Changing the way capital is raised for blockchain startups: ICO Mission Control
In an earlier article about Smoky Rooms & ICOs, I attempted to articulate how the ICO process of today is broken. In Part II of this series, I am sharing how QUOINE is putting our clients and innovation at the center of all that we do in our approach to ICOs.
At QUOINE, I helped to manage our QASH ICO which we did in November 2017 raising more than 100mm USD. From this experience, we learned what it takes to do an ICO.
I was lucky enough to participate in two ICOs in 2017:
- Initial Coin Offering with QUOINE (November)
- Initial Child Offering with my daughter (December)
Based on our learnings of doing our own ICO in early 2018 QUOINE has embarked on an ambitious path replacing the proverbial “smoky room” of today’s ICOs and making it redundant. Our focus is on a more efficient and transparent technology-based approach that requires all participants (token issuers and token buyers) to have been KYC cleared from the onset.
For Investors, ICO platform offers the following:
1. Softcap — we are introducing softcap protections for investors. What does this mean? We work with the project team and 3rd party financial analysts who specialize in “tokenomics” to determine an appropriate minimum threshold of capital for required for the project have a reasonable chance to be viable.
When the ICO is run, if the soft cap target is not met, we will refund investor contributions within 1 minute of the conclusion of the ICO. No fees, no delays, and greatly reduced risk of committing capital to a project that is not sufficiently funded.
While the concept of a soft cap is not new — QUOINE is greatly increasing the speed and reducing the counterparty risk of participating in an ICO with an ICO and softcaps executed via our exchange platform. Over time this additional security and scale will enhance the process of capital raise, ensuring only the best projects are funded and those that are funded by our clients have a reasonable chance of success.
2. FX hedging — we are using our exchange technology to price a token offering in multiple currencies and adjust prices as FX rates change. This assures certainty of value for each token that is sold during the ICO. Our proprietary FX hedging mechanisms reduce the volatility inherent in the crypto-based fundraising thus allowing project teams to better plan their budget and investment plans. For investors, this means that as the value of your crypto holding increase, your purchasing power for investing in ICOs will also increase.
3. Instant settlement — When participating via our ICO Market, there is no risk of hacking or lost tokens. Tokens are settled to investor’s exchange wallet in real time. The hacking of ICOs has become a multi-million dollar industry. And the typical ICO requires that people set-up a wallet such as MyEtherWallet (MEW). Have you ever tried using MEW? It is excruciatingly difficult and the average person should not need to have knowledge of call functions and modify source code in order to receive a token purchased in an ICO:
This is how QUOINE approaches receiving tokens in an ICO:
- Buy the Token in our ICO Market
- See the tokens reflected in your exchange wallet instantly
The syndicates also present a welcome target from hackers who are able to get to their wallets.
By participating in an ICO on QUOINE’s platform token buyers have eliminated the transactional risk and simplified the process. Tokens are settled to a GUI wallet on the exchange instantly. No coding or asking the question, “Where are my tokens?” required. Simple and fast.
4. Flexible funding method — via our ICO platform, contributors can contribute in 4 funding currencies (BTC, BCH, ETH, QASH). Soon we will be adding support for other cryptos and funding via fiat currency with the rollout of our groundbreaking Liquid exchange later this year. QUOINE’s ICO platform will be an important fiat onramp to ICO participation for global investors.
5. Locking of bonus tokens — We have all grown weary of tokens that list on an exchange only to do what I call the “Burj Khalifa” maneuver. This is market manipulation pure and simple and can often be observed on the larger cryptocurrency exchanges based in China.
Upon listing, the token price is run up by market manipulators early in the ICO, and then Private Sale investors who usually purchase the tokens at prices not available to the average investor sell their tokens at a quick profit. The price of the token then quickly drops leaving the average investor deep in the red.
At QUOINE we are trying to change this dynamic by implementing a locking period for the bonus portion of the ICO investment. The bonus can be locked until a period of time selected by the Token Issuer thus promoting price stability upon listing on the exchange.
6. Access to independent research from 3rd parties — From this August QUOINE will be offering our client’s access to in-depth research from independent research houses from around the world. QUOINE will pay for this research ourselves and make it available to investors. This research will be unbiased — the investment advisors will have no stake in the project they are commissioned to do a research on. We are also looking to introduce crowd-sourced research on ICOs that will be impervious to manipulation. Finally, QUOINE has partnered with an AI-based firm that will use machine learning algorithms to evaluate the viability of an ICO.
Unlike the current generation of web sites that begin with “ICO xxx” not every project will have a 5-star rating. And that is OK. Inflated ratings don’t really do anyone good other than the analyst/shill that was paid to give the phony rating.
An ICO Journey — if it was easy someone else would have done it by now
At QUOINE, many in our team left previous careers in the banking and finance industry in order to have an opportunity to move the needle at the intersection of finance and blockchain. With our ICO Mission Control platform, we are here to change the way capital is raised for blockchain projects via ICOs. We are replacing outdated modes with a sustainable framework that puts our clients at the center of all that we do. While other cryptocurrency exchanges offer Lamborghinis and trips to Monte Carlo, QUOINE is focusing on due diligence and value creation for all of our stakeholders.
We are, “first over the wall” in this regard and we know there are risks. The established players in this broken ecosystem won’t necessarily like what we are doing. We are threatening the way things have been done to this point. But we believe it is our mission to introduce governance, investor protections, and transparency to the ICO process. We are committed to improving industry practices and serving our clients. At QUOINE, we welcome your participation as we embark on this wonderful journey.
For more information on QUOINE’s ICO platform, please check out this podcast: ICO Mission Control Framework.
