Are ICOs Going to Become Obsolete?
In a word, no. But they are changing
Simple Token has been described as the WIX of tokens[1], making ICOs an accessible tool for anyone with an idea. Just as creating a front-end easy, intuitive way of building a website without being fluent in programming democratised the internet… Simple Token allows any contender with an ecosystem they can ‘tokenise’ to do so using Simple Tokens as collateral; and to implement the complex blockchain protocol to do this securely using its OpenST Protocol, saving them potentially years of building the infrastructure themselves.
The potential applications for this platform are as infinite as the big blue sea. The practical applications with a sound business model are somewhat fewer in number. Anyone can use the platform to develop and manage their own micro-economy. The question is whether their app protocol has enough inherent, material value, to make this process worthwhile.
SweatCoin is a clear example of an application with an inherent value proposition, and which has developed its own micro-economy pre-ICO by using sweatcoins to incentivise exercise. It’s a pretty basic function, as fitness monitors go; Sweatcoin rewards you with one coin for every 1000 steps. You can earn Sweatcoin either through walking or running, and trade them with other protocol users at a mutually agreed price.
They can be exchanged for vouchers toward such items as Vivobarefoot running shoes, Kymira infra-red clothing and fitness classes from Wonderush or BOOMCycle. Sweatcoin founders were in pre-ICO discussions with an advisory firm which prefers to remain nameless, but for now have not revealed if they will go down this route. They told the community,
“I recommend saving your coins and/or spending them on affordable offers in anticipation for what the future holds….
The Sweatcoin team could make an announcement at any moment that causes a value to be determined and set. As a personal investor in Sweatcoin, I sure hope this is the case! I’ll be updating this guide as soon as any sort of announcement is made.”[2]
Because the app is not on the blockchain and does not use the technology, an ICO would be purely a capital-raising exercise. And this would need to be carefully managed to prevent all those currently holding Sweatcoin from experiencing any undesirable volatility its value.
But the success of Sweatcoin, with its branded tokens which have a value based on their usage within the app and demand for them in the community, could be easily replicated on the new platform with far greater ease by a new social network. Digital assets accrue value as demand for them increases, and where they can be linked to tangible services and goods.
Bridging the Blockchain Gap
With Simple Token blockchain makes another leap towards mainstream uptake. The need for secure, decentralised data storage in today’s internet is obvious. You do not effectively own your personal information; you have little or no control over which third parties it is shared with. And while the new European data laws are going to enable individuals to request what information companies store on them, this does not protect data centres and servers from penetration by third parties.
The case for blockchain-based distributed ledger technology, vs centralised data control, is obvious and most major banks and also financial payments and messaging provider SWIFT, have found ways to incorporate private blockchains into their system processes. But there is a latent distrust of the explosion in ICOs, with many calling a Bitcoin ‘bubble’ that is about to burst. What if, instead, the technology and the fundraising structure simply ‘burst’ onto the mainstream market?
In an interview on Ian Balina’s ‘Hacking the System’, which examines ICOs and crypto investments, CEO? Jason Goldberg explained the mass appeal of the concept. Their aim, he stated, was to help consumer companies “bridge the gap into blockchain technology; to avoid the ‘dental surgery’ of doing their own ICO,” and all the associated costs of meeting legal and regulatory obligations, as well as building and trouble-shooting the technology.
While there are no set, defined standards yet for conducting an ICO, $500,000 is a conservative estimate for what it would cost from concept to completion, incorporating product development and advisory, platform and technology development, legal and compliance advisory, whitepaper writing and design… Then you have to sell the product through the appropriate channels, forking out for heavy digital marketing and PR, smart contract and ICO coin development; sales and community management; bounty management campaign; listing fees and posting fees.
Finally, you have to put the proper safeguards in place, covering distribution and treasury management, perhaps escrow and custodial advisory, and full security audits. Credit for the register of ICO cost factors goes to Cahill Puil,, Advisor & Marketing Consultant to Crypto Startups.
A New Paradigm
The Simple Token auction was hugely over-subscribed. Drawn out over 18 days, and replete with buyer incentives as well as mechanisms to offset volatility in Ether, the exchange currency, it achieved 189% of its sale target. In total, 6871 unique purchasers from 130 countries purchased 259,627,030.90 Simple Tokens (including bonuses) for a total 46,828 ETH.
Jason Goldberg’s vision is that any company with a valid value proposition will be able to “make their own dynamic eco-system, their own economy.” At least seven companies had already signed up as partners and early users of the technology pre-ICO. Two serve as indicators of the wide usage potential and the significant commercial stake already placed in it.
FloShip is a relatively new contender in the courier and logistics space, which has built relationships with online retailers and brands like Shopify, WooCommerce, Magento, Amazon and JD, to name a few. Its app is integrated into the buying process, but it plans to expand its range of offerings using tokenisation to deliver customer incentives and rewards; and to utilise blockchain to improve its service, presumably through implementing accurate and unalterable parcel tracking using DLT.
The company also claims to be the no. 1 international crowdfunding fulfilment provider by packages shipped, whereby any perks offered by FloShip can be tacked on seamlessly to perks on Kickstarter and Indiegogo.
Steve Suh, Floship Co-founder, stated publicly that they “will be engaging with our webshop partners and courier partners to explore both tokenization and blockchain tech to simplify transactions among stakeholders in a transparent, fast and more efficient way.”
The second is virtual reality venture VidiVR, which has as its mission statement the reinvention of social content, such that the community is fully in control of how it is used. Tokenisation would be used to reward content sharing and assistance in 3D content creation, and holding tokens could endow users with power over the app’s developmental direction too.
“We believe that the advertising industrial complex should be left in Web 2.0, along with the algorithmically promoted divisiveness that makes for good business with that model. When we learned about Simple Token, we immediately recognized the opportunity to make meaningful steps towards ushering in a new era for the business of social,” said Brian Herrera, CEO.
Look, its flagship app, launches on the itunes app store in December, though to participate community members will also need a VR viewer. Both VR viewer and Hoot 3D camera are available on www.vidivr.world/shop.
The company stated that “Early next year, Look will be compatible across all mobile VR platforms and the Hoot 3D Camera will be available for purchase for only $169. Throughout 2018, Look will expand compatibility to other types of 3D VR cameras to empower more people to make worldwide friendships by capturing and sharing experiences with each-other.”
Footnotes
[1] https://hackernoon.com/simpletoken-the-full-service-token-foundry-faf7bcd44c0e
“Think of it as the WIX or Shopify of tokens. They make it simple and easy to look like a pro even if you’re just an old school business that is trying to find ways to incorporate token mechanics into your business. They add a ton of functionality and services on top of ERC20 that make it a no-brainer for folks who can’t afford a full development team focused on deploying code in Solidity.” Gil Penchina, serial ICO investor
[2] http://sweatcoinguide.com/faq/sweatcoin-ico-initial-coin-offering/
