacked and you lose theÂ password
- A remote server isÂ hacked
- The company hosting your web wallet goesÂ bankrupt
- The FBI (or other authorities) seize companyÂ servers
- There is a software bug in theÂ wallet
Consider Currency Conversions
This will obviously depend on your development goals and the future projections for your project, but itâ€™s a good idea to consider converting a portion of the cryptocurrency you received during your TDE to fiat currency (USD or the currency of the country your business operatesÂ in).
When it comes to cryptocurrency, volatility is a concernâ€Šâ€”â€Šand while itâ€™s true that your crypto could be worth more at some point in the future, it could also be worth less. Fiat currency will be necessary to pay for some of your business costs, so converting a portion of the ether, bitcoin or other cryptocurrency from TDE contributions into fiat will be crucial to get your business off the ground in the short-term.
Of course, thatâ€™s not to say that you should convert all of the contributions, or that you shouldnâ€™t consider your own long-term strategy. As always, itâ€™s a good idea to speak to your business analyst or legal consultant for advice beforeÂ acting.
Consult Your LegalÂ Team
Beyond communication and security practices, you also need to ensure a robust legal strategy post-TDE. Make sure that you set enough funds aside for appropriate legal counsel to address ongoing concerns from regulatory agencies such as the Securities and Exchange Commission (SEC). Even if you donâ€™t have an in-house legal team, ensure that you are consulting with experts in the blockchain space.
Develop YourÂ Project
Post-TDE, your main focus should be on developing the technology you promised to deliver. Developing your project, communicating with contributors, and continually reviewing security will be key to running a successful business and ensuring longevity well beyond your tokenÂ launch.
Contact firstname.lastname@example.org to find out more and sign-up for a free trial of Rocket by Etherparty, the user-friendly platform that lets you set up, launch, and track your token crowdsale without a development team.
My Business is Funded by Cryptocurrency. What Next? was originally published in Etherparty on Medium, where people are continuing the conversation by highlighting and responding to this story.