Why we didn’t hold an ICO, Sacrifice or Presale

Many crypto projects these days start by raising funds from investors with the promise to use the funds later on for developments. Voodoo token did not hold any ICO, sacrifice, presale, or any other fund raisings. Everything in the ecosystem is funded by VoodooGroup. To learn more about VoodooGroup, please read this article. Some of the benefits of not using investor funds are: no problems with regulation later on, avoiding ‘pump and dump’ risks by speculators, and there will be less fear, uncertainty, and doubt from investors since they can’t have any expectations, as there was no initial pricing. Let’s dive deeper into the benefits, shall we?

What is an ICO?

Sometimes you can participate in ICOs in the early stages of a cryptocurrency project. The founders behind the project try to raise funds for later development. Early investors of an ICO buy tokens at a lower price because they are buying tokens before they are even traded on exchanges. Another way for a project to raise funds is by holding sacrifices, where users send money to receive a certain amount of points, which are later exchangeable for tokens.

We, however, are not fans of this idea at all. We did not hold an ICO, sacrifices, or any other fundraising. What we did was launch the Voodoo Token, MAGIC Reward Token, and POISON Reward Token directly into the open market.

By not raising funds, you gain more trust among investors who are tired of overhyped projects that often lead to enormous price drops once those same early investors are able to sell their tokens on the market. By skipping the fundraising process, we create a project based on fair and natural growth.

All the Benefits of not Raising Funds

Not holding an Initial Coin Offering (ICO), presale, sacrifice, or any other way to raise funds has offered several benefits to Voodoo. Here are the most important ones you need to know:

1. Better Regulatory Clarity

• Avoiding any regulatory issues: ICOs are closely watched by financial regulators, like the SEC in the United States. If a project conducts these token sales, it might be considered a security, which means it has to follow lots of complex rules and regulations. To avoid these complications, we choose not to raise funds. By doing this, Voodoo avoids the legal consequences that come with being classified as a security.

2. More Decentralized

• Less Centralization: When projects hold presales or ICOs, early investors or insiders had the opportunity to accumulate many tokens for a cheap price. When too many investors hold, for example, between 1-2% of the supply, the project becomes more centralized and less decentralized. By not holding fundraisings, the supply will be distributed manually by the team through for example; airdrops, which distributes the supply more equitably and, with that, more fairly.

3. Development above Hype

• Focus on building: Most of the time, when a project not raising funds, it usually means it is more focused on building and expanding their ecosystem rather than marketing or creating hype. This can be be seen as trustworthy among investors.

4. Self-Sustainability

• Long term focus: By not relying on external funding, projects are often forced to find ways to sustain themselves, which can lead to more creative business models.

5. No False Promises

• Avoiding any expectations: ICOs can make a project seem more valuable than it really is, especially if the project promised a lot of things during the ICO while there has been exactly nothing built yet. If the project can’t reach the goals stated in the ICO, it can lead to disappointment and fear among early investors, which can result in them selling their stake, leading to price drops.

6. Better reputation

• Better reputation: Skipping an ICO or presale can show that the project isn’t just trying to make quick money but is committed to their roadmap and long-term goals. This can improve its reputation and credibility.

7. Bigger Focus on the Community

• Community Building: When a project doesn’t rely on fundraising, its community often grows naturally. People want to be a part of the community because they believe in the project’s vision, not because they are speculators looking for quick profits. This usually results in a stronger, more engaged community.

Conclusion

Now you know why Voodoo does not and will never hold any fundraisings. Skipping an ICO, presale, or something similar has many advantages. It helps the ecosystem with regulatory safety, keeps the project more decentralized, more focused on long term goals, and builds trust within the community. It also allows Voodoo to grow naturally and avoid disappointments among early investors.