What is Token sale
A token sale occurs when a company’s tokens are sold to investors privately during the preliminary phases of a project’s life. In the token sale phase, tokens are not yet presented to the public nor made available for trade. A private initial coin offering could be considered a token sale.
Token sales employed early on allow a cryptocurrency startup to collect funds that can be used to further progress the project. If investors decide to purchase the project’s tokens, they could be mandated to lock up some of the purchased tokens for a certain time. Early investors who decided to acquire the company’s tokens could make substantial profits if the company grows significantly after being listed.
During the token sale phase, a cryptocurrency startup’s team members devote a lot of effort in marketing their tokens and products. Therefore, this phase represents a good time for investors to learn about the project and, comparing different projects, identify the good projects with growth potential to invest in. Moreover, the project’s white paper is usually made available to aid investors in evaluating the quality of the project.