If it was about processing payments it seems that using XLM has more benefits for the final application.
Just as an example, let's say I was making a periodic payment platform for a utility. The client gets a discount if they prepay into the account. Then as their bills come due the amount is automatically deducted from their account.
For this case would there be any benefit in issuing a token, rather than just XLM?
I get that an ICO would fund a project, but the project should ultimately produce a product (in a perfect world). So then the token should have a use case for the application. Are ICOs more relevant when it is backed by an asset, so they are relevant when the token is seen as an investment platform?
What is the use case for an ICO as against simply using XLM
Few things from the top of my head:
- If we're talking about utility token, then you might want to guarantee investors, that for 5 tokens they can buy your product, with XLM you can't promise that because of rate fluctuations
- You might want a way to identify who your investors are, for example to pay them dividends or to give access to something or simply a discount for your services.
- ICO attracts users by promising return on their investment. Token price usually correlates directly with how good or bad project is doing. So good performing ICO token may grow 2x-50x and that's what investors are looking for. If you just give them XLM, then it's performance is much more complex and depends on how much SDF decides to liquidate today, you may not see correlation with project success at all.
umbrel thanks.
I found this
https://www.stellar.org/blog/understanding-initial-coin-offerings/
digesting....