Token 2049 in Hong Kong, Day 1: Decentralize this!
Authors: Ilia Stechkin, Jevgenis Vainsteins
What to keep in mind when evaluating the token? — from the investors’ perspective. What is the reason to support blockchain? — the social value of the technology. Community Matters: Blockchain is not only about the technology, that’s about the adoption.
“Whoever did that thing to you-know-who, that good friend of mine, they’re trying to do that to me now, and I’m having a lot of feelings about that. And I’m… and I’m trying to get some… some…” The last word in this quote from the “Analyze this” should be “profit”. So here we are to attract more people to ET4 token generation event.
Asia is an essential checkpoint of our roadshow. We are starting business activity in this region from selling tickets to the Katy Perry’s concert at the Singapore Indoor Stadium on April 8th. That’s why we need to clarify local context. Let’s dive deeper in the agenda of the first day of the biggest blockchain community event in the region — Token 2049 conference in Hong Kong.
In us we trust
The first day started with the motivational speech by Brian Kelly known as the founder of BKCM, an investment firm focused on digital currencies. He also appears regularly on CNBC. It is by no means surprising that he started with the case of US Elections and the scandal with Cambridge Analytica and the crash of Facebook’s capitalization. John Harris (The Guardian) wrote: “Even if Facebook has since changed its rules to stop third-party apps gaining access to data from people’s friends, all this still goes back to something that remains absolutely fundamental to the company.” That means that super centralization of personal data is destroying human and civil liberties.
The blockchain seems to be the way to protect traditional values. In our previous blog post we mentioned that the meaning of the term “value” or “asset” is changing significantly. For example, your medical data could possibly be much more valuable than your money if you needed to save your life. Now we can see that your personal data in general (or your “digital DNA” as it called by Evgeniy Chereshnev from biolink.tech) is an asset and can be used for political influence even more effectively than fiat, if you know what we mean. According to Evgeniy, it is “made up of our choices, habits and patterns and the traces they leave in the digital world. Whether we are aware of it or not, our digital DNA is a powerful tool that can be used to understand our psychology and, in the wrong hands, could leave us vulnerable to targeting by advertisers and worse”. So decentralization feeds social request.
The main idea of Brian’s speech was: give the value back to us and let us choose what to consume and whom to follow. His prediction was that in 2049 Facebook and Google will be disrupted. Hm-m-m… Looking at the stock market data we can assume that this could possibly happen earlier, especially to Facebook. Probably this is the true cause of blocking ICOs’ ads by Facebook, Google and even Twitter. Decentralized web is not the technology they are interested simply because of their business model. Mr. Kelly ended the speech with three inspiring statements: 1) that’s up to all of us to educate people about what the blockchain technology is; 2) that’s up to us to build products that people want, the rules that people are ready to follow. 3) In us we trust!
Centralization vs Institutionalization
But what does it mean — “us”? “We” need some self-definition. Also “we” as a community need the program, the roadmap of the development of the blockchain platform not to muddle along. That’s why Jehan Chu, co-founder and managing partner at Kenetic Capital said that institutionalization is not an invective. He also mentioned that blockchain is not only about the technology, that’s about the adoption. He believes that community matters. People’s everyday life, and business, and needs are not about cryptocurrency or technology. Products based on the blockchain should have clear use cases. That was also an important point discussed at the panel dedicated for the future of venture capital.
In the VCs shoes
As you probably remember from the very first blog post of this series Tim Draper repented in Dallas that venture capitalists provide bad service at a high cost as well as insurance companies, healthcare and even the State as a social institution. Experts in Germany agree: ICOs are now disrupting venture capital. But still a lot of founders are raising money from VCs even during the ICO. How the blockchain-based project could rise significant money from VCs? Is there the list of criteria to match?
David Chang, managing partner at MindWorks Ventures was the most conservative speaker at the panel. He said: we love crypto space but we are limited by the traditional VC spending model. The idea of traditional venture capital is to bring traditional investment security procedures to the crypto space. So they need to check if the team of the project is strong enough. Strong teams mean that they already have experience in the field they want to conquer. The main difference between tokenization and traditional VC investments is the procedure itself. The question is: does the project really needs the token, what happen with the project without tokenization. The second question is if it should be security or utility token.
Then Jehan Chu, co-founder and managing partner at Kenetic Capital who moderated the session, asked panelists: When you are evaluating the token what are the key factors you are paying attention to?
We especially want to note the answer from Jason Fang, managing partner at Sora Ventures. He said they are mostly focused on the community. They are partnering with existing foundations to support projects they are growing from the community perspective.
Lessons learned
What venture capital is looking for before saying “yes” or “no”?
- Honestly, VCs are looking at the business model, at the token economics, how much value of the company is based on the token and what would happen had the token been omitted from the model.
- Also they are looking at the team traction use cases.
- They investigate your background to check if your reputation is sort of a guarantee for their investments.
- If there is an operation freeze, that means that founders are not able to sell their tokens at least for three years, that would increase the level of VCs’ confidence.
- Big investors are very pragmatic people, so they are looking for special conditions at the presale stage.
- They will check your roadmap: the discipline helps to attract money.
What is the dream project of the venture capitalist?
- It is build for shared economics;
- It is manageable: investors should be able to control the first stage of the development to protect themselves from the situation when the founder is raising money and doing nothing with the product;
- It is community-oriented: the more people you are able to attract, the more money you are able to raise;
- It should be the project with MVP or even better if it has some success story before the TGE — nobody wants to invest in the project from day one;
- Better if you are using decentralized infrastructure.
Seems like ET4 is a great candidate for huge venture investments, because our project matches all demands! Join our community to share our success!
References
- Harris J. The Cambridge Analytica saga is a scandal of Facebook’s own making https://www.theguardian.com/commentisfree/2018/mar/21/cambridge-analytica-facebook-data-users-profit
- Stechkin I., Vainsteins J. Crypto Assets Conference: enterprise domain vs public blockchain https://medium.com/@Eticket4_ICO/crypto-assets-conference-enterprise-domain-vs-public-blockchain-441c2e2ff3bd
- Stechkin I. Bitcoin SuperConference Diary. Day 1. Tim Draper: pied piper of Hamelin https://medium.com/@Eticket4_ICO/bitcoin-superconference-diary-day-1-470b40cf4473
- Official web page of Token2049 Conference https://www.token2049.com/schedule
- Chereshnev E. Owning your digital DNA. TED Archive https://www.youtube.com/watch?v=VGXR3XI8UmA
