ICO Alternatives: How ADN Helps Crypto Funding Evolve
ICO alternatives that thrive today are STO and IEO. With the emergence of ADN, however, there will come a third option — the ICO Wallet.
If you followed the crypto scene, you would notice the evolution. The crypto marketplace has become more mature than it was at least 2 years ago, experts claim. We now have a couple of crypto-integrating browser platforms such as Brave and Opera. We also have social media sites that integrate crypto such as Steem.it and soon, Facebook.
We have also noted major overhauls in the ICO space. Due to the number of untoward events in 2017, many of us have learned our lessons and evolved in our approach to crypto crowdfunding. Now, we have security token offerings (STOs) and initial exchange offerings (IEOs). For our part, we at ADN have crafted another solution to help crypto’s trademark crowdfunding effort to have another viable option for it to continue evolving.
Every approach mentioned above has its advantages and disadvantages, which we will talk about in this blog. We encourage you to weigh in and decide which platform you’d support.
Security Token Offerings
As the name suggests, STOs are a crowdfunding method wherein the issuer is selling its investors its tokenized securities. In financial terms, securities are assets which take the form of bonds, stocks, notes, etc. As in the case with stocks, investors can earn interests when the company they have invested in makes profits and increases its net worth.
Of course, STOs need to be compliant to financial authorities as the tokens offered here are tied to an asset that has a fiat valuation.
In a nutshell, security tokens are a means to extend the reach of securities to the cryptocurrency world.
Compared to ICO, STOs are deemed more secure by some because the tokens are tied to a real-world asset. There will also be lesser incidences of activities that the ICO has been notorious for because these need to be compliant with financial regulators.
However, STOs are a relatively new plane that many have not discovered fully yet. It does not provide a clear option for utility tokens. Blockchain technology has yet to reach its full potential, and it is for that very reason that many decentralized applications (DApps) and other blockchain-based initiatives are being created for. Furthermore, its success relies in part on government intervention. This is a problem in itself for crypto enthusiasts because it tampers with the ideal of decentralization.
Initial Exchange Offerings
IEOs are the more popular alternative to the traditional ICOs. In this case, cryptocurrency exchanges facilitate the crowdfunding, allowing the ICO project proponents to relax and receive the funding they need to sustain their operations. Crypto exchanges market the token to the investors and provide an automatic listing on their exchange once the event has concluded.
Before approving the token sale, exchanges would first do a thorough background check on the project to make sure of its legitimacy. They also do a KYC/AML check on all participants for compliance.
As payment for their troubles, crypto exchanges require the token issuers to pay a certain amount as a listing fee, as well as a percentage of the assets sold during the entire crowdfunding duration.
IEO participants can entrust their money on the exchanges because these have solidified their credibility through the years. They can also be sure that the tokens that they purchase will have a better chance of stabilizing in price because they are automatically listed on the exchange shortly after the conclusion of the token sale.
However, not all crowdfunding options are perfect. IEOs may suffer a couple of setbacks since they are facilitated by crypto exchanges, which are, more often than not, centralized. As their governance is centralized, so is the security. If their security has been breached — which has happened in several exchanges in the past — then funds that were stored in them can and will be stolen. Moreover, they have to do the KYC and AML processes themselves, thereby limiting the sale to those who will only submit to their policies.
The ADN ICO Wallet
We at ADN believe in the sincerity of the above-mentioned solutions. However, we believe that one of the most important advantages of cryptocurrencies and blockchain technology is the option for decentralization. We have allowed governments and financial institutions to protect our best interests, and many of us came away disappointed. That is why we are offering a decentralized solution that will protect the interests of our investors and ensure the quality of token sales held on our platform.
One of our best features is the ICO Wallet, which comes in the form of an app that can be accessed by any ADN user. In the case of an IEO, it is the exchange that decides whether a token sale would ensue. With the ICO Wallet, it is the ICO participants who will vote after each stage whether it will proceed to the next one or not.
So far, the blockchain world has proven its detractors that ICO is not dead. It is most definitely alive and thriving in the form of STO, IEO, and the ADN ICO Wallet. We continue to innovate and we provide more viable options in the future to ensure that every crypto user will have the options to choose which crowdfunding platform works best for them.
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