Ever since Binance announced it was opening up its Launchpad program, other exchanges have been scrambling to develop their own initial exchange offering [IEO] platforms. During the first few months of 2019, Huobi has started up its Huobi Prime service, OKEx has launched the OK Jumpstart program, and KuCoin now offers its Spotlight initiative.
One of the latest exchanges to join the party is BitForex, which announced earlier in April that it would be launching its own premium project accelerator program called Turbo.
The first project, Unification [UND] ended its sale on April 12, having sold out its hard cap of 8 million tokens in an impressive one minute and 53 seconds.
The increasing prevalence of IEOs is hardly surprising. Token sales through initial coin offerings [ICOs] started to decline towards the second half of 2018. Regulatory clampdowns from the US SEC and the exposure of high profile scams such as Bitconnect and Centra meant the ICO was no longer an easy or reliable means of crowdfunding a new blockchain project.
Therefore, along with the security token offering [STO], the IEO represents the next stage in the evolution of token sales.
How Does an IEO Work?
An IEO works differently to an ICO or an STO, which both solicit direct investment by selling tokens via their own website. In an IEO, the project works with a crypto exchange which will sell the tokens on behalf of the project.
It has some similarities with an ICO in that the tokens are sold for a fixed period, after which the project uses the invested funds to go away and develop its product. However, the IEO offers several additional benefits to the project, exchange, and investors.
The project can tap into the marketing capabilities and existing user base of the crypto exchange. Partnering with big name exchanges such as Binance or Bitforex also lends credibility and reputation to the project and helps to navigate the regulatory and KYC minefield of a token sale. Even more alluring is the opportunity of avoiding VC firms taking a controlling stake in the company.
From the exchange perspective, the IEO is an opportunity to offer new tokens not available on other exchanges, earning additional fees. An investor can buy into a token with a greater assurance of liquidity, as its being sold to a broader pool of smaller investors. Moreover, the exchange guarantees to list the token once it’s live, providing a better chance of ongoing liquidity.
Due to more exchanges getting in on the action, there’s now a broad range of IEO tokens and platforms from which to choose. Here are a few that are either ongoing or upcoming, which are worth a second look.
Blockchain continues to face a trilemma between scalability, security, and decentralization, meaning developers often have to abandon one of these elements to achieve the other two.
For example, Ethereum is secure and decentralized, but slow. On the other hand, EOS is often criticized for its lack of decentralization as it’s dependent on just 21 block producers. MultiVac is developing its own blockchain which aims to overcome the trilemma.
MultiVac uses a sharding protocol, breaking the blockchain down into smaller pieces, so no one node needs to process the entire weight of the chain. Where MultiVac differs from other sharding protocols is that it doesn’t just shard the blockchain itself, but all transmission, storage and account processing.
It’s a highly ambitious project, but MultiVac has employed a multi-disciplinary team with a diverse background in successful tech companies including Google, Microsoft, and Alibaba. The project has already established partnerships with blockchain investment firms including Arrington Capital and Signum Capital.
MultiVac opened its IEO on KuCoin Spotlight on April 3rd and is currently ongoing.
Evedo is an end-to-end blockchain solution for unifying the event management market. The current market is fragmented, with different players including event organizers, venue managers, service providers, and ticket buyers all using different channels to access what they need.
The project estimates that the global market is worth around $850 billion. Evedo sees an opportunity to capitalize on this value by introducing one platform which provides both B2B and B2C services to industry participants.
With Evedo, an event manager will be able to browse venues, performers, or speakers, solicit services such as catering, security, or sound and light technicians and find event sponsors. In the B2C marketplace, the event can sell tickets directly to consumers.
The platform will run on Ethereum, and all interactions will be transacted in Evedo’s ERC-20 token, with the ticker TPT. Underlying smart contracts will govern the exchange of services and payments, with all transactions recorded on the Ethereum blockchain.
Evedo has already developed an alpha version for interested users to try out the look and feel of the platform. The Evedo IEO opened on Bitforex on April 16 and is launching a second round IEO as well on p2pb2b on May 5th.
The WHO estimates that almost one in ten people each year fall ill due to food contamination, resulting in over 400,000 deaths annually. While large companies such as Walmart are using private blockchains to address the challenges of supply chain and food provenance, Farm2Kitchen aims to bring a similar solution to the general public. It will tap into a food traceability market forecast to exceed $20 billion in 2023.
Developed on the Hyperledger platform, Farm2Kitchen will be an online marketplace that will provide traceability of food products from farm to fork. The project is taking aim at the Asian markets, where smallholders operate around 72 percent of agricultural land.
The Farm2Kitchen marketplace will allow foodservice operators to place orders directly with farmers, with each step of the transport and logistics process securely recorded on the blockchain.
Farm2Kitchen is currently running its IEO on ExMarkets until June 20th.
After the Wild West, the Next Generation of Crypto Companies are Advancing the Industry
Back in the ICO boom of late 2017 and 2018, it was too easy for anyone to enter the crypto space with little more than a white paper and a sales pitch. However, once their ICO was over and the spending sprees started, even the most well-intentioned projects struggled to sustain themselves. A quick browse through Deadcoins shows that many simply burned through their funds and ultimately never brought a product to market.
Now, the crypto market is starting to grow up. The community has been burned by too much hype around useless niche products too many times. Therefore, the pressure is on tech startups to demonstrate they have solid business acumen together with a sustainable plan for the future.
As more and more Mainnets launch, there is also increasing recognition of the importance of interoperability. A standalone product is like a lone tree in a lightning storm, prone to being hit.
Interoperability means becoming an integral part of a thriving blockchain-based ecosystem. Those who understand the importance of developing this ecosystem are the ones who stand the best chance of surviving in the long term.
Here’s an overview of three companies with a strong focus on playing the long game and driving towards an interoperable ecosystem.
A significant factor that led to the explosion of ICOs in 2017 and 2018 was the existence of the ERC-20 token standard. Now, regulatory clampdowns mean ICO’s will be treated as securities. Therefore, many startups are turning to the security token offering (STO) as a means of crowdfunding.
Polymath is aiming to replicate the success of ERC-20 through its own offering, the ST-20 token standard. This provides a compliant means for founders to fund their visions, and as it stands, over 100 tokens have already launched using Polymath. It’s a complete turnkey solution for running an STO without falling foul of the regulators.
At the recent Consensus 2019 event in New York City, Polymath confirmed that it will develop a separate blockchain for regulation-compliant tokens with Ethereum co-founder and Cardano developer Charles Hoskinson.
Polymath also operates a treasury. The company has locked up 75 million of its own tokens for five years. This treasury approach provides a long-term, sustainable option for funding future endeavors.
ChangeNOW offers non-custodial crypto exchange services without limits or registration required. Using ChangeNOW, a user can trade in their chosen cryptos in just five easy steps with no hassle. They simply select their tokens for selling and buying, and the interface determines the best available rate at the time. The user receives the address for sending funds and provides their own address for receipt. It’s that simple.
ChangeNOW is working hard on establishing many partnerships across the crypto landscape. It has relationships with exchanges including Binance, Bittrex, and Bitfinex, and wallet providers such as Ledger, Trezor, and Atomic Wallet. The company recently received the endorsement of Binance CEO Changpeng Zhao (CZ) for it’s NOW token to become one of the first listed on the newly launched Binance DEX.
The company has also been rolling out a series of innovative features for its users. It now offers a zero-fee public Lightning node, which enables instant payments and cross-chain atomic swaps. It also has a service called NOWpayments, which allows vendors to start accepting cryptocurrency payments through a native integration to their platform, or through a widget.
For startups which want to swap out their ICO tokens to ones issued on their own main net, ChangeNOW also offers a dedicated token migration service. Finally, in keeping with the growing trend of exchanges operating a loyalty program, ChangeNOW will also be opening up its VIP Lounge, which provides premium benefits to members.
LiquidApps exists to remove barriers to dApp adoption, both for users and developers. It’s achieving this through the operation of its DAPP Network, the backbone of which is the Dapp Service Provider (DSP) and the DAPP token.
A DSP can be any individual or entity which meets the requirement for becoming an EOS block producer. A DSP can then sell services over the DAPP Network in exchange for DAPP tokens.
LiquidApps is rolling out services thick and fast. The first was vRAM, which is compatible with EOS RAM but without the limitations and consequent supply-and-demand challenges of the latter. Next up was vAccounts, which allows developers to offer a dApp-specific account for new users, removing the requirement for users to have to buy RAM to open an EOS account.
Now the company is offering a host of new services, which includes the potential for inter-blockchain communication with its new ChainOracle XIBC service. It allows developers to bring in sources of external information (for example, from other blockchains or even the internet) to their dApp, which has previously been challenging due to the deterministic requirements of a blockchain. Using the LiquidApps solution, external data can be verified by a DSP in such a way as to retain the integrity of the network and root out bad actors.
By enabling communication between blockchains in this way, LiquidApps is aiding the development of an interoperable ecosystem. In turn, the company is carving out a role for itself in that ecosystem long into the future.
These three companies are leading the way in taking a long-term view alongside working to build a flourishing blockchain ecosystem. These developments are reliable indicators that the days of the crypto wild west are coming to an end, and the sector is now entering the next stage of maturity. This growth can only work for the benefit of all participants.
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