Are you launching a new cryptocurrency token? Do you want to convert enthusiast to willing investors?
The success of your underlying blockchain project depends on how you write your ICO white paper.
What is an ICO ?
An ICO is an online fundraiser where people invest in a company’s idea, and in return, are issued with cryptocurrency tokens. Traditionally, companies used Initial Public Offerings (IPOs) to raise funds.
However, the concept of Initial Coin Offerings is quickly catching on and has become the defacto way of raising funds.
As opposed to IPOs, which are highly regulated, initial coin offerings lack regulatory oversight. This has promoted a myriad of scam ICOs.
This rise in fraud ICOs has led to the establishment of guidelines for launching any crypto coin or token. One requirement for businesses is to write a white paper before launching any coin or token.
What is an ICO White Paper?
An ICO white paper is a highly detailed document that contains a description of a blockchain project. A white paper outlines the problem a project aims to solve, the solution, as well a description of how the project will interact with users.
A white paper is essential to the success of any initial coin offering. A successful white paper should be able to withstand extreme scrutiny by investors, tech enthusiasts, and legal experts.
Structure of an ICO White Paper
Although individual startups tend to use a customized structure, a well written white paper should include:
- An overview of the company, Its philosophy, and ethos.
- A description of the problem that the company is trying to solve
- A description of the proposed technology and the solution it offers.
- Token description
- An explanation of how the funds raised will be used.
- A description of the development team.
- A roadmap
- Risk assessment.
A badly written white paper will seriously destroy your project’s chances of success.
You need a document that gives a detailed description of the venture, while at the same time capturing the interest of investors and enthusiasts. Writing a good white paper requires achieving a balance between the technical and marketing aspects of writing.
How do you write an ICO white paper that will ensure excitement and investment in your creation?
Introduce the Project
This first section of a white paper contains introductory information about the organization and the problem. This section is usually 1-2 pages and does not contain a lot of technical information.
When writing the introduction, you are advised to frame it like a letter from the CEO to future investors. The introductory section should include an explanation of the company’s philosophy, the target market, and a description of the problem.
Describing the Problem
The key to the success of any startup is a clear understanding of the problem that the company wants to solve. Before anything else, you should outline the problem in a way that it is easily understandable to your readers.
Using simple language when explaining the problem will allow buyers to relate and engage with your white paper better.
If you do not define the problem correctly, readers will not see the need for your solution, making the rest of your white paper useless.
How do you best describe your problem?
I suggest using Aristotle persuasion techniques –the ethos, pathos, and logos appeal. By using the ethos, pathos, and logos persuasion appeals, your readers will have a better understanding of the problem.
Ethos (Ethical Appeal)
Using the ethos persuasion technique involves establishing your credibility to your readers. You convince the reader that you can be trusted. This is perhaps the hardest persuasion technique to master, but the most effective to use when writing a white paper. One way to establish credibility is to provide information in an unbiased way.
Do you have supporting evidence that your product is better than the competition? Has any respectable figure or organization shown interest or support in your project? Use this information and evidence to boost your credibility.
Rather than slandering the competition within your space, try to provide an unbiased argument. You can do this by explaining a similarity between you and the competition, then provide evidence on why your product is better than the competition.
“YouTube has revolutionized the video and content sharing industry. Through YouTube, millions of content creators earn a living through their music and videos. However, the YouTube ad revenue sharing approach forgets the most important person on the network – the user. A blockchain-powered content sharing platform would promote equal sharing of revenue, and ensure that users earn tokens for sharing and watching content.”
Logos (Logical Appeal)
When you use the logos approach to explain the problem, you appeal to your reader’s intelligence and reasoning. Bombard your audience with credible evidence to support your argument. This evidence includes facts, figures, historical documents, or quoting an authoritative figure in your field.
To invoke the logos, you are advised to use real-world examples that your readers can easily relate to. Use figures to show the extent of the problem then explain your solution.
“We all crave good health. This is why when we get sick, we rush to the hospital or the nearest pharmacy to get a prescription. However, according to the FDA, up to 21 percent of medication found in the US market is counterfeit. With a blockchain-powered supply chain management system, counterfeit drugs will be eradicated from the market. Our technology allows patients to shop for medication without the fear of the medications being fake.”
Pathos (Emotional Appeal)
Is your problem an emotional one? Use the pathos appeal to get through to your readers. This persuasion method will require you to draw on emotions of anger, joy, fear, or sympathy.
Since white papers are persuasive documents that rely on facts and evidence, avoid overusing the pathos appeal.
When talking about the issue of counterfeit medication, you can invoke fear in your audience by hinting the effects of fake and untested medication.
“Imagine going to the pharmacy with the hope of getting drugs to help you get better. However, the pharmacist sells you counterfeit or untested medications, which puts your life at a higher risk. With a blockchain-based supply chain management, you will be able to track the source of the medication to ensure its authenticity.
An effective white paper makes use of all three appeals. However, a more persuasive paper employs a higher appeal to ethos as opposed to pathos. Where money is involved, people want to know the facts more than how a situation makes them feel emotional.
Describing the Solution
This is the second most important part of your white paper. Here you describe the proposed product including how you will solve the problem.
However, blockchain technology is still a foreign concept to many people; therefore, the explanation of the product can be technical, making it difficult for some readers to understand.
What do you do to improve understanding?
Catering for both technical readers and the ordinary enthusiast who has zero interest in how your product code works will require you to split this section into two subsections.
- The technical solution
- The white paper solution (Your Sales Pitch)
The Technical Solution
Your product will most likely have a code. This code is often subject to a third-party audit to ensure the blockchain product functions accurately. The result of this audit should be published in this section. Include formulas on how the project functions, and all other technical information.
The technical part of the solution also involves making the code public to allow investors with a background in computer science to evaluate your system for any weaknesses. The technical solution part allows investors to know if the product is ready for use.
The White Paper Solution
Also known as the sales pitch part of the white paper, this subsection provides a simpler explanation of the product and the proposed solution. One of the most effective ways to get your message across is to use infographics to explain your product and the solution.
Since this is the part that will act as your sales pitch, use simple language that engages the investor to act.
The best way to do this is to use copywriting techniques that have been proven to result in increased conversions. These include:
- Using short sentences, simpler words and short paragraphs.
- Ask questions
- Use catchy headlines.
- Explain the benefit and not the features.
- Add a dash of your personality.
An important aspect to remember when writing this section is to concentrate on the reader and not the product. Bombard the reader with the benefits they are likely to get from using the product.
Rather than stating a feature of your product, explain to readers what advantages this feature offers them. For Example:
Product: A blockchain-powered content sharing platform
Feature: Ability to create smart contracts that are easily executable.
Benefit: The ability to create smart contracts will result in transparent revenue sharing, ensuring you as the content creator receive full compensation for your work.
Although you explained the feature, you let the reader — a content creator know that by using your technology, they will be able to enjoy the full benefits of their work.
Remember, it’s not about you and your company, but what your product can do for the reader. This is what converts enthusiasts to investors.
Describe the Token
In this section, you explain to your readers every detail about your token. This includes how the token will be distributed, the price of coins, their role in the project, and how the tokens will travel through the decentralized network.
For this section, you are advised to use graphs, diagrams, and charts to allow better understanding among your readers.
ICO tokens can perform different functions including acting like a currency, security, or utility. You need to explain each of these functions in this section including the rights of a buyer. Security tokens have a different function from the utility or currency tokens.
You also need to explain the token generation process, including the underlying technology used in the creation of the tokens.
You should also explain to your audience how many tokens will be produced and if you have plans to hold any reserve coins.
Describe the Development Team
Would you invest in a company whose board of directors is unknown?
The same way you would want to know a company’s management team before investing, investors want to know the people behind the blockchain project. It’s simple; you can’t invest with someone you don’t know, so ensure to introduce your team to potential investors.
When writing this section of the paper, try to avoid using technical language. Take a humanistic approach to this section by having photographs and short biographies of your development team.
When describing your team, consider the following aspects:
- What experience does each team member have with blockchain technology
- What is each individual’s role in the project
- Why will these people help the project to succeed
In this section, don’t be afraid to show personality.
Give a Road Map
No one wants to invest in a project with an uncertain future. Your investors will want to know the durability and scalability of the project. The roadmap section allows readers to see how their investment will grow over time.
When creating a roadmap, try to use as many visuals as possible. A chronology diagram would be perfect as it allows easy tracking of milestones by both the investors and the development team.
Provide a Risk Assessment
Any investment comes with a risk. A wise investor will conduct a risk assessment before putting their money in any company.
Since blockchain technology is highly unchartered territory, conducting a risk assessment is paramount before making any investment. As such, when writing your ICO white paper, you should explain to your investors the most significant risk they are likely to face after investing in your company.
In your ICO white paper, explain to your readers all risk associated with
- Crowdfunding using the ICO
- System vulnerabilities
- Legal issues
- Functionality of the technology.
Outsourcing your White Paper
Are you too busy to write your white paper? Is the above information overwhelming? Maybe you don’t consider yourself a wordsmith.
You can outsource your ICO white paper to a professional writer.
However, let’s face it; no one can provide as much detail of your product as you can. Many writers̄ including me, will try to convince you that they are the best to write your white paper. Some will even provide examples of white papers they have written.
We impress you with our in-depth knowledge of the blockchain ecosystem, and in some situations, we even offer advice to improve your ICO marketing.
After closing the deal, you expect a truly unique white paper, only to receive one with a similar structure as another one on the internet.
Humans are naturally lazy creatures and will always look for the easiest way to do things. In the ICO white paper writing niche, many professional writers choose to use pre-created templates. This brings forth similarities in terms of image placement, font, and structure; taking away the flare you expected your white paper would have.
What are the best practices for outsourcing your white paper?
- Provide a 3-4 page executive summary to the writer. This will act as a guide and will ensure the writer easily grasps your message and concept.
- Provide enough information and research links that the writer can use to get information for your white paper. As a writer, I am a wordsmith. I may lack in-depth knowledge of the video sharing industry or supply chain management. It is up to you to provide the writer with enough information and links to ensure the white paper is as detail as you would want it to be.
- Employ a graphic designer to design images and infographics for your white paper. Hiring a graphic designer will help to liven up your white paper with colorful graphics.
- Split your white paper into several deliverable sections, normally not more than two pages. Require the writer to send every two pages for review to ensure enough specificity and detail is achieved.
- Remember, your white paper is a marketing document. Your writer should know how to take a reader through the marketing funnel and move them from enthusiast to willing investors. Ensure that your writer understands the age-old AIDA technique. This is where they take the reader through four stages of persuasion from Awareness to Action
- When formatting your white paper, put your biggest benefit on the front pages. In most cases, this is the tokenomics sheet. Readers will first want to see how much they will gain before reading your white paper.
Your white paper will play a crucial role in the success of your ICO. Ensure that it is well written and adheres to all the above requirements.
Do not use an overly serious language, but try to engage the audience as much as possible. Before commencing your white paper, ensure you do thorough research of the market and talk to your intended users.
Provide factual information and avoid exaggeration.
If you follow all the advice above, you can rest assured that your white paper will be able to rake in millions within a few days after launching your ICO.
However, if you find the process of writing too complicated and tiring, hire a professional to write your ICO white paper today.