Highlights From The MEDIA Protocol And BlockPulse AMA — Part 1
On Tuesday 31st July, James Tabor, CEO of MEDIA Protocol, and Marien Irzykiewicz, CEO of BlockPulse, sat down for an AMA session conducted over Telegram.
The purpose of this AMA session was to open the floor to each project’s respective communities, to ask any and all questions regarding MEDIA Protocol and BlockPulse, blockchain, and ICOs.
About BlockPulse
The BlockPulse project started towards the end of 2017, in Paris, and was founded by a group of people coming from banking, software, financial law and blockchain engineering. They have since taken a leadership role in France and worked with more than 12 ICOs, focusing on ICO audits through research reports.
BlockPulse wants to help people and companies join the blockchain revolution by democratising Initial Coin Offerings. Performing Due Diligence reports for ICOs enables BlockPulse to provide a standardised, external view of the project for prospective participants.
In Part One
Topics covered include: the changes we’re seeing in new projects, ICO vetting and marketing, the French crypto space and legislative environment, and the ongoing debates over Utility vs. Security tokens in new offerings.
What sort of developments have you seen in the market through 2018? How different are the projects we see now, as opposed to the ones coming through last year?
Marien Irzykiewicz, BlockPulse
One of the main differences from 2017 is the number of projects, and the difficulty to raise money even for good projects, due to many scams and the disappointment of investors post-ICO.
We see that the criteria for a successful ICO today are different, beginning with the necessity of having a product, being backed by a fund on equity, in addition to having hype.
More and more projects will have to propose revenue-sharing options to attract investors as the success of utility tokens is decreasing
Utility vs. Security seems to be an overarching theme. Is this not simply replacing shares with tokens that perform the same function? Is the main outcome here that projects don’t have to work with blockchain?
Marien Irzykiewicz, BlockPulse
More and more projects raise money through ICOs without a real blockchain application. Utility tokens will survive, but I believe in a mix of utility and security features, with more profit-sharing rights.
For now, most ICOs issue utility tokens for legal matters. For example, NapoleonX, a French ICO I joined last year, had some revenue-sharing for trading bots’ performance fees, and a utility feature for trading signals and other rights. (Priority access to new funds, votes, etc.)
Tokenisation is wider than just having a disrupting application of the blockchain. Liquefaction of the economy will see many traditional businesses opt for an STO instead of IPO for example. On the other hand there is still room for innovative projects on the blockchain as pure utility tokens. The market is just evolving and diversifying.
What do you think an STO offers an IPO in terms of advantage?
Marien Irzykiewicz, BlockPulse
An STO can mix utility and revenue-sharing. It’s much more programmable and flexible than traditional securities.
How are French blockchain companies perceived outside France? How is the crypto space in France evolving?
Marien Irzykiewicz, BlockPulse
From a regulatory point of view, AMF, Autorité des Marchés Financiers, is one of the most influential European regulators. People continue to see France as a highly taxable country and think new crypto friendly countries like Estonia, Malta, Gibraltar, and Lichtenstein are better options than France. A French visa on an ICO will certainly be better perceived by investors than these countries, in my opinion. The French regulator’s main goal is to protect investors. It is true we have a complex tax framework in France. However, a lot subvention from government entities like BPI — Banque Publique d’Investissement — and several government tax incentives for startups exist.
The crypto space is evolving fast in France, like in many other countries. We do not have a financial culture in France (traditional financial markets) like the US and UK. Crypto is still a niche here. The Rapport Landau intend to create an attractive framework for ICO projects to come to France, from a regulatory, tax, and accounting point of view.
How engaged is the crypto space with the legislative bodies, as opposed to just the regulatory side?
Marien Irzykiewicz, BlockPulse
We are working closely with the AFGC, the main French crypto lobby, to propose an adequate legal and tax framework to Parliament. Regulators are part of it and it’s surprisingly efficient so far, as all the actors are working on each other’s side to issue an attractive and protective legal framework.
To compare, AMF is screened and followed on some points by ESMA to publish European recommendations.
What are some simple signs that suggest a project is trustworthy?
Marien Irzykiewicz, BlockPulse
Business model, tokenomics, and a competent, dedicated team are the most scrutinised parts. ICOs didn’t reinvent venture investing. Nevertheless, novice ICO investors should not be impressed with the background of founders. It is common to see scam ICOs with talented people on board holding highly recognised diplomas.
From the other side, you can see bad practices are not necessarily red flags in terms of project quality. Nowadays, most ICOs have growth hacking and bad marketing practices to inflate the community and hype around their project. There’s a split between actual projects and the marketing approach they take. An ICO is a commercial approach and needs to be sexy. Marketing is here for that.
Marketing is becoming very expensive for ICOs, how has the approach evolved since last year? Do you think that highly visible advertising is a wise move?
Marien Irzykiewicz, BlockPulse
Previously you could often start your presale with almost no marketing budget and then leverage the money raised to pay mass marketing for the ICOs. Last year, I was the CMO of NapoleonX, one of the first French ICOs. We raised €1M in November without marketing budget and €12M in February with nearly €300k. Now, most ICOs would fail to raise in pre-sale without a budget. You need at least $200k to start and most ICOs spend more than 10% of their total funds raised on marketing.
Another point, the media has become more selective. They now have the choice to refuse a lot of ICO marketing money. There are many more ICOs than good quality media, so it makes sense.
As the GAFA has taken an aggressive position on ICOs, projects need to be smarter with their marketing. For example, research papers by a third party is considered as information, not promotion, and is more tolerated than ICO promotion.
Research, and listing sites have had some “mixed” reviews in the past months to say the least. How does an ICO investor vet the quality of the ratings / research that they are looking at?
Marien Irzykiewicz, BlockPulse
Most ICO ratings are paid for. The problem is to never expose this conflict of interest. Investors are looking for an external point of view. Research and ratings are here to provide complementary information on the projects, but each investor needs to make his own opinion on the project. At BlockPulse we have decided not to rate projects, to be more objective.
Do you feel that the blockchain space is helping create more opportunity, or are we waiting for specific regulation to come in?
Marien Irzykiewicz, BlockPulse
It will certainly change the job market and create new opportunities. Most institutional actors are definitely waiting for regulation to walk into crypto.
I think that crypto space is still a white sheet and many opportunities are around. Still, regulation will provide more stability and scalability for mainstream businesses to get in.
When performing due diligence, how can you be sure the information is accurate?
Marien Irzykiewicz, BlockPulse
We perform different checks. For example, for legal analysis, we review all documentation (company incorporation, shares ownership, terms and conditions, legal opinion, if any). It is not rare to find inaccurate information like team, partnerships, early investors. It is by spending many hours and cross-checking information that we can be sure if information is accurate or not.
We are currently structuring more extensive due diligence reports with several actors (a top-tier equity research company and new blockchain research boutique).
What are the major issues of post ICO market?
Marien Irzykiewicz, BlockPulse
Getting listed on an exchange is the number one pain. In Q2 2018, only 204 raised more than $100,000 and only 61 were able to get listed on an exchange.
One of main goals of an ICO vs a traditional venture is the immediate liquidity. Most ICOs don’t have enough daily liquidity, and market-making solutions are not developed enough. Another issue is hedging, and cashing out the solution in a recognized bank. It can take time.
How do you see valuations panning out in the coming months / years?
Marien Irzykiewicz, BlockPulse
It will depend on several factors, micro and macro. Most ICOs suffer for not having a decent valuation model and their utility rights are not closely defined.
You mentioned before that many people have claimed to be a utility token in order to raise funds. What do you look for in a project to understand what status a project has e.g. security v utility?
Marien Irzykiewicz, BlockPulse
Profit sharing and governance rights are the main status. Even if many jurisdictions apply, we are looking for the most conservative ones. SEC is the jurisdiction most followed by crypto exchanges. Even Decentralised exchanges follow SEC rules, like IDEX who delisted many profit-sharing tokens last month.
Utility tokens need to have a real blockchain application and specific features. Projects who don’t assume to be a security for legal reasons, but do not provide any real utility, will fail.
In Part Two
The second part of this in-depth AMA with BlockPulse will look more closely at MEDIA Protocol and reward protocols, mass adoption, target markets, dApps, and the potential of open source. Join us for more information on all these crypto topics.
Read Crypto News And Announcements On CryptoCatnip And Earn Real MPT
Remember, users of MEDIA Protocol’s CryptoCatnip app can earn real MEDIA Tokens for interacting with the content they love. The CryptoCatnip reward bounty is still ongoing. Click on the link and follow the steps for the opportunity to earn real MPT up until the end of MEDIA Protocol’s TGE.
You can now also follow crypto project announcements on CryptoCatnip too.
For more information regarding MEDIA Protocol find us on our social channels below:
Website: www.mediaprotocol.org
Facebook: https://www.facebook.com/MEDIAProtocol
Twitter: https://twitter.com/MEDIA_Protocol
LinkedIn: https://www.linkedin.com/company/media-protocol/
Telegram: https://t.me/Media_Protocol_Community and https://t.me/MP_Announcements
Medium: https://medium.com/@mediaprotocolsm
YouTube: https://www.youtube.com/c/MEDIAProtocol
For more information about BlockPulse, here are their social channels too:
Website: www.blockpulse.eu
Twitter: https://twitter.com/Blockpulse_eu
LinkedIn: https://www.linkedin.com/company/blockpulse/
Medium: https://medium.com/@blockpulse
