Ignite’s Dual Token “Segregation” Strategy
Why we are doing it, how it works and what it means for you…
Before we begin, we need to clear one thing up:
IGNITE FULLY INTENDS, AND HAS ALWAYS INTENDED, TO HAVE AN EXCHANGE-LISTED, TRADEABLE TOKEN. Good, that’s that out of the way…
Back in the dim, distant and murky past of Ignite’s development (about 6 months ago!), we took the decision to make it so that the IGNT token would not be tradeable on exchanges — surely suicide when trying to raise capital via a token generation event, right?!?!?! Not quite…
The decision we took was one of pragmatism, regulatory compliance, commercial and operational advantage and, if we do say so ourselves, pretty darn clever all in all!
During Ignite’s crowdsale, willing participants will be able to purchase IGNT tokens, these being necessary to access the Ignite RATINGS platform and avail oneself of all the various benefits that entails, or may entail in the future (more on that later). As described in greater detail in the Ignite White Paper the IGNT token acts as a “proof of membership” and “proof of stake” within the Ignite ecosystem — it identifies you as a member of the Ignite HIVE and it rewards you for participating in the Ignite RATINGS ratings process. This token is purposefully designed to be non-tradeable which, among other things, allows us to push the Ignite platform out to the world without emerging regulatory pressures which might otherwise affect the token itself also having a knock-on effect on the project timeline. We live in uncertain regulatory times and this approach permits us to plan for the unknown that is impending global regulation by separating out, as much as possible, those aspects of the token that might require Ignite to introduce additional compliance measures, such as identity verification. All of this is of clear benefit to our members and contributors.
In creating Ignite, we are obviously hoping that every single IGNT token purchased will be forever deployed on the platform, but to believe that this will be the case would be incredibly naive. We recognise that Ignite’s users require the ability to liquidate their holdings and, additionally, that Ignite requires a way to acquire new users and, with a capped supply, realistically this should be via the secondary market. Accordingly, we will be creating a second token — tentatively named “IGNITEX” (we’ll use that for now…) — which will be listed on exchanges, will be tradeable, but will not permit the holder to interact with the Ignite RATINGS platform (other than to repurchase IGNT), and will not confer any additional benefit on the holder. IGNT and IGNITEX will be pegged to each other and readily interchangeable, one for the other. IGNITEX will be made available to coincide with our first exchange listing and is not dependant on a full platform roll-out.
Token Supplies, Market Caps and Pricing Strategies…
The creation and deployment of a segregated token strategy allows us to address another concern which, somewhat surprisingly, seems to be prevalent among potential contributors and which we did not anticipate being an issue in the slightest — that being the perception that the IGNT token is “too expensive”. This stems from the fact that the Ignite project has been pegged to ETH since its value was circa $240 and, as such, has seen the “price” per IGNT climb over the last six months to $6–7 per IGNT (0.00667 ETH) at the current rate as at the time of writing, give or take. In response to these rises, and to preserve the tokenomics of the project, Ignite has repeatedly slashed its maximum initial circulating supply: from 60,000,000 to 40,000,000; from 40,000,000 to 25,000,000; from 25,000,000 to 20,000,000; from 20,000,000 to 15,000,000; to where we are today…10,000,000 IGNT. However, the perception that the per unit price of IGNT is “too high” persists, despite there being limited supply, no minimum purchase amount and 18 beautifully-crafted decimal places for people to play with…funnily enough, even some exchanges prefer more fractionally-priced tokens as, for purely psychological reasons, they tend to attract greater volumes of trading activity. Who knew?!
IGNITEX will allow us to address these perceptions and concerns by introducing a factoring element into the exchange rate between IGNT and IGNITEX which, although not part of the underlying reason for creating IGNITEX at all, is a welcome spin-off from the segregation strategy. We have not locked down this rate yet, but all things being considered, and having taken on board the views of our community, we believe that a factor of 100x should be sufficient. So…
1 IGNT = 100 IGNITEX
1 ETH = 149.925 IGNT = 14,992.5 IGNITEX
1 IGNT = $6.667 (at an ETH/USD exchange rate of $1,000)
1 IGNITEX = $0.06667
Being an IGNT holder entitles you to participate in the ratings process and benefit from the rewards generated; it is also intended to provide access to additional benefits over time, such as preferential “early access” pricing for pre-ICO projects, introductory and/or preferential rates for partner exchanges, access to exclusive tools and features (including Ignite’s own smart-routed trading suite), the Ignite debit card, exclusive HIVE-member loyalty promotions etc.
Being an IGNITEX holder entitles you to: 1) sell IGNITEX on an exchange; or 2) use it to purchase IGNT, thus gaining full access to the Ignite ecosystem, and the benefits that come with it.
Discussions with exchanges for the listing of IGNITEX remain ongoing and subject to duties of confidentiality.
And that, as they say, is that. Should anyone have any queries regarding our token segregation strategy, please feel free to join our Telegram Group (if not already a member), and ask your question there. Alternatively, please email firstname.lastname@example.org.
Shameless plug to end with: Ignite is currently offering a 10% discount on purchases of IGNT made before 18:00 UTC on 29 January 2018. The token sale contribution address can be found on the Ignite website.