Smart
contracts are computer codes generated to efficiently imitate the
real-world legal deals and these codes are deemed automatons of trust
to ensure smooth business transactions, without deviation of even a
single bit from the code clause that comprise them.
A
large number of people seek a reliable ICO
development company to launch their ICO
program for fund-raising. Although it allows a project with credible
potential to raise the required amount, the downside is that it
increases the risks as the investors are not sure of the money that
they invest into the business. It is like an investment in blind
fate.
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| ICO development company |
Smart
contracts, however, give ICO investors the courage required to
support a specific project. These computer codes work as an
intermediary between the investors and the developers. The funds are
transferred to a specific address, where they are stored and
monitored until the completion of project development. These
contracts issue tokens, such as a document or a certificate or an
expression of good fate, by the developer to an investor with a hope
that as project development proceeds and the project becomes
successful the tokens can be exchanged back to the currency that has
been donated.
The
very first network to execute this aspect of blockchain was Ethereum
and today smart contracts are used in almost every credible ICO. It
helps businesses to rest assured that an ICO
development company or a blockchain
development company delivers on the set promises.
Here
are a few reasons why smart contracts are needed for an ICO.
Credibility
An
ICO project that is ready to launch but does not have smart contracts
in place is more likely to struggle to gain people’s confidence.
Considering
that human factors have failed quite often, it has become hard for
people to trust a system that is decentralized without any regulation
and has not received considerable mainstream adoption. This is when
smart contracts help projects to build credibility and earn trust of
investors.
Sustainability
One
of the common challenges that most startups face after their launch
is failing to stay in the crypto race. While many projects are able
to scale through their crowd sales and even achieve their hard cap,
there are many others that are unable to meet their objectives.
Smart
contracts help stabilize the relationships between developers and
investors by building long-term agreements for reevaluation of trust
models.
Transparency
Transparency
is important in any business relationship and that is exactly what
smart contracts can help businesses to achieve in their ICO project.
Efficiency
At
the time of token sale, many individuals could be involved in the
contribution process. This could be a problem if the tokens are
transferred to people manually or individually, one after the other.
This could make the process complicated. However, a program for the
disbursement of funds, when they are due, can simplify the process.
To
sum up, smart contracts have become favorable for the ICO success,
and in case a project fails then smart contracts can be further
programmed to refund the money to investors. It is advisable for
investors to check if the ICO has smart contracts attached to their
token creation event, prior to investing.
If
you are looking to build smart contracts for your ICO project,
partner with a trusted ICO development company that has in-depth knowledge
about the blockchain world, along with the experience of working on
this technology. Smart contracts will help you to represent yourself
as a genuine ICO, which will in turn aid in building trust among your
potential investors. So when the success of your ICO project depends
on the developers, make sure to choose the best.
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