Learning the friendly way

If you know anything about the NFT craze in the cryptosphere, you’ve likely heard of the wildly successful Bored Ape Yacht Club (BAYC). Expanding on this concept is the ApeCoin ecosystem, a cryptocurrency positioning itself at the forefront of Web3. ApeCoin is controlled by the ApeCoin DAO, a decentralized autonomous organization of which all APE holders can become a part.

What is the ApeCoin ecosystem?

ApeCoin is an ERC-20 utility and governance token used within the APE ecosystem. The founding roots of ApeCoin lie in the NFT series Bored Ape Yacht Club (BAYC), a creation by Web3 company Yuga Labs. 

Enjoying viral success and arguably one of the most successful NFT collections to date, the 10,000 unique BAYC cartoon drawings earned cult status when their prices soared and big celebrities started buying them. To date, the most expensive BAYC NFT sold for a staggering $3.4 million.

ApeCoin, the fungible token, and a number of products and services make up the ApeCoin ecosystem. The coin is governed by the ApeCoin DAO, of which all token holders are eligible to become members. The ApeCoin DAO makes decisions on matters such as governance rules, partnerships, projects, Ecosystem Fund allocations, and more. The Ecosystem Fund supports community-driven initiatives and was allocated 62% of the ApeCoin supply when launched. 

In April 2022, Yuga Labs started minting virtual land in their Otherside metaverse, using ApeCoin for payment. ApeCoin is used to facilitate all transactions taking place in this virtual world.

Who created ApeCoin?

ApeCoin was created by Yuga Labs, inspired by the Bored Ape Yacht Club project. Supported by the Ape Foundation, ApeCoin is governed by the ApeCoin DAO which creates a framework for permissionless governance processes. These decentralized authoritative frameworks are designed to create a fair and inclusive ecosystem in which the coin can flourish. 

Within the Ape Foundation is an administrative council known as the "Board" which is responsible for implementing the decisions made by the ApeCoin DAO members. This Board is voted in by the ApeCoin DAO members on an annual basis and is not controlled by Yuga Labs. 

How does ApeCoin work?

ApeCoin grants holders access to exclusive games and services within the Ape Ecosystem and can be used for transaction purposes on the Otherside metaverse. It also acts as a tool in which third-party developers can tap into the Ape Ecosystem by incorporating APE into their own projects, games, and services. 

Animoca Brands, for instance, created a play-to-earn (P2E) game called Benji Bananas that utilizes ApeCoin, incentivizing and rewarding players with APE. 

From a governance perspective, holders of APE can become members of the ApeCoin DAO which vote on decisions impacting the ecosystem's functioning and growth. This might include anything from which partnerships the ecosystem should pursue to how funds are allocated. These decisions are then implemented by the ApeCoin Foundation, the 5-member Board acting as the DAO's legal representative. 

What are APE tokens?

ApeCoin (APE) is an ERC-20 token compatible with the Ethereum blockchain and any supported wallet. The coin was launched in March 2022, with all 1 billion tokens minted at once. When minted, 62% of the coins were allocated to the Ecosystem Fund which are then allocated to community-based projects based on Ape DAO decisions. 30.25% were released into circulation for the community to engage with. 

How can I buy the APE token?

If you're considering including APE in your cryptocurrency portfolio, look no further than the Tap app. With the Tap app, you can conveniently manage and trade a diverse range of digital assets, including APE. Whether you're a seasoned trader or new to the world of cryptocurrencies, our user-friendly interface and intuitive features make it seamless for anyone to navigate and engage in the crypto market

You've likely come across the term "ERC-20" in your crypto endeavours, with plenty of these token standards currently ranked in the top 10 (even top 100) cryptocurrencies. But what does ERC-20 actually mean, and what is a token standard? In this piece, we're uncovering everything you need to know about these popular crypto terms.

To start things off, ERC stands for Ethereum request for comment.

What Is A Token Standard?

Let's start at the beginning. When Ethereum was created to provide developers with a platform on which to build decentralized apps (Dapps), the team incorporated several token standards. 

These token standards allow new projects to create, issue and deploy various functioning tokens on the blockchain. Each token standard is a smart contract that holds a set of particular "rules" that must be followed in order to be created.

In recent years a number of blockchain platforms that provide Dapp creation functionality have created their own token standards, however, for the sake of this article we are only looking at Ethereum.

The most popular token standards on Ethereum are the ERC-20, ERC-721, ERC-777, and ERC-1155 tokens. Each holds its own functionality and would be utilized depending on what the Dapp intends to use it for, i.e. will it be a transferable asset or be used to hold ownership rights. 

What Is An ERC-20 Token?

By far the most popular token standard utilized on the Ethereum network, the ERC-20 token is a fungible token that can be bought, sold and traded in the blockchain ecosystem. To date over 350,000 ERC-20 tokens have been created. 

Similar to the functioning of other cryptocurrencies like Bitcoin and Litecoin, ERC-20 tokens also hold value and are able to be bought and sold, however, they operate solely on the Ethereum blockchain. This means that all ERC-20 transactions conducted are executed on the Ethereum blockchain network.

The rules associated with this particular token ensure that it can function optimally on the Ethereum blockchain, and must be submitted to the community leadership for approval prior to its launch. While some rules are mandatory and others optional, the required ERC-20 rules are as follows:

• total supply: defines the total supply of the token
• balance of: indicates how many tokens are in a wallet address
• transfer To, Transfer From: must be able to be transferred from one user to another
• allowance: ensures that wallets have a sufficient amount before making a transaction
• approve: checks total supply against transactions 

The optional elements are centred around the token's name, its ticker symbol and how many decimal places it would have %u200B For instance, Ethereum's token name is Ether, its ticker symbol is ETH and it is divisible by up to 18 decimal places.

Examples of ERC-20 tokens are Augur (REP), Basic Attention Token (BAT), Maker (MKR), USD Coin (USDC) and OmiseGO (OMG).

Can you mine ERC-20 token?

ERC-20 tokens, unlike Ethereum and its native coins (ether), cannot be mined. That is, new tokens are 'minted' when a planned initial token offering (ICO) or security token offering (STO) event takes place. Usually, these events involve users sending ether to a smart contract address and in return receiving the newly minted ERC-20 token.

An ERC-20 token is technically a smart contract so it's possible for the developer team behind an ERC-20 token to issue new tokens at will. However, this isn't recommended because users would be less likely to trust these tokens if they could be minted at will. There must be a measure of scarcity in order for tokens to be valuable. 

The pros & cons of ERC-20 tokens :

Some of the main benefits of ERC-20 tokens include:

Fungible

Fungible ERC20 tokens are interchangeable, just like cash. Although the coins are technically distinct, they function in exactly the same way. You can trade one for another and they will be functionally equivalent, just like cash or gold.

Fungible tokens are fantastic, and there's a lot of value in the technical aspect. On a technical level, it's worth noting that fungible tokens don't add extra value to goods. They're typically beneficial in a variety of commercial scenarios.

Broad adoption

The popularity of ERC-20 tokens is quite apparent in the cryptocurrency industry. The number of exchanges, wallets, and smart contracts that already support newly-launched tokens has made it easy for new projects to integrate with them. There is plenty of developer support and documentation to go around.

Flexibility

The first thing to note about ERC-20 tokens is that they are highly flexible and may be used in a variety of circumstances and applications. This is due to the fact that these tokens are very customizable. They can be used in a lot of different scenarios such as Loyalty points programs, in-game currencies, or digital collectibles such as NFT's.

Some of the main cons of ERC-20 tokens include:

Mainstream

The popularity of ERC-20 tokens is also their greatest weakness. There are so many projects using the same standard that it's difficult to stand out from the crowd without differentiating your token in some way. Moreover, since they're essentially all the same on a technical level.

Fraud and Scams

It takes minimal effort to create a simple ERC-20 token, meaning that anyone could do it for good or bad purposes. As such you want to be careful with what you're getting in when considering blockchains projects because there are some Pyramid schemes masquerading as legitimate projects out there and trying to get unsuspecting investors involved in their scams. As a result, when looking at blockchain projects, you need to be cautious with what you are interested in purchasing.

Other ERC Token Standards

While there is a large range of ERC tokens available, below we've outlined the most popular ones (excluding the ERC-20 one as it is listed above). 

ERC-721 

This token standard is for a non-fungible token (NFT) which gained huge popularity in the last year across the gaming and digital art worlds. These tokens represent ownership of something, and cannot be used interchangeably. 

ERC-777 

An evolution of the ERC-20 token, the ERC-777 provides more usability, particularly pertaining to its ability to mint or burn tokens. It also holds improved transaction privacy and an emergency recovery function.  

ERC-1155

This token standard allows for the creation of both utility tokens and non-fungible tokens. Making trading more efficient, the token standard allows for bundling of transactions which in turn saves costs. 

Learn More about cryptocurrencies and blockchain.

You can learn more about crypto basics from our specially created Learn centre, which covers everything a trader ought to know about cryptocurrencies and the blockchain industry. 

Investing has become an increasingly important part of many people's financial plans, as it offers the potential for greater returns than simply leaving money in a savings account. By investing your hard-earned money, you can potentially build wealth over time and secure a better future for yourself and your family.

But what exactly is investing? Put simply, investing involves putting your money into assets with the goal of making more money. There are various types of investments available to individuals, from stocks and bonds to mutual funds and real estate investments. Understanding how each type works is key to making smart investment decisions that will help you meet your financial goals.

Investing can also involve investing in time and labor, especially when it comes to business operations. These investments are similar in that one expects to see returns. While no investment carries a guarantee, understanding what they are and how they operate will assist you in making smart financial decisions. 

What is an investment?

When you invest, you're essentially trading current resources (like time or money) for an asset that has the potential to grow in value. Ideally, if you choose to invest in the right asset at the right time, your investment could gain value. As an example, when you trade on the stock market, you are buying stock with capital in the hope that in time the asset will grow in value and sell for more money than the initial capital investment. 

There are plenty of different types of investments one could use to grow their money, from stocks and bonds to commodities and cryptocurrencies, as well as mutual funds and real estate properties. The concept behind every investment is that it will make more money for the investor in the long term.

A smart investment allows an individual to not only make money but increase their total net worth. However, it's crucial to remember that every type of investment is speculative and there is always a possibility you will lose some or all the money you put in. For example, if you purchase stock shares or a piece of property, the value could decrease soon after you buy it. For this reason it is imperative that one assesses their risk tolerance before investing in something so as not to lose money.

The definition of an investment is not constant and can change depending on the situation. For instance, in macroeconomics, investing refers to purchasing items now that will be used later to generate income. While a company or individual from one nation might invest in business properties located in another country, such as building a factory which is known as foreign direct investments.

What are the different types of investments?

With a variety of options available, each investment type carries its own potential for returns, risks, and other factors such as tax implications and management fees. Below we highlight several options available to the everyday trader that can be used individually or together as part of an investment strategy to contribute to their financial goals.

Stock Market

By investing in stocks on the stock market, you are purchasing fractional ownership of a public listed company. People generally invest in stocks with the aspiration that their value will have gone up by the time they sell them. In order to make a profit from selling stock, the price will need to have grown enough to cover any trading costs and transaction fees associated with the trade. 

Investing in certain stocks might also make you liable to dividend payouts, where a company distributes profits to shareholders (holders of stock) based on the company's performance. 

Read more about investing in stocks in our What Are Stocks article. 

Mutual funds

Mutual funds are investment vehicles that pool the money of many investors and invest in a variety of different assets such as stocks, bonds, and other securities. A mutual fund is managed by an investment professional who makes all the decisions about where to put the money within the fund.

These professionals seek to maximize returns for investors while maintaining a certain level of risk. Mutual funds are a great way for investors to diversify their portfolios, as the fund’s holdings may include stocks from many different companies and sectors. Additionally, mutual funds reduce the amount of research required to make an informed investment decision since all decisions are made by the fund manager. Investing in a mutual fund may come with higher fees than other investments.

Bonds

By purchasing a bond, you are essentially loaning money to a government, company, or other borrowing entity. In return for your loan, the debtor (the bond issuer) is required to repay both the debt and any associated interest payments. 

However, it's worth noting that on occasion companies and countries default on their bonds, meaning that they can't make scheduled payments to the bondholders which will result in the investor losing money. This is almost always a last resort option as these establishments know that defaulting will scare off investors going forward.

A bond is a fixed-income instrument that pays periodic interest payments until the agreed-upon end date when the final payment is made and the loan's original amount is repaid.

Commodities

Commodities are raw materials that can be traded for one another, such as gold, beef, and gas, expanding to foreign currencies and indexes. Funds that invest money in commodities will typically invest in resources such as precious metals (silver, gold), energy resources (natural gas, oil), and primary agricultural products (wheat). 

Other investment options (real estate investments, etc)

Other investment options include real estate, options, futures, and certificates of deposit. 

Before investing in any of the asset classes mentioned above it is imperative that one understands the financial instruments and their own risk tolerance entirely, as well as the terms involved in the investment, the fees or transaction costs and the risks involved. 

It is also important for savvy investors to understand the tax implications of their investments and the capital gains tax they might be required to pay on any investment returns.

How do investments work?

While each asset class might differ slightly, they all require an upfront investment of capital. The intention is that this will later create a return in a monetary form of higher value. 

When investing in financial products such as bonds, stocks, or a mutual fund, investors will typically have to set up an investment account with a professional such as a brokerage firm or money manager. This person can then advise on which products to invest in and manage your portfolio.

Investing in real estate will involve buying a house, usually done by making a down payment or investing in real estate investment trusts. These properties can either be used to live in or rent out and generate future income. The intention here is that the house appreciates in value over a certain period of time and can later be sold at a higher price. Depending on the property and area these types of investments can range from high risk to low risk.

How investments drive economic growth

Investments are not just for personal or corporate benefits, they play a big role in driving the broader economy. Through factors like building consumer demand and job creation, investing can play a direct role in economic growth. 

For instance, a company might decide to sell stocks and issue corporate bonds in order to raise capital. This capital can then be used to build a factory, create a new product line and hire new employees. This then drives the greater economy while also building the company's and investors' wealth. 

In another example, governments might use the funds raised from corporate bonds to fund public projects, fix the roads, or build social programs in communities. Or individuals might use gains made from investments to further their education or save for retirement. With more income comes more consumerism, in turn contributing to economic growth.

How to start investing

If you're ready to start investing, you will first need to determine your risk tolerance and which asset class you wish to pursue. If you're just starting out, start small and grow instead of taking on too many things at once. Gaining an understanding of your risk tolerance will help you to navigate where start investing.

Research

Before you begin, ensure that you have a thorough understanding of the market you wish to invest in, and understand all the associated risks. Always do your own research, and don't rely on one outlet or individual to be the sole source of information. If the option is available, consider hiring a professional to assist you. 

Understand market movements

Another important aspect to understand before investing is that markets will always have fluctuations. Even if they grow over long periods of time, they will still go through periods of increases and declines. Don't rely on past performances to dictate future outcomes. 

Open an account

To get started in investing you will need to open an investment account that allows you to both buy and sell the financial instrument. Looking at investing in stock, some investors will open a brokerage account that will execute trades on their behalf, while others might use a portfolio manager who oversees all their investments. Always do your research before parting ways with your money.

Have your financial affairs in order first

While investing is designed to create wealth, it is important to have a grasp on your personal finance beforehand, and ideally have an emergency fund set up for any unforeseen expences (so that you won't have to tap into your investment accounts).

Conclusion

An investment is the act of buying an asset with the intention that it appreciates in value over time. Before people invest it is imperative that one establishes their risk tolerance to establish how much risk one has to navigate.

Investments can be managed by professionals or individually, depending on the investors preference. It is also important to note that return on investments will typically be imposed by capital gains taxes, depending on the jurisdiction. 

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An asset can be described as a resource or item that provides future economic benefits to the individual, corporation, or country that owns it. Assets have long had a place in a company's balance sheet, but today take on a broader identity when associated with the broader financial sector. From financial assets to assets that provide future economic value, below we outline everything you need to know about assets.

What is an asset?

Assets can refer to an item or resource that holds economic value, with the individual, company, or country that owns it being able to expect future monetary benefits. Assets can be held to maintain liquidity or sold to make a profit. These assets are usually assigned a dollar value upon which their liquidity or potential profits can be judged. 

Assets owned by an individual are referred to as personal assets, while assets owned by a company or corporation are referred to as business assets.  

Assets are used to increase net worth, raise business value, and more. Assets can be physical or intangible, such as gold or Bitcoin. Individuals and companies alike use assets as a means to provide and prove solvency, financial health, and equity. They can be used as liquidity to secure loans or can be sold to make a profit. Business success probability is generally worked out by subtracting liability from total asset value. 

An asset can be considered a resource that in the future can generate cash flow, whether it's manufacturing equipment or a patent. 

Assets can be categorized into current assets, fixed assets, tangible and intangible assets, operating assets, and non-operating assets. 

How do assets work?

Individuals, companies, and governments accumulate assets with the expectation that they will provide short-term or long-term economic gains in the future. Assets do not promise gains though, as assets can either appreciate or depreciate in value, with gains only realized after the sale. This volatility can affect the sale value and change the overall solvency of a person, corporation, or country.

Solvency implies that the assets held are enough to manage or pay back outstanding liabilities. Companies usually use a balance sheet, covering current assets, liabilities, and equity, to evaluate how the held assets suffice against their liabilities. But before we delve deeper into the broad topic of assets, let’s dissect the current most common types of assets. 

Types of assets 

There are 6 main examples of assets that can be broken down into the categories listed below. The definition of assets is broad so one asset may fit into one or more asset classification categories. These are the most popular types of assets. 

Current Assets (business assets)

Current assets can quickly be converted into cash, otherwise referred to as liquid assets, and are used to pay bills or settle liabilities promptly. Some examples of current assets include but are not limited to cash and cash equivalents, accounts receivable, inventory, or prepaid expenses.

Fixed Assets

Fixed assets, otherwise referred to as non-current assets, are assets that are purchased for long-term use, more than 12 months usually, and are not likely to be converted quickly into cash. These assets hold future economic benefit. Some examples of fixed assets include land, buildings, or equipment.

Tangible Assets

Tangible assets refer to assets that you can see and touch, also known as physical assets. These types of assets would be considered as cash, inventory, buildings, stock, machinery, or furniture.

Intangible Assets

Intangible assets refer to an asset that lacks physical substance, the opposite of tangible assets, and can not be touched or seen. Types of intangible assets would be considered as intellectual property, patents, licenses, grants, and secret formulas.  

Operating Assets

Operating assets refer to assets owned by a business for daily operations or to generate revenue through usage. Some examples of operating assets include but are not limited to inventories, patents, equipment, secret formulas, and licenses.

Non-operating Assets

Non-operating assets refer to assets that are not necessarily used for business activities but may still create profits in the future. Some examples of non-operating assets include vacant land, marketable securities, short-term investments, and long-term investments.

Definition of an asset 

As already discussed, the definition of an asset is too broad, and even when broken down into categories does not captivate the true potential. While patents are considered an intangible asset, with rights usually stored digitally, it is also vital operating asset for some businesses. 

Bitcoin is another example of an asset breaking barriers, considered an intangible asset, stored digitally. Bitcoin could also be referred to as a current asset, or liquid asset. 

Inventory is a current, tangible, operating asset. It can be one or all at the same time. This just goes to show there is no one definition of an asset or asset type, but it is rather up to how the investor chooses to use said asset. 

But it is important to remember that tangible assets can not be intangible assets. Current assets can not be fixed assets. And operating assets can not be non-operating assets. There may be some exceptions, but this is a general rule to remember. 

Assets vs liabilities

Whether you are working out an entrepreneur's net worth, or a company's value, liabilities play a massive role in the solvency of an individual, cooperation, or country. When you minus liabilities from assets, you can work out Fund Balance, also referred to as Net Assets or Equity.

In order to figure out a company's fund balance, you would need to evaluate its balance sheet. Viewing their balance sheet depends on whether the company is private or public, with public companies being legally required to provide their balance sheets in annual reports. 

To put it simply: Assets - Liabilities = Equity 

Understanding assets and their economic value

The definition of assets is limitless, even the sapphire necklace you inherited from your grandmother could be considered a current and tangible asset. The value of the necklace could be profited from immediately, or you could wait for a sapphire shortage to claim even more.

The basics of assets within personal and professional lives differ, and we hope through this article you could come to a greater understanding of the differences and similarities. 

Assets remain an item or resource that a person, business, or government can expect to generate a cash flow. Whether it be a fixed or current asset, the goal of acquiring assets is to eventually profit from them. Gold, Bitcoin, houses, cars, secret formulas, and patents are all classed as assets, rightfully so, as they have the ability to generate value in a cash equivalent. 

Now that you know more about assets, and the value they are supposed to hold, do your own research and find an asset that fits your investment needs and wants. 

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ICO is an abbreviation for Initial Coin Offering, a term coined supposedly in 2013 yet only gained popularity in 2017. ICOs were created as a method of raising funds for cryptocurrency projects in a crowdfunding manner. When people partake in an ICO, through funding it, they receive "shares" of that project in the form of cryptocurrency tokens.

This method is set up to help new projects find funding to build their project, platforms, or products. It's kind of similar to investing in a start-up in the hopes of a project becoming bigger and better through your investment contribution.

Mastercoin was the first ICO recorded back in 2013, raising a grand total of 5,120 BTC. Shortly after, Ethereum followed, and in 2014 raised roughly $18 million to build their project. There is clearly a great deal of success to be seen through ICOs, so let's see what all the fuss is about.

ICO vs IPO vs IEO

Let's look at IPOs, or initial public offerings, to learn more about where ICOs originated.

Similar to ICOs, IPOs were created as a way of gaining capital to better the businesses' infrastructures. While they are similar to a crowdfunding aspect,the primary distinction is in how investors are rewarded. IPOs will offer their investors shares, while ICOs offer digital currencies that can be used within their ecosystems or can be sold when the price increases.

Now that we understand how ICOs and IPOs work, let's discuss the differences when it comes to IEOs, or Initial Exchange Offerings. Again, this is another method used to raise funds for upcoming projects, but there are some key aspects that make IEOs different to IPOs and ICOs. While IEOs are also a crowdfunding method in the cryptocurrency industry, they use an exchange. Anyone can generally buy tokens from an ICO page, whereas IEOs use exchanges as the distribution mechanism.

In order to take part in an IEO, you must be a registered user of the exchange that the project is utilizing. While IEOs may be more transparent, they do push us towards a more centralized approach. There are also IDOs, Initial Dex Offering, Dex standing for decentralized exchange (increasing the data privacy aspect), but that's a topic for another day.

How they work

So now we know what ICOs are and how they differ from their counterparts, but now let's delve deeper into how ICOs actually work. As stated, ICOs are a way for cryptocurrency projects to raise money. When a project decides to launch an ICO it will generally underline the sale dates, the participation rules, and the buying process.

Usually, investors will need to choose currencies they are happy to accept in exchange for their tokens, such as Mastercoin accepting Bitcoin. There are some ICOs who will also accept fiat currencies as payment.

The projects' core purpose, its timeline, and how much money is needed to succeed should be released in their whitepaper. If the project does not raise enough money to meet the minimum funds needed, the money should be returned to those who contributed. This would classify the ICO as unsuccessful.

If the funding goal is met, the project will continue to pursue its original goals and contributors will be able to claim their tokens further along. Tokens will either be listed on notable exchanges later on or will be distributed using smart contract technology,This is something you should do more study on before contributing to an ICO.

Advantages and disadvantages

While ICOs have proven to be a massive benefit to project developers, there are some underlying issues and risks that may come into play. In order to give you the best chance of understanding ICOs we will need to cover all the pros and cons that come with ICOs. So let's see what you have to look out for:

Pros

        High potential profits

        Accessible to anyone (unlike IEOs)

        Money returned if unsuccessful (smart contacts)

        Transparency on fund usage (Blockchain)

        High liquidity

Cons

        No intrinsic value

        No legal guarantees

        Potential fraud

Frequently asked questions

Now that we have covered the basics, there are some additional questions the internet has and we thought we would take the time to answer them for you. These are the most frequently asked questions about ICOs, and while we have answered some here is a more TL;DR breakdown:

What does ICO mean?

ICO stands for Initial Coin Offering, a phrase coined by the cryptocurrency industry.

What is the purpose of an ICO?

ICO is a method used to raise funds for up and coming projects, think of it as an early investment phase.

How do I get an ICO?

That depends on the ICO you want to partake in, you will generally need to sign up to the ICO, deposit funds, and wait for the tokens to be distributed either through an exchange or smart contract. This differs depending on the projects' ICO parameters.

Is Bitcoin an ICO?

No, Bitcoin required no funding, tokens were mined and sold without the need for crowdfunding.

How many ICOs are there?

There is no definitive number out there but consensus shows that there have been roughly over 7,000 businesses that have attempted ICOs.

Are ICOs safe?

This is a tricky question and depends greatly on the individual project that is hosting an ICO, whether they are using smart contact technology, and how legitimate the team behind it is. ICOs can be safe, but they also carry risks, it is always best to do your own research before putting money in.

As there is no universal authority on ICOs there is certainly a lack of regulation in the space so be sure to do thorough research before parting ways with your money.

Closing Thoughts

That is all the essential information you need to grasp in order to better understand what an ICO is. From the textbook definition to its competitors, how it works, and everything in between. ICOs are popular for a reason, they offer a range of benefits to both projects and investors, but you should keep in mind that there is no benefit without risk.

While we can explain what an ICO is, we can not tell you whether to jump into an ICO. It's important to vet the project for yourself and see if it aligns with your interests, and more importantly if it has all the key components for a legitimate project and token.

While the world is increasingly accepting of ICOs from both businesses and retail investors standpoints, there are several alternatives available. We briefly discussed IEOs and IDOs, but more crowdfunding methods have flourished from the origins of ICOs, so be sure to explore those out too if you are interested in the matter. At the end of the day, we hope we helped you better understand what an ICO is.

The process of allocating your funds or capital involves putting your money into something with the aim of earning more money and generating profits. Financial strategies are sets of principles, rules, and approaches that an individual follows to manage their portfolio. A sound financial plan can help one achieve their monetary goals, control risk, and maximize returns.

In this article, we will provide a beginner's guide to financial strategies, including its definition, benefits, types, and key principles. We will also discuss various financial terms and jargon that a investor should know.

What are investment strategies? 

Investment strategies are plans of action that an investor follows to manage their investment portfolio. It involves selecting investments that align with their financial goals, risk tolerance, and time horizon. Good investment strategies takes into account market conditions, diversification, and risk management techniques. 

The primary goal of investment strategies is to help investors maximize their returns while minimizing potential losses. These strategies can be created by the investor themselves or by a financial advisor and used across varying markets, from the stock market to the crypto market.

The benefits of having an investment strategy

Having an investment strategy can help you achieve various financial goals, whether they be generating income, building wealth, or funding retirement. It also helps you manage risk, reduce potential losses, and maximize returns. Strong investment strategies consider each investor's specific investment objectives, time horizon, risk tolerance, and market conditions.

Various types of investment strategies

There are several types of investment strategies that investors can implement during the investing process depending on their unique circumstances (risk tolerance, capital, financial goals, etc.). From value investing to income investing, we cover the most popular investment strategies below.

Value investing

Value investing is a strategy that involves buying stocks that are undervalued compared to their intrinsic value. This approach seeks to identify companies that are trading on the stock market at a discount price and have strong fundamentals.

Growth investing

The growth investment strategy is one of the best investment strategies as it focuses on investing in companies with high growth potential, even if they are currently trading at a premium. This growth investing strategy is designed around identifying companies with strong earnings growth, innovative products, or dominant market positions. Growth stocks will typically encompass both mature and emerging companies.

Income investing

The income investing strategy focuses on generating regular income from investments, such as dividend stocks, bonds, or real estate investment trusts (REITs). Here the aim is to provide a steady stream of income for investors, especially those who are retired or seeking passive income.

Index investing

Index investing is also one of the more common investment strategies that seeks to replicate the performance of a particular market index, such as the S&P 500 or the NASDAQ. This approach offers investors broad exposure to the market at a low cost.

Momentum investing

Momentum investing is a strategy that involves buying stocks that have shown strong performance in the past and continue to outperform the market. The aim here is to capitalize on the trend of rising prices and momentum in the market.

Contrarian investing

Contrarian investing is a stock market focused strategy that involves buying stocks that are out of favor with the market or have fallen out of favor. This strategy centers around identifying companies that are undervalued by the market and have the potential for a turnaround.

Active investing 

Active investing is a strategy that involves actively managing a portfolio, often through the frequent buying and selling of assets. This strategy generates higher returns than passive investing but requires more time, research, and expertise.

The key principles of investment strategies

Regardless of which of the different investment strategies one chooses, here are some key principles that every investor should follow.

Set investment goals

Before you start investing, you should have clear investment goals and a plan to achieve them. Your investment goals should be specific, measurable, achievable, relevant, and time-bound.

Diversify your portfolio

Diversification is the process of spreading your investments across different asset classes, sectors, and regions. Diversification helps reduce risk by minimizing the impact of any single investment or market event on your portfolio.

Manage risk

Remember that all investments carry some level of risk, and it is important to manage risk to avoid potential losses. You should assess your risk tolerance and invest accordingly. You can also use risk management techniques, such as stop-loss orders, to limit your potential losses.

The long-term investment strategy

Investing is a long-term game, and you should be patient and disciplined in your investment approach. Playing the long game and investing in long term investments is more likely to deliver financial independence.

Control your emotions

Emotions can cloud your judgment and lead to irrational investment decisions. It is important to control your emotions and stick to your investment strategy, even during market downturns or volatility.

Focus on fundamentals

When selecting investments, it is crucial to focus on the fundamentals of the underlying companies or assets. This includes factors such as revenue growth, earnings, valuation, and competitive advantage.

Stay informed

The investment landscape is constantly changing so ensure that you stay informed about market trends, economic indicators, and company news. This can help you make more informed investment decisions and adjust your strategy as needed.

Investment terms that every investor should know

As a new investor, you may encounter various investment terms and jargon that can be confusing. Here are some of the most common investment terms and their definitions:

Stock: A stock represents ownership in a company and gives the holder a claim on a portion of its assets and earnings.

Bond: A bond is a debt security that represents a loan made by an investor to a borrower, typically a corporation or government.

Mutual funds: mutual funds are a type of investment vehicle that pools money from multiple investors to invest in a diversified portfolio of stocks, bonds, or other assets.

ETF: An ETF, or exchange-traded funds, tracks a particular market index and can be bought and sold on an exchange like a stock.

Asset allocation: Asset allocation is the process of dividing your portfolio among different asset classes, such as stocks, bonds, and cash, to achieve your investment goals and manage risk.

Market capitalization: Market capitalization refers to the total value of a company's outstanding shares of stock, calculated by multiplying the number of shares by the current market price.

Dividend: A dividend is a distribution of a portion of a company's earnings to its shareholders, typically paid out in cash or additional shares of stock.

Expense ratio: The expense ratio is the annual fee charged by a mutual fund or ETF to cover its operating expenses, expressed as a percentage of the fund's assets.

P/E ratio: The price-to-earnings ratio compares a company's current stock price to its earnings per share, indicating how much investors are willing to pay for each dollar of earnings.

Yield: Yield refers to the income generated by an investment, typically expressed as a percentage of its price or face value.

Market order: A market order is an instruction to buy or sell a security at the current market price, regardless of the price level.

Limit order: A limit order is an instruction to buy or sell a security at a specific price level or better.

Stop-loss order: A stop-loss order is an instruction to sell a security if its price falls below a specified level, designed to limit potential losses.

Bull market: A bull market is a period of rising stock prices and optimistic investor sentiment.

Bear market: A bear market is a period of declining stock prices and pessimistic investor sentiment.

Conclusion

Investing can be a complex and challenging endeavor, especially for those new to it. While understanding the different types of investment strategies, key principles, and terms is important, it can be extremely beneficial to consult a qualified financial advisor. An experienced financial advisor can provide personalized guidance to help you build an investment strategy tailored to your specific financial goals, risk tolerance, and life situation.

They can offer professional expertise in areas like asset allocation, portfolio diversification, tax optimization, and risk management. Working with a financial advisor takes the guesswork out of investing and can increase your chances of achieving your long-term financial objectives. Remember, investing is a journey, and having the right professional partner can make a significant difference in navigating that path successfully.

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