ICOs See Another Evolution As CasperLabs and BitMax.io Conduct The First-Ever Exchange Validator Offering (“EVO”)
Can an Exchange Validator Offering (EVO) Bring Fairness to the Token Sale and Push the Crypto Whale to Extinction?
ICOs or ‘initial coin offerings’ were the fundraising avenue of choice for cryptocurrency and or blockchain technology startup projects and those that claimed they were one or both of the previously mentioned in 2017 and most of 2018. ICO’s were a pretty efficient and effective path to funding for DAPP developers launching new developments. The ICO avenue to a quick buck — massive amounts in many cases — also opened the door to a tremendous amount of fraudulent activity. Projects could launch with little more than a nicely designed website, a decent white-paper, and a good story and they could raise money, lots and lots of money.
Potential token holders and investors became seasoned Google and Linkedin sleuths trying to ascertain the legitimacy of a project, regulators came flooding in, and Crypto Winter hit wiping out a lot of these projects but not before many people lost tremendous amounts of money.
Initial Exchange Offerings — IEOs
As the name suggests, an IEO or Initial Exchange Offering is a token sale offered on a cryptocurrency exchange.
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Benefits of running an IEO include:
Trust — The exchange vets every project as their reputation is at stake.
Security — Already having strong security structure in place, the exchange takes the responsibility of the crowd sale security and KYC & AML process
Guaranteed Token Listing — A big part of running an ICO was getting the project’s token listed on an exchange after the token sale ran its course. This added an additional level of uncertainty for token holders and is a considerable expense for the token issuers which the IEO solves.
Lower Marketing Budgets — Marketing an ICO can be incredibly costly and time-consuming. Exchanges have a direct marketing audience through the users on their platform. Binance, the world’s largest cryptocurrency exchange and first to launch an IEO platform, has a built-in target market with 15,000,000+ users.
Binance’s IEO Launchpad raised $7.2 million in 18 minutes with BitTorrent’s token sale, and Fetch.AI raised $6 million in 22 seconds.
IEOs — Not All Sunshine and Lollypops
An IEO doesn’t solve 100% of the issues surrounding an ICO. What was great amongst the crypto community in the early stages of ICOs was that anyone could take part in them. They omitted the middlemen, and at that time sidestepped regulation, the opportunity for the ‘Average Crypto Joe’ to own a few tokens of a buzz-worthy project was possible.
As regulation started to take hold, the more viable projects started to gravitate to private sales with bigger investor pools foregoing the idea of a public offering altogether. Telegram, whose token sale was hugely anticipated in the crypto community, raised a total of $1.7 billion, all privately.
In simple terms, Crypto Whales or Whales are individuals or groups that control a large amount of a specific token. Recently the analysis company Clover published a study on the inequality of wealth distribution in Bitcoin, Ethereum, Litecoin, and various ERC20 projects. Their study found that currently, Litecoin had the largest inequality of wealth distribution and that Bitcoin was the most decentralized.
Whales have the ability to influence markets in the direction they prefer hurting the underlying values of a public blockchain of democracy and decentralization.
Can an Exchange Validator Offering (EVO) Keep the Crypto Whale at Bay and Make A Token Sale More Widely Available?
CasperLabs, founded in 2018, is a decentralized blockchain and smart contracting platform that scales for real-world usage and simplifies experiences for developers and end-users. To date, CasperLabs has had no token offerings having all funding conducted via a standard Series A equity financing. The decision not to sell tokens was based on ensuring open access to the underlying system.
While CasperLabs had significant interest from institutional investors to participate in the EVO, the team insisted on providing open access to all interested parties, at the early stages with equal terms. The partnership with global innovative digital asset trading platform BitMax.io opens the sale opportunity to a worldwide user base.
BitMax.io With its relentless focus on transparency, reliability, and quality of execution and client services will execute and provide support, and CasperLabs will be the legal issuer. This partnership allows for hundreds of thousands of small token purchasers with fair access to the project’s EVO at the earliest possible opportunity and the most favorable token prices. All EVO participants will be part of the founding stake on the Genesis Block of the CasperLabs network and an integral part of the network launch and initial security.
“This is a notable announcement in the evolution of Blockchain Ecosystems and the inevitable transition from vulnerable and inherently unjust centralized human interaction to trustless and just decentralized interaction,” said Randy McGuire, Liquid Ledgers CEO, about the collaboration between CasperLabs and Bitmax.io. “CasperLabs has designed a superior ‘Correct by Construction’ protocol that can also overlay security to ‘proof of stake’ & ‘proof of work’ protocols.’ It is based on First Principles that includes mathematical proofs as well as custom solution governance. Ethereum’s Vitalik Buterin recently coined the acronym and phrase FFG (Friendly Finality Gadget) to indicate a complete, secure, live consensus with irreversibility and this is the capability that the CBC protocol represents. The CasperLabs protocol also has the advantage of forming consensus around the “Block’ regardless of the data structures within the Block as consensus focuses on the weightiest block.
Now that Casper Labs is partnering with BitMax’s robust global execution platform for public offering, this bodes well for a more egalitarian and transparent ownership and governance within the Decentralized Economy. CasperLabs is designing more complex systems with distributed ledger networks and ultimately, a truly sophisticated and decentralized way of interacting securely.”
**Nothing in this article is meant to be taken as investor advice. Investing in any cryptocurrency comes with a high amount of risk. Any investment decisions you are considering should be discussed with your financial advisor.**
In the current global liquidity crunch it’s not easy for any Average Joe to invest but this offering is a very positive step in the right direction.