Topic: Why ICOs impose a minimum amount on investors? (Read 576 times)

They also need the minimum and maximum amount of they need so ico project can under go what they need to do om their roadmap but lot of ico project don't reach it so the project getting scammed sometimes.

It could be a range set to define the caliber of investors they wish to attract and also it could be a sign of urgency to enable them meet up with ico sales deadlines. It's better to collect ten 1000usd investments than collect hundred 20 usd investments

Projects that allow investment of any amount, tend to get more retail investors, but those who impose a particular amount is more or less like setting some restrictions and that will limit the amount that will be raised from them. Rather most of the sales will be made through private investors, which is what has been happening to projects these days.

This is quite true, they might probably not see it this way because of most developers selfish ambition, their goal is to quickly sell of their token irrespective of the number of investors, instead of placing a minimum order, what they should have worked with is maximum amount an investor can put into the systems at once, this will give opportunity to many other investors and at the same time disable the ability of one single entity to hold a very large portion of the coin that will result to dumping when he/she decided to sell the coin, if they limit it, there will be balance between holding and dumping.

Quite through, and aside bringing quality investors, it will also make the cap to be raised quickly within a short time frame. Most of these projects that has minimum an investor can bring in actually end up getting rich investors who will not give me any stress along the line, and the stress I am talking about is the one for dumping.

Even if 1 or 2 investors dumb their own coin, it will have no effect much on the market value and at the same time, there won’t be any pressure on them whereby they will take their time to full grow the project till their coin stabilizes.

True but i'm sure the project owner prefer sold out their token sales only from private sale or pre-sales. Easy money and it's more guarentee that the investor invest their project. I'm agree though, it's better to distributed among more people, not only 1-5 people, because i'm afraid they can control the token price.

I think its because of the processing fee. Buying with just 1$ will be difficult for developers to process the transaction easily.  And another reason is because its easier to sell of easily to  whales that buy plenty than to small investors

For a blockchain startup, the main thing is to collect the necessary amount for the ICO, and how many investors will buy coins is not so important. But at the same time to protect the project, one investor is set limits on the number of coins that he can buy.

It seems to me that everyone wants to play it safe because it sets some conditions. Who is the minimum amount, who is the minimum number of tokens.

In this version, there are many pros and cons, but it seems to me that there are more cons, as the load on the crypto currency(ETH) will increase, scammers will begin to deceive dozens of times more people, a drop in confidence, an even more negative attitude to the currency and so on

I am agree that ICOs should not put minimum investment and let retail investor come to the project. Its more fair and more holder is good for long term. If whales hold most token, price manipulation could happen and i think its make the project like speculation for short term

Everyone wants the best way to invest so they don't lose each other, in trade we don't know whether the vulnerability due to ICO is very high and hackers are rampant. I hope the developers prioritize fair cooperation with investors because we both work and seek profits. Financial management must be able to anticipate that prices of tokens are stable and high from the money of participating investors.

If there's no limit then there's always be a huge uncertainty about the success of the token. We never want that one guy controls more than 50%-80% of the supply because that's how rich people maintain their status. It should be fairly distributed because we never know if that guy is really a believer of the project and them dumps it in the midst of the success of the project then it would be a total chaos.

When investing in ICO was hard, then there were big profits. And now even a schoolboy can buy and then sell in fear. Therefore, the price flies down.

Easily to get the softcap so they implemented a minimum amount of investment as we seen the icos now are not reaching the softcap even it has a lot of investors.so they do a technique to reach the softcap.

I believe minimum amount to be purchased is good
It ensures that true believers or investors are serious contenders

We cannot allow 5$ or 10$ purchases in an ico, it would unnecessary cause a traffic that’s not needed

one of them might be, then the price of ico tokens which continued to decline could not even reach the ico price which made investors also reduced. other factors may be the price of altcoin on the market that is being cheap, it makes investors better to buy altcoins on the market than investing ico.

Maybe because now there are a lot of scammers in the field of ICO. Because already and begin to set the conditions to confirm that they are not rogue.

Yeah, almost every ICO will need a minimum amount to be purchased by the investors.
I personally will not matter about this, for, commonly, their minimal amount is not at the high numbers. They are still reachable.
Each developer or team needs that minimum amount because they have the system. It relates to how they will distribute the token to their investors and how their system readiness.
Imagine if there are so many investors in a project but the amount is very small that will make the team feel inconvenience on their working system, and also smart contract deliver.

The minimum amount is required to restrict people without having money. I mean every person that is in this industry can afford the minimum investment barrier of any ICO. Private sales are for big investors and they are getting more attractive prices.

I think that the more serious and promising the project, it sets a high bar for the minimum investment. Such projects require interested investors who are willing to help develop the project, and not those that invest only for the purpose of enrichment.
And for ordinary projects, the minimum amount is set at a low level in order to raise money due to the maximum number of investors who can afford to invest, for example, $ 100.

It does happen but we are here talking about when the minimum investment investment is indeed done by the ico which might be able to make manipulations regarding the financing

You have a point there, but the major reason in my opinion concerning why ICOs set a minimum amount users can buy is mostly because they have put a price tag to the value of their project. They feel their project aint worth $10 investment and feel its an insult for people or participants of the ICO to buy $10 worth of their tokens.

As for me, the minimum amount for ISO eliminates pseudo investors. Because serious people will not play with one token. It seems to me that it is more clever.

The whales investors in the private sales and pre-sales are having more limit to invest on the project, because they have lock period usually.
But in ICO, almost there is no lock period, therefore ICO limiting the amount of personal cap in main sale.
Otherwise, the main sale investors can manipulate the price of the token/coin.

You know majority of these ICO has target and they also have timing associated to these projects, if they are to go by the rule of number of investors and not amount of investment, majority of them will end up not meeting their softcap, talk less of stepping on the hardcap lather.

To really gain attention of people and convince them to partake in a project is quite very challenging especially in a market full of competitions, the only way it can work is when there is a general law in place that places a maximum amount an investor can put per project and to be abided by every other ICOs out there, otherwise, any ICO that practices these will end up failing.

Investors who invest their money in projects should keep these coins and not sell immediately after listing. This suggests that they do not believe in the project and then they are not investors but speculators

In my opinion, imposing a minimum amount will make the investment more tangible. I'm certain that if there was no minimum amount, some people will purchase only 1 token. It will also reduce the work load of the team, because there will be no insignificant purchase. In sending tokens, gas fee is required and the team will save the cost of transferring insignificant number of tokens.

Its most important for investor could sell their asset after listing on exchange market, why have minimum for investing on ICO project, without have limited for minimum maybe many investor could not sell their coin on exchange market.

I'm of the same opinion as you. The more people take part in the sale, the more chances the project has to become popular among investors and traders.

It is just their decision to easy count the investors and avoid also a very low capping and fund that they will going to get. I think it is a good decision in order to collect much better fund rather than to let investors spend too low.

the aim of the minimum amount is to keep investors serious in buying. because if we have spent a lot of money then we will definitely be better and more serious in trying to give good input. if the ICO does not provide a minimum limit, what happens is that investors will enter and leave themselves without being able to make meaningful contributions.

indeed, it is better for everyone to participate even though they may invest little but it will be much better if compared to investors who invest heavily because they can play the price as they wish.

I agree that it is good for a project when there are many investors and strong community, but still I would not go to 1 $
100$ would be fine for me as a minimum. 1$ investor is not a serious one and there would be many useless transactions.

I think the main goal of developers is to raise a large amount of money for work and not to allow everyone to buy their tokens at a low price.

I don't see any reason of allowing investors buy any amount of coin they want because people can be really funny and might end up buying an amount of coin that is very insignificant and the team might not be able to achieve their target because people will feel that they should try testing the platform with the investment of small amount that they can afford to lose, this is why they put a minimum investment amount so that it would be easier for the to achieve the set goal to be raised, though it would be good if there are no minimum amount.

As far as i know, every ico buyer has some expenses for ico holders. Kyc and everything need money. And if the buyer will just buy 10$, that 10$ may not be enough just pay the expenses.

ICO should be for all, I do not also see the reason why projects should impose a minimum amount on investors. Some investors do not even participate in ICOs these days, the beginners are greatly discouraged with this.

A strange question, I generally agree that they should not do this, but I think that this is done so that small investors whose investments today do not matter could not invest. Although I do not understand why it is needed.

I think the bigger the investment, the better it will be to have so many investors and investors with little money. Investors who invest a lot of money will have a lot of responsibility for their investment.
When they invest a lot, they will think about holding long-term and long-term engagement with the project, etc ...

Because if the price is higher, investors will bypass such projects and will look for other projects. It is not profitable to lose your investors

It should be borne in mind that at the same time there is a limit on the maximum payment in order to protect the coin network from whales. And the minimum level is set in order to attract serious investors who are interested in the real promotion of the project. The project is not interested in students who will buy coins to sell them immediately after the ICO.

Minimum sales must be achieved because it becomes a valuable capital to run the ICO project. There may be projects that maximize sales because they already have the funds to develop the project. However, this has become the policy of the Development Team. We as investors must certainly be more careful in investing.

because anything that has been planned by the team in an ICO project has been carefully thought out by the team so that the maximum and minimum targets must be targeted so that in the future the project can run according to expectations and the funds obtained are not misused by the team.

yes the project must also need a minimum investment so that their project can run smoothly.
but with the current situation like many left behind

The minimum investment amount is required in all ICOs. I believe that the minimum amount to eliminate small investors is because they are not ready for the requirements and risks that ICOs may have. I also know that the minimum amount is to attract larger investors.

Not well regulated ICOs impose this kind of thing on their project cause if they are they will welcome any amount from the investors and would really fasten to reach their minimum capitalization for the project. I checked Poseidon and Etainpower ICO and is a good project caring for the environment, how about that bitrus?

I think the reason is because the costs required to send a token to an investor's wallet are large, so if investors only invest $ 1 then the project will experience a lot of losses and another reason is that their sales target is quickly achieved.
so no one wants to limit a maximum amount because everyone wants their tokens to sell quickly

Maybe it could help regarding manipulation, but when projects send millions tokens to wallets, it will not worth the effort. Besides, you are going to pay $1, plus $1 fee?

Considering this, that is why I am not surprised that so many ICOs are not making much sales as used to be, because then, so many ICOs were considerate and wanted everyone who was interested to partake in them. That was part of the agenda of the inventor of cryptocurrency itself, which I feel should not be bridged.

You've made an interesting point. I think it would really be more reasonable. Perhaps the problem with the manipulation of coins by large investors would be solved.

I do quite agree with you on the maximum investment being better than minimum as this will to some extent ensure a relatively fair distribution of the coins/tokens. This will somehow water down the effect of dumping by a few. Maximum gives more people the opportunity to own shares in a project.

I think many ICOs don't want to deal with 1 bucks investors because they are usually not very clever and adequate. And also bigger number of participants makes KYC process more complicated.

Most of the ico has its minimum and maximum investment cap for getting a proper distribution. For example, in the last IEO, celer network max cap was $3k possibly and minimum cap was $20. So, I think it's a good way to being decentralised the coin distribution.

I don't understand the minimum amount thing too. I guess it is expensive to receive small investment from investors, if not, the whole thing doesn't make much sense. The set minimum  would not adequately decentralize the  coins if they are  concentrating them in few hands
I hope the idea behind it isn't to sideline regular/poor investors.

It depends on a project itself. If it is a very famous project that is about to launch its token sale, it is a great decision to make a personal cap, to allow more people to buy their coins and to avoid the creation of big whales.

A lot of discussions, but a significant reason for the minimum threshold is KYC verification, they cost anywhere from 2-20usd (yes i've seen 20usd KYC verification, especially if you go with a very small shitty service) per verification, depending on the source and how much automation is included.

Along with that, there are also costs for conducting TXs and a wide variety of overhead costs that rarely get disclosed. Also, the thought of 1000-10k people donating <$1 is a total nightmare for distribution and again, many of the costs associated with hosting the ICO itself.

These costs sometimes are just allocated directly from the pre-investments, sometimes they come directly out of the invested amounts. A lot of what you guys stated also plays factors as well.

One of the many things that's rarely spoken about (if ever) is ICO's disclosing allocation costs for running operations and how much working capital they have from the beginning. I'm not talking about the typical pie-chart, i'm talking real in-depth financials with forecasts, predictions and current running costs. Most competent ICO teams do have this information, and only disclose it to investors investing major sums of money into the project, but, again, rarely is public knowledge. This is a standard practice for real-world businesses and startups, but virtually unheard of in crypto. It's really up to the investor and crypto community to push for more transparency into these types of things and demand more from ICO/STO/IEO or w/e teams.

Yes I also had time to think about this. giving maximum value will be more helpful, but I think the Team will be better if it decides to give more data about investors who for example want to invest above that maximum value

The trend went into overdrive in 2018, when the price of Bitcoin  hit a peak of nearly $20,000 and Ethereum notched $1,200. ICO funding hit $6.3 billion in only the first three months of the year, as noted by Coindesk, but, fast forward six months and a new trend has emerged. Public ICOs, which allow anyone to invest, are increasingly replaced by a new approach of limited, private sales that consist only of accredited investors and close connections. Many ICOs today include no public sale component, with retail investors forced to wait until a token is listed on an exchange. This situation drove the impose the maximum number of investors allowed in participating in ICOs, that's why they impose soft cap capitalization, to compensate for the minimum number of investors on every ICOs, the most current on this trend are Poseidon, EtainPower and Bitrus.

Even though it was not like that, just because last year there were a lot of ico who experienced a scam that made investors reluctant to make investments in ico or buy coins at ico, and when investor confidence was running low, ico would have difficulty reaching softcaps, both small and large.

I think the minimum buy order is just too get serious minded investors
That will indicate their interest in the growth of the project

You can expect 10$ to be the minimum buy
Ico is not an exchange trade

Most restriction on minimum purchase is during pre sale and private sale, in ICO i dont think we have a substantial restriction, but again it varies from project to project.

As i see some icos right now are not getting the softcap or didn't reach it, so they implemented the minimum investment to reach the softcap, nowadays on cryptocurrency the softcap is very difficult to reach as investors lack an interest to buy on icos and they are focusing on trading.

There may be problems processing payments for very small fees.

The company wants to conform to a specific model, where their power and attractiveness for investors will be taken into account.

I think the reason why there is a minimum nominal value is that they want to get a “soft cap” as early as possible, and not a group of investors, which then affect the price of tokens.

I think that setting the minimum amount during fundraising is done in order to quickly collect the necessary amount and weed out weak investors.
Who will immediately after completing ICO begin to discard tokens.

Recently, a problem has arisen with ethereum, namely, with its scalability and increased commission fees in connection with this, and it turned out that the small amount of remittances that were used in some activity, games or somewhere else was to blame. I remember. That is, if we now allow small transactions when investing in ICO projects, this again can derail the ethereum price. Therefore it is better not to do this. In any case, until ethereum solves the problem of its scalability.

I strongly agree, if the system is like that, there is no monopoly from any party, everyone also gets the same amount of tokens. that's very interesting. but sometimes companies don't appreciate the process, and they don't care whales monopolize themselves and the crowd.

What in my mind about that condition is, that could be one of the strategy for the the project to get their selling target.
So the project could continue their development when they had enough fund to do it.

I think we cannot stop or assume or underestimate capabilities of icos

Nobody wants to spend 3$ gas on a 10$ purchase
So I don’t really blame ico limit prices

But I am in support of a considerable and affordable starting price

of course for counting ,
i mean if 1000 people invested with a minimum,let me say 1 usd
so that mean they will got 1000 usd
then dev,will calculate everything needed for start the project
also some ico have some planning if just rechaed soft cap, they will go to milestone 1
and if hard cap reached , they can going to milestone 5
about whales or private investor,usualy they will lock their asset until some time.
i also believe min invest create for find a good investor .
like a hodl for a long time.

just imagine if a person who invested in huge amount, then he or she sell his/her tokens at once the price will dump harder
so, he or she can manipulate the price right ?
i think its better if people invested with small amount rather than in huge amount as the project can reach the cap
less amount of investments is not the problem here, but huge amount on investments is the main issue

I believe that this is a fraud because absolutely all people should be able to invest

in essence, all ICOs will not reject whales, because with the investment they provide, ICO will be very easy to reach the softcap target, not much can be done, whales always have a way to play

You are absolutely right. It's better to find 1 investor and cooperate with hime rather than with a crowd. But if the project can't take enough investments from private sales, they make public sales.

I think there are two issues when they come up with a minimum amount of money to invest. A minimum is what they want to know if the investor really wants to invest in their project. Second is the transaction fee is not low, so if the $ 1 investment is really too wasteful of fees

yes the scheme on works with ico manage on projects deliverance might helps as gathering collection of funds on supports as managing future chance on projects with the service deliverance,
as developer keep on extending entrance on authorizing use of possession as the works on objectives to manage with customs on strategic dominance on personal preference.

Project developers themselves have the right to set their own rules and, accordingly, the minimum and maximum amounts of investments — as long as no one controls the market for ICO projects. Perhaps after this long decline in the market, the situation will change and the rules when investing in ICO projects will change.

because they want to get the soft cap as early as possible not a bunch of investors that only cause a traffic in the system, it is also a prerequisite attracting other investors to invest in the 2nd stage.

In my opinion, imposing a minimum amount is needed. What do you think if someone wants to break your ICO with thousands of transactions but only 1 token purchased for each transaction? However, the minimum have to be appropriate. Too high requirement is also bad to attract small investors.

On the other hand, they want the real investors to get involved in their project. It will be better while they are deloying project.

Maybe it's to avoid very small transations and this will lead to more traffic or issues regarding to all users. And more questions to clear. Means more expenses. But it's only my guess.

I'm a friend of low entry barriers. Maybe 50$ should be enough. In many countries 50$ can be very much money.

As said above, 1000 investors will cause more question and possible issue than one investor.

To be fair, I agree here, I don't like projects where many rich people hold most tokens or coins, like Ripple. Such projects are not good ones. 

this is a very competent decision, because in this way they raise the amount that they can collect from investors and the project will develop faster

In my opinion, the reason why there is a minimum nominal is that they have had the numbers of the investors that they will gain. In my opinion, so far, the minimum number to invest in an ICO is also small so we can make it as the consideration. It also depends on how they can distribute the token or coin to the investors if they only buy very small coins.

What will happen if these stakes will be held by a single or a few people only? there will be a lot of manipulation in the market because it has distributed in a few token holders only. A few holders can manipulate the price of coin.

I do not support this decision as I think that people should be able to invest any amount

This is crowd sourcing and they should not put a minimum on how much an investor should invest in a project. Putting a minimum is like a discrimination to people who want to invest but have only small amount of money on hand.

I see most ICOs limit the amount that investors can invest in. It's necessary for the project who don't want a single investor to hold too many coins.

They want to assure that they will reach even the soft cap.

They can't just allow any person to invest with any amount. That's like an hybrid type of distribution, they have a model which they follow so they impose a minimum amount of investment.

I think that because in this way they screen out potentially weak investors who don’t donate anything to the project

I have seen a lot of ICOs, where fixed and minimum amounts are asked for. For instance, an ICO might ask for $100 as the minimum amount anyone can invest and there are some that sometimes ask for huge amount of money. This can result into investors not wanting to invest into the project, because they are being care of not investing what they cannot afford to loose.

It could be technical issues, if they allow really same sales, it could clog up the transactions on the ETH network (or other network if they ICO on some other smart-contract platform) and slow down their system.

It does seem that it would be better to have things be more distributed, hence, why Bitcoin has such a higher price than all altcoins. Bitcoin is more distributed, there is gamblers who have it, drug dealers, politicians, libertarians, crazy woods people, gun holders, people in every country in the world. It is extremely distributed, and continuing to be even more so because the ability to mine is open to everyone. Anyone can get in the mining game and fabricate chips to attempt to do proof-of-work.

This is why Bitcoin is a phenomenon, and ICOs have been a flash-in-the-pan, using gimmicky techniques and silly restrictions like you mention. They don't want to help people. They want to help themselves, the people ICOing.

I am not talking about the private sales and pre-sales. I am talking about the main sales.
Don't you think ICOs should allow people to invest any amount of money they want? It will cause the tokens to be distributed among more people.
Assume that 1000 people are participating in an ICO and each of them is investing only 1 dollar. Don't you think they are more helpful than a person who is investing 1000 dollar?
Better to consider a maximum amount instead of a minimum and do not let the whales manipulate the price.