Building a protocol or dapp is a challenging, time consuming process. Raising funds by issuing a token provides a boost in capital, helping founders go from bootstrapping to acquiring the runway needed to really take off. It raises project visibility, consolidating a support base and harnessing collective brainpower. These benefits aren’t as easily accessible when a team is bootstrapping their startup. We want to help builders design their first sale for maximum impact.

Fuzion has three products designed to help teams launch their token and raise capital to turn their ideas into reality, at any point in the product life cycle. Ignition is the first port of call; it helps raise seed capital for teams needing resources to get off the starting block and move toward a public sale.

For Builders, this article explains why Ignition is a good choice for raising and how it fits with other Fuzion products like Pilot for public sales and Bonds for treasury utilisation.

Read how all three work together in our post Never Stop Raising.

For buyers, we’ll touch on the important considerations when participating in an Ignition sale.

The Basics Of Creating A Sale

Ignition uses a simple sale process designed primarily for teams conducting an angel or seed round, where they need the capital immediately but the tokens are distributed to buyers at a later date. As a self service platform, anyone can create a sale for any token available on Kujira, whether it’s bridged or native. The seller has significant versatility through control over a number of variables. 

Our Docs have comprehensive step-by-step instructions. Getting hands on with the product is the best way to understand how the variables interact. Set up a few sales on testnet to understand what works best for you.

Some of the variables included are:

• Duration – When the sale starts, and how long it lasts. This could be anywhere from an hour to several days.
• Token Quantity – Sales use a set number of tokens. When they’re all bought, that’s it; the sale is over.
• Price – Set by the seller, and the same for everyone who participates. Sellers also choose the purchase denom used to buy the tokens.
• Availability – Sellers set a min and max amount of tokens buyers are permitted to purchase. 
• Participation – The seller chooses to make a sale accessible to anyone or restricted to whitelisted addresses of their choosing.
• Access – Sellers determine when the tokens will be made available to participants to claim. 

If you already understand all of the terms above, you’ll have no trouble, and it’s very simple to work through the process on Testnet.

Considerations For Launchers

Creating a sale is the easy part, but getting the parameters perfect for your takes more effort. Here’s a few considerations to get the most out of your sale design.

1. Start With The End in Mind

An Ignition sale is probably the first time you raise capital but it is unlikely to be the last. Fuzion designed Ignition, Pilot and Bonds so teams can raise funds at any point in their product’s life cycle. Your Ignition sale should take into consideration future capital raising efforts using our other platforms. This is particularly relevant when considering the circulating supply of your token, capital requirements and how that impacts a Pilot sale, or a Bond later on.

2. Set Clear Objectives

Prospective participants will require information. If you’re still in the building and concept stage, prepare for questions about your plans, capacity, credentials and timelines. Accounting for how you’re using the funds and the milestones in your roadmap they need to carry you past is expected, along with your plans once you get there.

At such an early stage, a token buyer is primarily evaluating the team’s ability to deliver, and your answers help them assess if you’re the real deal.

3. Integrate Sales and Tokenomics Design

An Ignition sale should fit like a puzzle piece into the picture your tokenomics lays out. It’s an early step in a long journey and lays the groundwork for your future endeavours. If it creates obstacles down the line, that’s a red flag, and may cause people to question your plans, commitment, or judgement. Think about the consequences to avoid risking long term benefits for short term gains.

4. Crunch The Numbers

An Ignition sale is a great way to create powerful bonds between you and the participants. They are your earliest supporters. They’re likely to be your loudest advocates and most intense critics. They’ll probably be with you the longest. When you’re designing your sale, it’s worth spending time considering things like how many participants you’d like to have, and the influence each of these OGs wields on your project. Does it make more sense to have a broad group of participants or a tight cadre of backers? Should the tokens be evenly distributed with a low cap? What criteria are you using to select a whitelist or can anyone take part?

5. Refine Your Strategy

Your sale factors can have a big impact on how your token, and therefore your project, are perceived. The combination of a large discount, whitelisted participants, short release schedule and no max cap might stoke concerns that a small group of “whales” will be in a position to exert significant influence on the market. Another example of sale design influencing narrative would be setting a whitelisted sale with a max cap that guarantees all participants can take part, showing a commitment to fairness and a wider distribution, without focusing on who takes part. Each sale variable alone doesn’t say much, but combined they shape your narrative, so pay close attention to the impression they create.

Buying into an Ignition Sale

For buyers, an Ignition sale is, usually, relatively early in a project’s journey. For projects that go on to enjoy success, they hold enormous potential upside. But no one can predict the future, and circumstances change. Token access may be a long way off, as will utility, be it governance, staking, trading or any other function. There are no guarantees.

Participation in Ignition sales should be evaluated with all of this in mind. Buying tokens for projects in their formative stage is significantly speculative, so it’s important that buyers understand and accept the risk it entails.

It’s equally important to monitor the progress of the project, keeping up with the developments as things progress. It’s very rare that plans made in the early stages are executed to the letter, and staying up to date mitigates the risk of missing important developments and updates.

Lastly, while it’s by no means a condition of sale, teams will likely look to their Ignition sale participants to support and assist the development of the project however they are best able. Their goals are to launch and run a successful protocol, and the assumption is that sale participants share these. This may be their first project involving a token, and they are likely to look to their early community and welcome advice and guidance from those with more experience to help them navigate the path to success. 

Conclusion

For builders needing runway, Ignition is a fantastic way to generate the capital needed to take things to another level. For early supporters of a project, an Ignition sale presents the opportunity to invest in the future of a project that shows potential. A succesful Ignition sale unites a community and lays the groundwork for future opportunity. We encourage any project reaching the end of their bootstrapping phase and taking things to the next level to check it out. It could be just what you need to raise the profile of your project and fuel the next phase of development.