ONE BILLION DOLLARS
Exploring the first billion dollar ICO
The growing popularity of the digital token industry indicates that a billion dollar ICO (at time of sale — some have subsequently grown to >$1BN with rising crypto prices) may happen in 2018. In 2017, initial coin offerings achieved a cumulative funding of over $4 billion. During this time Tezos became the world’s first digital token to raise in excess of $200 million and is currently the largest ICO raise to date — indeed the raise, 65,703 Bitcoins, and 361,122 Eth, would today be valued at almost $1.7BN. The highest ICO title was previously held by Bancor, which managed to raise around $150 million. Tezos’ blockchain vision was criticized by some notable personalities in the crypto community. Despite its successful ICO, Tezos faced a host of issues with its platform and according to a Reuters report in October 2016, was at risk of total collapse.
Of course the path to the first billion dollar ICO raises the issue of what an ICO is really for: “It really begs the question,” Cryptonomos CEO, Oleg Poskotin reflects, “is an ICO about launching a product and creating its blockchain environment, or is it about raising a lot of money for the founders of a company?”
Telegram, the popular internet messaging app, is aiming to be the first ICO to crack the billion dollar mark at time of raise, and is reputedly chasing two billion dollars. According to leaked documents, the company’s push onto the blockchain will be with a platform named the Telegram Open Network, or TON. While not drastically different from other blockchain applications, TON brings some interesting features to the table by pairing a widely used instant messaging app with a native digital currency. Telegram was developed and released by brothers Pavel and Nikolai Durov in August 2013, who were also responsible for the popular Russian social network, VK. Since its public launch, it has grown to accommodate more than 100 million monthly active users.
Despite a leaked white paper, neither Telegram nor the Durov brothers have made any statement confirming an ICO. However, based off the leaked white paper and the unofficial corroboration of several sources close to the company, it may not be long before the Telegram Open Network is officially announced. It is speculated that the company not only wishes to challenge industry incumbents like Bitcoin, but also take on behemoths like Visa and MasterCard. A billion dollar raise may indeed provide the firepower to take on companies of this size and inertia, but it remains to be seen how the funds might be distributed.
For token buyers massive raises don’t necessarily reflect the most exciting opportunities, and smaller raises sometimes achieve a far higher multiple once they hit exchanges, as discussed in our recent post.
In any event it’s clear that the billion dollar milestone will garner significant public attention and interest. Given the extraordinarily exciting token prospects entering the crypto space in 2018, this may well be the year for it — particularly if state-backed cryptos come to the fore. Indeed the Venezuelan Government’s planned “el Petro” — an oil-backed, state-backed (or at least, “failed state-backed”) crypto with a pre-sale starting in February has just announced a hardcap of $5BN.
