During CryptoBlockCon, on the 25th of October in London, On Yavin, CEO of CoinIntelligence asked a number of questions about whether or not STOs are the future of Blockchain. Here are the responses given by Hadley Barrett, CEO of ReMoneta:
Do you think that the ICO model, as it stands today, is relevant at all?
The old ICO model is dead as long as there is no easy money from speculation in BitCoin, Ether and similar cryptocurrencies. Why? There is a well-known quote, “easy come, easy go” and that is exactly what we have seen during the peak of speculation in 2017. Some people received money by doing very little and also spent that money quickly, some of it on ICOs.
At the same time, the market has matured a lot. As more professional investors start to look at the market, they have different criteria for investing. This is the traditional model. They look for real businesses, real cashflows, great, experienced teams and solid models, rather than blue-sky ideas. This benefits the market. It means we will have a lot more successful businesses instead of the 90%? failure rate I have seen quoted — there is a reason the traditional model has worked for so many years. In addition, regulation is increasing, scammers are being cracked down on and dodgy deals being investigated. Easy-money investors have a lost a lot of their easy money and so they are more cautious. Altogether, the businesses out there will become stronger because of it.
At the same time it is a bit sad in one way. We have many regulated markets, many restrictions and limits on what, where and when we can do things. The ICO market is not very large at all compared to the wider economy and so its impact is minimal. Therefore, why not have one totally unregulated market where anything goes? Caveat emptor — let the buyer beware. One crazy market where anyone can do what they want. People cannot always be so tightly restricted. In my view, over-regulation does not align well with human nature and that is an expanding fault-line in our society. The ICO market has shown us there is demand for minimal regulation. We just need to be sure there is a warning label, so people know this is what they are getting into.
2. In the current state of the market, who are the winners and who are the losers?
The winners are definitely the professionals. Serious companies with a real business model, cashflow and a great team. These companies will always be funded.
Losers are teams with blue-sky ideas, less than 5 years real world experience, scammers, existing zombie companies (companies who raised last year and have seen the value of BTC, ETH and so on tumble leaving not enough money for their development) and overpriced service companies. I expect we will see prices of services reduce tenfold because ICO pricing has been unreasonable.
3. Are STOs just a new hype or are they here to stay?
They are here to stay as long as there is a financial benefit to them. That means they need to have a disrupting effect, be that lower costs/ new income streams or deregulation.
There is little point in most STOs which are just funds on the blockchain. The liquidity of existing traditional exchanges is much better, more structured and there is a huge range of financial instruments available.
So, the exchanges and products need to be cheaper, simpler or something unique. To take the case of ReMoneta, one of our products is a currency backed by 100% land. We have worked out a particular structure where, under current regulations in Europe, it is not a fund or security (lower regulation meaning lower cost) and it provides added value enhancing income — for instance a potential for a higher earning than traditional structures through community mining, micropayments down to 0.01c, the ability to switch into many different tokens or traditional currency and to be used to buy goods and services, among other cost saving and income enhancing features.
Banging “blockchain” onto a fund that did not sell in the traditional market is unlikely to be a successful long term strategy. However, products such as ReMoneta and similar products, with features that cannot be replicated in the traditional market have long term value.
In summary, there are big changes taking place in the blockchain and ICO market and generally at ReMoneta, we feel they will lead to a much better and more mature market.
ReMoneta is a strongly capitalised ReFinTech company based in the EU which combines Real Estate (RE), Finance (Fin) and Technology (Tech). Visit ReMoneta.com for more information.
