mercredi 18 septembre 2019

The Changing Shape of Crypto Funding in 2019

The Changing Shape of Crypto Funding in 2019

2019 was meant to be the year of the IEO. Or was it the STO? Whatever the case, it’s had its share of both, with mixed results. While the number of successfully completed token sales and the number of IEO launchpads has increased significantly, secondary market demand has been underwhelming. As emerging projects study the performance of this year’s favored fundraising vehicles, they’re faced with a conundrum: stick with a tested formula, or eschew the three-letter models for something new.

Also read: Snowden: US Seizing My Book Revenue is ‘Good for Bitcoin’

The Jury’s Out on IEOs

It’s hard to know what to make of this year’s initial exchange offerings (IEOs). Compared to their forebears – the projects that ICO’d two years ago – IEOs are clearly better in certain respects. Greater transparency, as mandated by exchanges, has prevented exit scams and compelled projects to actually ship code and build stuff. Greater liquidity, aided by the guaranteed exchange listing that comes built into the IEO model, has also been an improvement. Crowdfunding projects are better off this year, too: with the rise of token creation platform Simple Ledger Protocol, startups have the option of launching token sales on Bitcoin Cash, providing an alternative to the ERC20 token standard and the rising network fees on Ethereum.

The Changing Shape of Crypto Funding in 2019

But what about the quality of the projects themselves? This year, IEOs have brought us a whole lot of smart contracting platforms, dapp scaling solutions, and crypto protocols, but there hasn’t been much originality on display. Where the ICO era birthed prediction markets from Augur, a global exchange in Binance and decentralized token trading from 0x, today we have Elrond and Emogi. It’s hard to shake the feeling that good ideas for tokenized projects are now at a premium.

The Changing Shape of Crypto Funding in 2019

In the STO space, great progress has been made this year – just not in terms of fundraising. Blockstack garnered headlines when it became the first STO to be granted Reg A+ status by the SEC, opening its sale up to the wider public. Other security token projects have had to exclude U.S investors, however, or go down the more restrictive Reg D route. The infrastructure supporting the security token space is improving at least, which should make things easier for the next wave of aspiring STOs. This week, for example, security token platform Harbor announced that it was tokenizing $100M of real estate funds. CEO Josh Stein has expressed the goal of evolving Harbor into “the Salesforce.com” of the security token industry.

Crypto projects currently raising capital have some tough decisions to make. Do they stick with the conventional IEO/STO formula, or do they twist and go for something different? News.Bitcoin.com spoke to four projects that have decided to roll the dice.

Roobee and Dreamr Take Different Routes

Investment platform Roobee is currently holding its IEO on Asian cryptocurrency exchange Liquid, which is best known for hosting Telegram’s sale. What’s different about Roobee’s IEO is that it’s not the project’s first: in June it successfully completed two token offerings on Bitforex and Exmo, raising around $5.5 million.

The Changing Shape of Crypto Funding in 2019

Artem Popov, co-founder of Roobee, told news.Bitcoin.com: “Fundraising in installments across multiple exchanges requires a lot more work, but we believe it’s time well spent. The ability to cultivate a community on each platform, with the goal of turning these people into smart investors on the Roobee platform, is invaluable. Raising in stages also enables us to meet key development milestones along the way, and to benefit from the goodwill this brings, which feeds into our IEO.”

Meanwhile, Dreamr, a social networking application geared towards entrepreneurs, is going for an IEO-STO hybrid and planning a Security Token Exchange Offering (STEO). The sale will be held on crypto exchange IDCM, with ordinary investors able to participate. Strategic advisory firm Pirate Capital, led by Joseph Bar-Katz, prepared the offering under Regulation S, which excludes U.S. residents from participating. Bar-Katz asserts that this provision “should allow for the DRMR Token to be soon available internationally.”

The Changing Shape of Crypto Funding in 2019

LiquidApps and Kleros Favor Smaller Raises

Because IEOs limit the amount that can be raised in a public sale, typically capping it around $2 million, projects that wish to disburse a greater proportion of tokens have to devise alternative means. For Liquidapps, a blockchain scaling startup and interoperability protocol, that’s meant holding an ongoing auction on its own site. The project, which provides low-cost vRAM for EOS developers, is conducting a 12-month raise which is reminiscent of EOS’ own year-long crowdsale. So far, it’s raised around $2.8 million, with tokens made available in timed cycles.

The Changing Shape of Crypto Funding in 2019

And then there’s decentralized justice protocol Kleros, which sold 16% of its PNK tokens to the public last year, with the rest earmarked for future sale, either OTC or via a milestone-based crowdsale. “In mid 2018 we concluded our IICO (Interactive Initial Coin Offering) which was initially proposed by Vitalik and Jason Teustch as a more egalitarian way to conduct a token offering,” explained Kleros Operations Manager Stuart James. He added:

At that time, we were seeing crazy gas fees being paid by whales to corner token sales (BAT being the most notable). With the Kleros IICO, would-be contributors had more fined-tuned control over how they wanted to handle the trade-off between the certainty with which they could participate in the sale and the certainty they had over the valuation determined.

The Changing Shape of Crypto Funding in 2019

Like Liquidapps, Kleros has kept busy this year, completing a successful trial of crowdsourced adjudication in action, and joining the burgeoning defi movement by providing its services to Market Protocol to settle price oracle disputes. Keeping busy in the months to come while building a community will be imperative for those crypto projects that have yet to finish raising funds. There are signs that investor interest in IEOs is waning, as exemplified by the diminishing demand for Binance Launchpad tokens.

The Changing Shape of Crypto Funding in 2019

The crowdsale is not going away any time soon, but the acronym and form it takes may change once again. With each new tokenized funding mechanism, there’s a window of opportunity for launching while interest is high. Catching that wave at just the right time calls for a combination of luck, intuition and innovation. If the project’s innovative and the token metrics are good, it should succeed, in theory, whatever shape its crowdsale may take.

What are your thoughts on IEOs – have they fulfilled investor expectations so far? Let us know in the comments section below.


Images courtesy of Shutterstock and ICO Analytics.


Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

The post The Changing Shape of Crypto Funding in 2019 appeared first on Bitcoin News.

Tiny Block Advocates Speak Up After Veriblock ‘Abuses’ Bitcoin’s Block Size

Litecoin will have succeeded when it doesn’t need Charlie Lee [INTERVIEW]

In the end, Charlie Lee says Litecoin will have succeeded when it doesn’t need him anymore. Here’s what this means for the Litecoin Foundation.

Litecoin’s origin story

In an exclusive interview with CryptoSlate, Charlie Lee shared the origin story behind Litecoin.

“Initially, I was just in it for fun,” he said about the coin’s creation. At the time, Lee was working at Google as a software engineer.

Lee positioned Litecoin as silver to Bitcoin’s gold. With faster block times and lower fees to facilitate cheap transactions, it complemented Bitcoin as a method for making cheap, fast payments. He doesn’t see this changing anytime soon, either:

“I positioned it to silver to Bitcoin’s gold when I first launched it. I think there’s always going to be space for Litecoin to thrive so I’m not worried about all these other coins coming into space. There’s always going to be tons and tons of coins. But I think Litecoin and Bitcoin will be really used as currency,” Lee said confidently.

Created in October 2011, Litecoin predates the vast majority of blockchain projects. And soon after its creation, Litecoin quickly grew into one of the largest cryptocurrencies by market capitalization. It maintained this title year after year, ranking as the fifth largest coin with a $5 billion market capitalization.

Meanwhile, as Litecoin became a pillar in cryptocurrency Lee’s relationship to the project also changed. “Now I feel responsible to shepherd Litecoin and also try to help Bitcoin,” Lee shared.

Background on the Litecoin Foundation

Founded in April 2017, the Litecoin Foundation aims to advance the development and adoption of LTC. The Singapore based non-profit was created to “help Litecoin in every way he can think of,” said Lee.

Unlike other crypto foundations like the NEO Foundation or the TRON Foundation—which funded themselves by retaining coins from their respective ICOs—the Litecoin Foundation went to the community to raise funds via donations and merchandise sales.

The Foundation gauges its success by the adoption it stimulates. Network hash rate, on-chain metrics, transactions, wallet accounts, and application downloads are all figures the Foundation watches closely.

Right now, aiding Litecoin adoption and running the Foundation are Lee’s full-time commitments.

FUD around Lee’s Litecoin holdings

In December 2017, near Litecoin’s all-time high, Charlie Lee sold his entire LTC holdings citing potential conflicts of interest given his influence over the coin’s price. The decision is a recurring point of criticism among investors.

People claim that Lee is no longer financially motivated to support Litecoin. And based on his comments, he’s not. Charlie Lee seems ideologically driven.

To date, Charlie Lee’s statements and actions have proven he is still fully invested in the project. In fact, Lee even left his position at Coinbase as director of engineering to work full-time on Litecoin.

Lee’s finances affirm his commitment. Charlie Lee’s donations account for 80 percent of the Foundation’s funding, according to an interview with CoinDesk. Based on recent financial statements from the non-profit this would amount to roughly $800,000.

Instead of making money, Lee seems more interested in fighting for the freedom of money.

Planning for decentralization

Despite Charlie Lee’s influence and power over Litecoin, his goal is for the community to outgrow his leadership.

“What I’d like to see with Litecoin is that it eventually it wouldn’t need me so in the end it’s a decentralized currency. Having a centralized figurehead is counterproductive. Because then, I become a central point of failure.”

That isn’t to say the project depends on Lee. Similar to other politically decentralized cryptocurrency projects like Ethereum and Bitcoin, Litecoin would “exist perfectly fine” if the Litecoin Foundation disappeared, he said. Nonetheless, his involvement is still a point of failure, he argues:

“If I get co-opted, or if I get attacked by government, for example, saying I have to put KYC into Litecoin or they’re going to lock me up, that’s just bad. There’s no good end result if that happens.”

Instead, Lee wants the community to grow to the point where Litecoin can thrive without him—in  a way that’s decentralized and resilient to regulation.

“I think over time I would need to step away. Start doing less, letting the community take over. And we have a great community for Litecoin. So I’m not really concerned about that at all.”

That isn’t to say Charlie Lee is stepping down anytime soon. “In the meantime, I think I do more good helping Litecoin along than harm.”

In a Cincinnatus-esque fashion, Lee wants to eventually step down from power. And when that happens, people can rest assured that Litecoin will have succeeded in helping the world adopt the “best form of money ever seen.”

The post Litecoin will have succeeded when it doesn’t need Charlie Lee [INTERVIEW] appeared first on CryptoSlate.

Taxation Isn’t Just Theft – It’s Bad for Crypto Adoption

Ethereum ProgPOW author uninvited from ETC Summit due to Craig Wright association

Kristy-Leigh Minehan, the creator of Ethereum’s progressive proof-of-work algorithm, was uninvited from ETC Summit. Bob Summerwill, the summit organizer for ETC Cooperative, said he withdrew Minehan’s invitation due to connections with Craig Wright and Calvin Ayre.

Connections to Craig Wright?

The Ethereum Classic Summit scheduled for Oct. 3 is now one speaker short. Kristy-Leigh Minehan, the current CTO of Core Scientific, has officially been uninvited from the summit by the event’s organizer due to her alleged involvement with some of the most controversial figures in crypto.

Bob Summerwill, the executive director at the Ethereum Classic Cooperative and community leader for the Ethereum Project, announced the news on Twitter, saying he was the one to uninvite Minehan. According to Summerwill, he decided to retract her invitation after learning about her “connections” to Craig Wright and Calvin Ayre.

In a blog post, Summerwill explained that blockchain company Core Scientific, where Minehan serves as a chief technology officer, acts as an advisor to Squire Mining, a publicly traded Canadian company. Calvin Ayre owns 45 percent of the company and lists both Craig Wright and Jimmy Nguyen as advisors. Summerwill believes the connections were too strong to ignore.

He also said that Kristy had also spoken on at least two events created by pro-BSV news outlet CoinGeek “implicitly promoting and validating them.”

“Craig Wright is a fraud, serial liar and perjurer, and Calvin Ayre is not much better. I cannot have the ETC Cooperative and the ETC Summit associated with such disreputable individuals and companies, so I chose to withdraw my invitation,” Summerwill explained in the post.

CryptoSlate reached out to Minehan about the matter. She had this to say:

“Core Scientific is a professional service provider. As long as our customers comply with U.S. law, pass mandatory KYC checks, uphold their contracts and pay their bills, they are allowed to use our services—the same as any other customer. As a company, we are agnostic to blockchain networks and political factions and believe everyone deserves the right to participate in our services.”

A push to remove ProgPOW from next Ethereum update

Minehan’s connections to Craig Wright and support for Bitcoin SV have pushed Summerwill to look deeper into her proposed algorithm updated to Ethereum. The progressive proof-of-work algorithm makes it more difficult to develop specialized ASICs for Ethereum and makes general purpose hardware (GPUs) more cost-effective at mining ETH.

However, after a discussion with Minehan on Discord, Summerwill decided to advocate against ProgPOW. The algorithm was partially created by a group of 40 individuals, in line with its open-source origins, with only a few of the members being publicly known.

Meanwhile, Minehan is adamant about maintaining the privacy of these open-source contributors:

“I will fight to the bitter end to protect people’s privacy. Ever had a situation where your life was in jeopardy because of your contributions? I have.”

Nevertheless, Summerwill argues that Minehan’s “lack of discernment about who she associates with,” that the IP risk of employing such code to Ethereum would be “unquantifiable.”

He then urged the Ethereum community to “strongly reconsider” whether it should proceed with implementing ProgPOW and called for stronger guarantees around the IP.

“ProgPOW has undergone audits for security and potential backdoor concerns, as well as hardware optimisations. It is a gentle tweak to Ethash to fulfil its proposed properties in the original yellow paper,” asserted Kristy-Leigh Minehan.

His personal opinion aside, Summerwill said that the algorithm has long been a divisive topic in the Ethereum community. In light of recent events, there is a risk of an Ethereum hard fork if ProgPOW is implemented.

The post Ethereum ProgPOW author uninvited from ETC Summit due to Craig Wright association appeared first on CryptoSlate.

Binance.US opens account deposits in preparation for trading, adds BNB

Bitcoin Cash Futures Expected to Open up US Market by Q1 2020

Bitcoin Cash Futures Expected to Open up US Market by Q1 2020

Futures contracts on bitcoin cash can be available at a CFTC-regulated exchange by the end of this year or the first quarter of 2020. This will allow institutional U.S. investors to trade on a derivative of the cryptocurrency and bring in more trading volume for BCH overall.

Also Read: HTC Adds Native Bitcoin Cash Support to Its Flagship Smartphone

Bitcoin.com Champions Bitcoin Cash Futures

Bitcoin.com is in discussions about listing a bitcoin cash (BCH) futures contract on a new exchange with approval from the U.S. Commodity Futures Trading Commission (CFTC). David Shin, the head of the exchange business at Bitcoin.com, expects the new instrument can reach the market by the end of the year, or the first quarter of 2020, and that it will be cash-settled on day one.

The goal of having a BCH futures contract on a CFTC-regulated venue is to open up the U.S. market so that more institutional traders can gain exposure to the cryptocurrency and thus generate higher trading volumes in total. Additionally, there is interest from some retail brokers in offering trading on such a regulated instrument, and Shin is also in talks with them about the possibility.

Bitcoin Cash Futures Expected to Open up US Market by Q1 2020

“We are in discussion with a US exchange that will shortly be CFTC approved to list a BCH futures contract to create greater demand for BCH and increase trading volumes,” Bitcoin.com CEO Stefan Rust explains. “There are two main reasons behind this. First, with BCH futures, institutions will be able to manage the exposure to market volatility better and therefore protect funds under management better, and hence allocate a larger portion of their funds to BCH. Second, with this product BCH is also accessing a new US financial services market through futures that is CFTC regulated. This is a massive market that’s new to BCH. Both of these drive up volumes which in turn drives up demand for BCH which will lead to an increase in market value. This is largely driven by futures volumes in the US market increasing demand and ultimately the value.”

Regulators Keep US Market Behind in Crypto Adoption

The Chicago Mercantile Exchange (CME Group) does offer financially-settled BTC futures contracts for U.S. investors. However, by global comparison, American regulators have made it very difficult for investors to access the global cryptocurrency market with ETFs and the same is true for derivatives. For example, a number of companies have been working hard to launch regulated physically-delivered bitcoin futures contracts in the U.S., but their efforts have so far been hampered by the CFTC.

Last month the CEO of Ledgerx, Paul Chou, had to retract the news that his company went live with bitcoin futures for retail trading after it received regulatory approval for swaps. Ledgerx launched its institutional trading platform back in 2017 and has been waiting ever since for the specific CFTC approval for the instrument. He also complained that the regulators were not doing their job and threatened to sue the CFTC for anti-competitive behavior and breach of duty.

Bitcoin Cash Futures Expected to Open up US Market by Q1 2020

Another trading platform recently approved by the CFTC for physically-delivered bitcoin futures is TD Ameritrade-backed Erisx. However, the most anticipated venue to enter the market is Bakkt, the digital assets subsidiary of New York Stock Exchange parent, Intercontinental Exchange (NYSE: ICE).

Back in 2018 ICE announced that the Bakkt Bitcoin Daily Futures Contract would start trading on Dec. 12, 2018. This has not happened, and the launch date has been pushed back again and again. The reason for this according to media reports is the necessity of compliance with cumbersome CFTC demands. If nothing changes again, Bakkt is now expected to bring physical delivery futures contracts to market participants in more than 30 countries by the end of 2019.

The International BCH Derivatives Market

Besides some of the biggest players in the traditional finance markets trying to enter the cryptocurrency derivatives business, we have also seen companies from the digital assets industry focus on filling the same niche. Among those crypto trading venues who started offering bitcoin cash derivatives to their traders we can list Bitmex, U.K. FCA-regulated Crypto Facilities, Hong Kong-based Coinflex and Huobi Derivative Market (Huobi DM). While these types of exchanges are a good option for experienced crypto traders to get into highly leveraged long and short positions on BCH, they don’t have the global brand power of being CFTC-regulated, which will serve as a major seal of approval for the cryptocurrency in the eyes of timid investors once they launch bitcoin cash futures.

Bitcoin Cash Futures Expected to Open up US Market by Q1 2020

Bitcoin.com has already been successful in making BCH instruments more accessible to traditional investors around the world. Amun AG, a Swiss company facilitating access to crypto asset investments, announced in July that it had listed the first exchange traded product (ETP) tracking the performance of bitcoin cash on Switzerland’s principal stock exchange. The Amun Bitcoin Cash ETP is a fully collateralized product that is denominated in U.S. dollars and has an annual investor fee of 2.5% that includes custody, insurance, and re-balancing fees. This crypto investment instrument was seeded with 25,000 BCH from Bitcoin.com Executive Chairman Roger Ver.

What do you think about the potential for CFTC-regulated bitcoin cash futures to open up the institutional U.S. market? Share your thoughts in the comments section below.


Images courtesy of Shutterstock.


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The post Bitcoin Cash Futures Expected to Open up US Market by Q1 2020 appeared first on Bitcoin News.