Nov 2022#MarketResearch#IDO

How do you build a successful token sale strategy based on investors' behavior?

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Authors

Marat Gizatullin

Marat Gizatullin

Analyst, R&D

Ksenia Alikova

Ksenia Alikova

Analyst, R&D

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6 min

We surveyed token sale participants, which involved 819 users from 28 countries. We drew two basic portraits of token sale participants through the general surveys and individual interviews: an experienced investor and a newcomer.

This article summarizes a full token sale market report for Q3-4 2022. You can find it here

This article will answer the following questions:

  • Who is participating in token sales today?
  • Which regions have the largest number of investors?
  • Where do investors look for promising projects?
  • How do experienced investors choose a project to invest in?
  • What token sale format should I choose?

Who should read this article?

  • CEOs and Founders. Study the portrait of your investors and use this article as a checklist to make your project as attractive to them as possible.
  • Marketers, analysts, and managers. This article will help you position your project correctly or reach a new GEO.
  • Investors. Study the experience of other token sale participants to improve your investment strategies.

Who participates in token sales?

We found that among the 320 million crypto audience, 61% have experience participating in token sales. Broken down, that's roughly 195.2 million investors (small and large) as of 2022.

Most of those interested in investing in crypto are men between the ages of 25 and 44. Among them, 87% have a constant source of income, so for them investing in token sales is just an opportunity for additional income.

Note: Given investors' demographic and social characteristics, try to avoid bribing them with grandiose plans or futuristic project concepts. Focus on a more utilitarian project design.

Which GEOs should you focus on to attract investment?

According to our report, 40.3% of investors are located in Asia, mostly in the Southeast (16.3%) and South (12%). The remaining 12% are primarily located in East Asia. 
The second significant GEO is North America, where 20.5% of investors are located.

What is the best format to run a token sale?

We found out what format of the token sale is preferred by newcomers and experienced investors. Here are the numbers:

Here's how investors feel about each of these formats:

As we can see, ICOs receive a lot of negative feedback. This is because many scam projects were created during the ICO hype period in 2016-2018. After the market collapse in 2018, ICO began to be associated with scams. 

Cons of ICOs and IDOs for investors:

  • Overhype. 
  • Too many scams.
  • Low entry threshold.
  • Exposed to market manipulation (pump).

Pros that drive investors to participate in ICOs and IDOs:

  • Good profits. The right project can generate decent profits.
  • Easy to use. 
  • Wide variety of projects.

Notably, IEO has the highest loyalty percentage among investors but is less popular than ICOs and IDOs.

Thus, the best format for token sale in terms of popularity/investor loyalty ratio is IDO.

How much they invest: the structure of the average size of investments in the project among experienced and newcomers.

The average "check" will be $450, both from experienced and novice investors. Given the volatility of the crypto market, investors are taking an increasingly careful approach to diversify their crypto portfolio assets. 

How do investors monitor the market??

Investors are constantly monitoring market changes. 69% of experienced investors get information from Digital Media, while newcomers almost entirely bypass these resources with only 9% of the attention.

Which social networks are investors most active in?

The most active (4-5 days a week) investors visit Youtube, Twitter, Telegram, and Instagram, as well as Facebook and Whatsapp. The behavior of beginners and experienced investors on this indicator is also the same, but experienced investors are most active on YouTube and Telegram. 

How do investors look for projects?

Statistics show that the more experienced an investor is, the less exposed he is to advertising and hype.

Professional investors read reviews from influencers and detailed analyses from experts in private groups with good reputations.

Launchpads and rating aggregators are the most popular tools among experienced investors to find new projects.

Tip: To attract experienced investors, you need to focus on the depth of the advertising campaign (detailed reviews from reputable sites and influencers).

Detailed project analytics: what is important for an investor?

After an investor has learned about a project and read reviews and analytics from experts, he moves on to analyzing project documents.

Among the analyzed project documents, there are five main ones (Doc name and percentage of attention from investors):

  • White paper - 62% 
  • RoadMap - 58% 
  • Tokenomics - 54%
  • Team information - 53%
  • Light Paper - 24% 

The White paper is the most readable document for both newcomers and experienced investors. This document is comprehensive and includes information from other aspects as well. 

The RoadMap is the most popular document in the analysis among experienced investors (65% of professional investors pay attention to it). It should contain specific goals and timeframes for achieving them. 

Tokenomics. Investors will pay attention to the total issue of tokens, their distribution, and price dynamics at various sale stages. 

The Project team is the face of the project. The anonymity of project team members scares off investors. Team information is important to 64% of all experienced investors. Team background should be transparent and relevant to the project field.

Conclusion: beginners prefer superficial analysis of documentation. For them, it is more of an introductory nature. Experienced investors carefully analyze the tokenomics, roadmap, and team.

Launchpads or exchanges? Comparison of the two most popular tokenization platforms.

The choice of a platform for a token sale is not a statistically significant indicator. As a rule, the choice primarily depends on where the token sale of the investor's chosen project will take place. The statistics show that launchpads are only 16% less popular than exchanges. 

This is because major exchanges have a well-established reputation over many years and enjoy investors' trust. In addition, projects are more likely to seek to conduct the token sale on a major exchange such as Binance, which in itself is good publicity for the project.

Problems

First, even for experienced investors, the functionality and usability of the UX design play an important role. Newcomers and experienced investors speak negatively about the user interface of both platforms. 

The second (but no less significant) problem is the abundance of scam projects (especially on launchpads).

Note: experienced investors choose a platform based on its reputation: the more quality projects and fewer scams posted, the better the site's reputation.

Conclusion

Thanks to our research, we were able to distinguish the main criteria of investor behavior on token sales. Our full report contains detailed statistics to help build a token sale strategy. You can check & download it here.

 

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