The unbiased approach to the upcoming ICOs for 2018
In spite of Bitcoin’s 53% slump, ICOs kicked off 2018 on a positive note, raising $447 million (the most since October) according to recent data from Coinist. In 2017, initial coin offerings took down venture capital funding, bringing in $3.8 billion. While cryptocurrencies react fast to news headlines, ICO fundraising is a more gradual, passive process. Founder of Coinist, Sterling Sweeney, argues that even though ICOs are driven by market sentiment, their leverage is their expanded time frame.
Why are ICOs gaining so much traction? One of the core benefits is that they make investing in startups available to everyone. Similar to crowdfunding, anyone holding a crypto wallet can participate in the creation of a potentially successful new venture or company. ICOs get access to the funds by setting their own terms and conditions, rather than be forced to adhere to venture capital funding regulations.
Launched in 2013, the Mastercoin ICO raised 5000 BTC throughout its 1-month fundraising period. Worth $500.000 at the time, the funds are now worth over $60 mln. Fast forward to 2017, we come across Filecoin that raised $135 mln in the first hour, followed by Bancor with $153 mln in the first 3 hours from launch.
Leaving aside the obvious benefits, the investment potential, the top-notch technology, and disruptive aspects, let’s just say that the future of the ICO is — at the very least — challenging. In the following lines, we’ll talk about the hype surrounding some of 2018’s most famous upcoming ICOs.
1. Zipper — the decentralized powerhouse in your smartphone
Ethereum-based mobile application Zipper claims that upon successful completion of its ICO, it will turn any smartphone into a Blockchain powerhouse. With $3 mln. already raised in its Pre-ICO phase, the Zipper mobile platform aims to make any Blockchain-based service easy to use for mainstream consumers.
In the first phase of the project’s development, Zipper will take the form of a crypto wallet. It will allow smartphone users to manage their crypto, digital identity and private keys easily and securely. In the second phase, it will provide access to fundamental Blockchain-based services like storage, messaging, and peer-to-peer financial services in an intuitive, streamlined way; much like Apple provides its services on iOS.
The core difference is that Zipper gives users full control of the data, transactions, and identity. No official ICO date has been released, although according to Zipper, the token sale is planned for March 2018.
2. Telegram — rumors of a $3 bln token valuation
With over 180 million users, encrypted message service Telegram, took the crypto world by storm on Jan. 9, when it announced its plans to launch probably the boldest project in ICO history. According to multiple reports, Telegram will develop its very own Blockchain — a Telegram open network (TON) — and a native token to power payments on its messaging app.
The launch has not yet been announced, although according to recent news Telegram already raised $850 million. The alleged “third-generation blockchain” will feature superior capabilities that go beyond both Bitcoin and Ethereum. Further discussion surrounding the ICO claims that founder of Telegram, Pavel Durov, plans to leverage the app’s 180 million users to kickstart the new vision, and push it into mainstream adoption.
Voices in the crypto community are talking about a pre-ICO sale valued at $500 mln, with a potential token valuation ranging between $3 bln and $5 bln. The demand could be influenced by Telegram’s reputation as a well-established messaging platform. But then again, there’s skepticism surrounding the company’s resources to pull off such a bold move.
Thus far, it seems that venture capital firms Benchmark, Kleiner Perkins Caufield & Byers and Sequoia Capital are planning to invest $20 mln each in the Telegram ICO (they haven’t confirmed the rumors are true).
3. Bankera — aims to build a decentralizing lending empire
Launched around the same time as Envion — in November of last year — Bankera aims to develop the next-gen type of digital bank powered by the Blockchain. The goal is to integrate both crypto and traditional-related banking operations in the hopes of becoming a one-stop-shop for everything related to financial services.
The company advertises three fundamental lines of service, including payment accounts (IBANs, foreign exchange rates, and debit cards, payment processing), loans & deposits, and investment potential (ETFs, crypto-funds). Since the ICO launch, the company raised close to $100 mln from 66,000+ contributors. On Jan. 25, the co-founders announced the purchase of an actual bank — the Pacific Private Bank of Vanuatu; a bank with a proven track record and over 20 years of experience in the financial sector.
According to Bankera, the acquisition is meant to provide their team with a working product and a strong client base that they can use as resource to ensure the project attains its target goals. Bankera’s ICO ends on February 28. The company has already 107 mln. EUR in its pre-ICO and 177 mln. EUR in the ICO thus far.
4. NEX — challenges the status quo of centralized exchanges
Although the nature of Blockchain technology is trustless and decentralized, there are risks involved with dealing with central party exchanges such as Bitfinex, Mt. Gox (RIP), Shapeshift, and others. Since nothing is 100% unhackable, several decentralized exchanges that run on smart contracts are currently under development. They’re perceived as being the future of crypto trading because they can provide better security to the end user in the absence of a sole central party running away with customer coins or funds.
The problem with decentralized exchanges (DEXs) is that complete security reduces transactional speed. EtherDelta, for example, provides a secure on-chain platform, but it’s cumbersome and slow. The upcoming NEON Exchange ICO, aims to build a bridge between off-chain trade matching, executing smart contracts and a global asset cross chain payment system. NEX’s mission and vision is to merge a centralized exchange’s performance with the security and trust features of a decentralized one.
The company comes out as a “platform for complex decentralized crypto trade & payment service creation”, with a token sale that has yet to be announced. According to the founders, the NEX token sale on NEO will begin in Q1 of 2018.
5. KodakOne — Enjoys 15 minutes of fame!
Kodak got its 15 minutes of fame earlier in January, when the company announced that it will partner with Wenn Digital to develop a “photo-centric cryptocurrency” meant to help agencies and photographers gain better control of their image rights management. Following the announcement, Kodak’s stocks went up 89%. Scheduled for Jan. 31, the Kodak ICO pledges to use Blockchain technology to develop the KODAKOne platform; which will work as “an encrypted digital ledger of rights ownership for photographers to register both new and archived work for them to license on the platform.”
KODAK’s official press release on its upcoming ICO leaves plenty of room for interpretation. Rumor has it that the KodakCoin token will most likely be based on Ethereum, although at this point uncertainty regarding the ICO’s details abounds. The company argues that the open sale will only be available to accredited investors from the US, Canada, and other selected countries; and that the ICO will adhere to SEC (US Securities and Exchange Commission) guidelines.
What the future holds for ICOs
As we move forward into 2018, it’s safe to say that the future of ICOs looks promising, to say the least. Up until now, we’ve seen ICO fundraising being done by early-stage startups. As technology advances and the crypto world matures, chances are more well-known companies might jump on the ICO bandwagon.
There will be loss, riot, regulation, and plenty of rumors and assumptions made in the next couple of months. But we also anticipate a clean-up in the ICO scenario as investors grow and mature together with their investment decisions. In 2018, aspiring founders will have to abide by the three core principles of an ICO to have a shot at success: proper staff, rock-solid concept & execution, and a killer board of investors.
