How tokens pricing works

[pelangi1]

Hi all, I have been following cryptocurrency only since last November. I think I understand the basic on how trading works.

I am interested to know about the high level process (especially in terms of supply and pricing) in creating a new token.

When someone created a new token (eg. Ethereum token) we specify the total supply of the tokens and the initial price. Then people who bought them (usually through an ICO) will send ETH to smart contract address and get some tokens. My questions:

• Who will own those fund (ETH) sent to smart contract address? The cryptocurrency creator?
• Am I right that the price won't change until all tokens bought because "there is no shortage of supply" until all tokens bought
• Can we release only a certain number of tokens every year, for example if the total supply is 5 million tokens and we release only 1 million token a year then the supply will last for at least 5 years. How's that affect the price?

Very newbie questions? Sorry ... just want to get my head around it. Thank you.

[RandCrypto]

I will try answer your question to the best of my ability

1. The creators of the ICO and ETH contract will receive the ETH and is free to be used for development
2. The price of the coin will not change till after the ICO is over, when it starts getting traded the last traded price what someone is willing to pay for it at that moment
3. Yes, a contract can be written to release any % of coins at any interval. As there is a lower supply, price fluctuation will be greater and if there is demand, the higher the price should be

[pelangi1]

Thank you for your response. So it's legit for the coin creator to get all the fund. I thought it would smell scam but then who else owns it.

[ramoo1988]

The ICO developers gets the ETH fund (or any other coins used during sale). The value of the token which you possess shall depend upon the outcome of the project. If its really a good project then people will show interest in investing. If its not then no takers for the coin. Nowadays most of the investors invest on ICOs for flip sale. Meaning, the investors sell it on the first day of exchange listing with 2x or more profit.

[breadginger56]

I don't know if I am out of this topic but I really want to know if these ICO's tokens are exchanged at ETH currency only or there are other cryptocurrency exchanges for these tokens? I just want to know because I want to support some ICOs out there progressing in the world of cryptocurrency.