Traditional Business Meets Blockchain

KJ Magill
KJ Magill
Jul 16, 2018 · 3 min read
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In July of 2013, fundraising took on a new form: the Initial Coin Offering, or the ICO. It takes on different names today, such as Token Generation Event, Token Sale, and some others, but they are essentially the same process: a blockchain-based company pre-sells the assets of their upcoming blockchain in order to raise capital for their business. Unlike their counter-part IPOs, ICOs tend to focus more on public technology and less on private business. The story remains the same five years later. Although this model is revolutionary and empowering for developers and smaller tech companies, it also raises some important questions of the sustainability of projects built on this model, and what they even are to begin with.

Platform or Company?

All too commonly, ICOs promise to build out a specific platform with the funds raised, and then ask for millions of dollars to build said platform. This model was met with little resistance for the longest time. Cryptocurrency was viewed as a decentralized, almost autonomous, system that just needed a group of developers to spark its creation. In place of business plans, whitepapers were offered to explain the technical functions of blockchains, with no mention of a long-term business model or plans for financial independence.

Perhaps one can argue this model is appropriate for blockchain. Bitcoin certainly didn’t have or need a business model. It isn’t actually a business after all, and so is the case with many platforms. Yet, the line becomes blurred when blockchains are developed for certain industries, with teams forming corporations and taking on C-titles. It eventually becomes a clear mismatch when platforms are developed to compete with current businesses within an industry, yet still take the “decentralized platform” approach to their entire project. It isn’t hard to draw a connection between lackluster management and the high failure rate of ICOs, reaching nearly half of all ICOs in 2017.

Taking Responsibility

The Leios project is built upon the following principle: a business should operate like a business. This means having a proper corporate structure, business plan, revenue model, and platform that is part of a multi-facet system that is set up and maintained by the business entity behind the blockchain. Leios International, Inc is a U.S.-based corporation that is following all of the traditional executive and regulatory practices expected of a corporation. We are working with the best blockchain lawyers to ensure the token, and the project as a whole, is as regulatory compliant as we can make it.

Our goal is to create more than just a token or even a platform; we are developing a service for a global audience that runs on blockchain technology. Some may view blockchain and an active managing entity as opposites, but this thought process is limiting the possibilities of blockchain. Yes, it can create fully decentralized systems, but perhaps there is more value in a system that is decentralized where it needs to be — such as the handling of funds for Leios — but provides centralized support and guidance to its user-base.

It has been an inevitability that many ICOs fail due to their inability to manage the financial and business models of their project, if they even create them in the first place. In today’s market, the technical plan is only the first step to having a viable project. Leios believes that it is time to combine the time-tested traditional business model with the paradigm-shifting platforms that blockchain has introduced.

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