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ICO Vs IEO Vs STO— Understanding the Nuances in Tokenized Fund Raising

Fundraising is one of the most critical parts of the current economy. It is a known fact that most of the companies and startups in the world would have not been able to provide their Read more…

The post ICO Vs IEO Vs STO— Understanding the Nuances in Tokenized Fund Raising appeared first on ixBlog.

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Fundraising is one of the most critical parts of the current economy. It is a known fact that most of the companies and startups in the world would have not been able to provide their services or products if people didn’t invest in them. While raising sufficient capital was never an easy task, there were fewer options. Not to mention that the system was plagued with many inconsistencies and security issues. However, times have changed.

Today, technologies like blockchain have changed the entire landscape of fundraising. The novel technology not only gets rid off the third-parties from the scenario but also enhances transparency in transactions. The crypto space experienced a wave of change when the tokenized form of fundraising started gaining popularity. With time, other types of fundraising started evolving— ICOs, STOs and IEOs started attracting investors to a new world of crypto assets. Yet, which one of these fundraising techniques is the best? Let’s dig a little deeper.

What is Initial Coin Offering (ICO)?

According to a survey conducted by Statista, it has been found that the ICOs raised for the cryptocurrency industry was the largest among other industries such as business services, infrastructure, banking and investment. It amounted to a whopping $14.8 billion during November 2019. In fact, crowdfunding has adopted Initial Coin Offerings for the longest duration in the crypto world.

ICOs are still prevalent as they allow companies to raise capital for their succeeding projects by issuing of crypto tokens at a discounted rate. New investors prefer investing in ICOs because the process of setting up an ICO is comparatively easy. Anyone can launch an ICO if they have a reliable whitepaper for convincing investors who will be willing to put funds.

Moreover, ICOs require only a low minimum for participating in a project. It attracts amateur investors and coin owners who look for promising projects since the profit depends on the value of the purchased token in future. However, ICOs are prone to frauds and there is no guarantee for the sustainability for any project. That is why ICOs might not be a good option for investors who have long-term goals.

What are Initial Exchange Offerings (IEO)?

The first IEO emerged in the year 2017 but most of the projects chose to go for ICOs at that time. However, at the beginning of 2019, IEO became a hype. As per ICObench statistics, it was found that more than 94% of the projects participated in IEO. Of these projects, 58.32% of projects were published in the second quarter.

Though IEOs are relatively new in the crypto space, they have made their mark. They are almost similar to the old-school ICOs. Here, the tokens are not offered directly to investors, instead, they are offered through an exchange. In other words, companies sell or purchase the tokens for other Crypto Coins through the exchanges and offer to individual parties. Contrary to creating smart contracts with an ICO, IEOs allow investors to set up an account with a particular exchange and sends ETH or other cryptocurrencies to the account.

What’s interesting about IEOs is that it has a centralization-based model in place. Unlike ICOs where there is no monitoring by any third party. IEOs have the exchange as administrators. Crypto projects have to meet the requirements of the exchange to launch a token sale. Also, exchanges carry out a thorough assessment of the project before launching an IEO and ensure the security of the transactions. Thus, contributors are protected by the exchange in many ways.

What is Security Token Offering (STO)?

STOs are the most regulated forms of fundraising methods in the crypto market. Owing to its difficulty and complexity, this fundraising scheme is not prefered by most amateur investors and project enthusiasts.

For an STO, an investment contract is created that is backed from security tokens on the blockchain. Since these security tokens are backed by assets with a legal certificate of ownership, they almost resemble real securities. Simply put, STOs operate just like traditional stocks and the investments are saved on a digital ledger system.

Investors who buy security tokens are similar to those who invest using real bonds and stocks. The security tokens are a type of crypto-security and are secured by KYC-AML processes along with other regulatory protections. As security tokens are protected by “real-life” securities, they are a popular choice among the accredited investors. This also makes it one of the most costly fundraising techniques when compared to ICOs and IEOs.

Final thoughts

Whether it is ICO, IEO or STO, investors should know their capabilities before opting for any fundraising course. ICOs might be the easy way out because of its cheap investment and instant cashing out options. However, it will not be a good option for any investor who wants better security and align with the standards of the regulation. On the other hand, STOs are exclusively for those investors with large budgets at hand.

In a nutshell, there is no surety as to if STOs or IEOs or ICOs will be popular in the coming years. Fundraising routes keep evolving with time as per the requirements of the investors and crypto projects. Do you also believe in a crypto revolution in the existing market space? Get in touch with us to explore the possibilities in the blockchain sphere.

Source: http://blog.ionixxtech.com/ico-vs-ieo-vs-sto-understanding-the-nuances-in-tokenized-fund-raising/

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Thailand SEC Bans Meme Coins, Fan Tokens, NFTs

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Local exchanges in Thailand had been given a deadline until July 11 to submit their new rules for listing tokens that complies with the new guidelines from the Thailand Securities and Exchange Commission (SEC).

“The Securities and Exchange Commission (SEC) Board has approved the new rules that prohibit digital asset exchanges from providing services in relation to utility tokens and certain types of cryptocurrencies. The rules also specify that the exchanges set a requirement to be imposed in the event that digital tokens issued by their own exchange or related persons are listed on the exchange. In this regard, the token issuer who fails to comply with the white paper and relevant rules in substance could risk having such tokens delisted from the exchange. This new regulatory guideline aims to enhance protection of digital asset traders’ interest.”

The Thai SEC also added that listing rules prohibits local exchanges from providing services that have these following characteristics:

(1) Meme Token – having or no clear objective or substance or underlying, and whose price runs on social media trends.

(2) Fan token: tokenized by the fame of influencers.

(3) Non-Fungible Token (NFT): a digital creation to declare ownership or grant of right in an object or specific right. It is unique and not interchangeable with digital tokens of the same category and type at the equal amount.

(4) Digital tokens which are utilized in blockchain transactions and issued by digital asset exchanges or related persons.

Along with this move is their previous announcement of regulating Decentralize Finance (DeFi) projects in the country, including the issuance of digital tokens.

In the previous announcement, liquidity provider tokens, governance tokens, or tokens issued to those transacting in DeFi projects “must be licensed and must abide by the specified rules”.

The new regulation stipulates crypto exchanges, digital-asset brokerages, digital asset-dealers, private fund managers and investment advisors must be licensed by the Ministry of Finance.

Thai SEC states that, “For traders, it is best to study the DeFi project before getting involved in both technical and security aspects.” They also added that traders “should check whether the service provider is a digital-asset business that is licensed and regulated by the SEC or other regulatory agencies under law.”

This article is published on BitPinas: Thailand SEC Bans Meme Coins, Fan Tokens, NFTs

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Source: https://bitpinas.com/regulation/thailand-sec-ban-meme-tokens/

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After Bitcoin U-Turn, Nigeria Plans To Launch Central Bank Currency This Year

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According to Reuters, the Central Bank of Nigeria (CBN) plans to launch a digital currency pilot as soon as the end of this year.

Last month, the CBN Governor, Godwin Emefiele, made a U-turn on Bitcoin and other cryptocurrencies by saying he will “allow” them. Previously, the CBN had sought to restrict the cryptocurrency sector by imposing regulatory sanctions on monetary businesses that serviced cryptocurrency exchanges.

In a turn of fortunes, it now looks as though Nigerian officials are embracing blockchain technology. All the same, in what may well turn into a showdown between private and public cryptocurrencies in the future, arguments against central bank offerings remain as pertinent as ever.

The Nigerian Central Bank Digital Currency Has Been Years In The Making

Despite Nigeria’s purported aversion to fintech, it’s emerged that the central bank has been working on a digital currency for the past two years.

The CBN Director of Information Technology, Rakiya Mohammed, echoed what many other countries have mentioned in the past. That is, Nigeria will not be left behind in the technological revolution.

“We’re all aware that about 80% of central banks in the world exploring the possibility of issuing central bank digital currency, and Nigeria cannot be left behind.”

One of the reasons given for the CBN’s previous anti-Bitcoin position was a need to protect its citizens. In 2018, the CBN said that there is no legal redress if things go wrong in an unregulated market. There was also the usual spiel of links to illicit activity such as money laundering and terrorist financing.

Mohammed sells the idea of a central bank digital currency on it bringing financial inclusion and having the backing of the Nigerian government.

“If you have a central bank digital currency that is backed by the government, then people can make transactions online without fear of any default.”

Is This The End For Privacy?

As previously mentioned by billionaire investor Ray Dalio, governments will do all they can to maintain monopoly control of their money, even if that means outlawing the competition.

“every country treasures its monopoly on controlling the supply and demand. They don’t want other monies to be operating or competing, because things can get out of control.”

Anthony Pompliano rubbished this idea saying governments cannot ban Bitcoin. But he concedes that a scenario of coordinated global action could make life difficult for Bitcoin users.

And as cryptocurrencies continue to make their mark in the world of finance, regulators and policymakers may soon be forced to show their hand on the matter.

Unlike private cryptocurrencies, which operate on decentralized networks, central bank digital currencies would be issued and controlled by a central bank. This enables them, and by extension national governments, to track every transaction in their economies.

Liberal commentators view this situation as a significant blow to privacy. What’s more, as noted with several U.K banks refusing crypto transactions recently, central digital currencies have the potential to bring about a dystopian future in which transactions deemed “against the state” also get refused.

Source: https://bitcoinist.com/after-bitcoin-u-turn-nigeria-plans-to-launch-central-bank-currency-this-year/?utm_source=rss&utm_medium=rss&utm_campaign=after-bitcoin-u-turn-nigeria-plans-to-launch-central-bank-currency-this-year

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XRP, Dogecoin, MATIC Price Analysis: 21 June

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The last 12 hours have been rather terrible for the market as all the coins including the king coin fell severely. Total market capitalization came down by 7.8% at press time. XRP, Dogecoin, MATIC each lost 9.91%, 8.63% and 7.5% respectively. Regardless, XRP was in the news for SEC’s Commissioner Hester Peirce’s statement concerning the regulatory status of the coin, as she said that “ XRP doesn’t necessarily have to be a security”.

XRP:

Source: XRP/USD – TradingView

XRP faced the heat of the fall as did others as the coin fell below its 2-month long support level of $0.697 to trade at $0.694 at press time. Relative Strength Index (RSI) continued to fall towards the oversold zone since the early morning trade. Selling pressure was dominant.

A downtrend had been initiated according to Parabolic SAR as a white dot (encircled) made its presence above the candlesticks. Since the Average Directional Index (ADX) moved steadily at the 40.0 mark, the indicator remained directional at the moment. When ADX begins its descent towards the neutral 25.0 line, we can expect the active downtrend to weaken.

As the indicators suggest a negative movement, it is critical for support to be established at $0.644.

Dogecoin [ DOGE ]:-

Source: DOGE/USD – TradingView

Dogecoin already fell through its $0.285 support 24 hours ago and created a new support level at $0.24. Despite the present fall, the coin continued to keep above this level. Chaikin Money Flow displayed capital outflows dominating the market and the green line dropped into bearish territory.

Bearish momentum could be observed building on the Awesome Oscillator with the appearance of red bars. Also, both the Simple Moving Averages lines – 50 SMA (orange) and 100 SMA (red) remained strongly bearish moving way above the candlesticks.

Moving forward it is necessary for DOGE to remain above $0.24 in order to keep the losses minimum.

MATIC:-

Source: MATIC/USD – TradingView

Of all the altcoins, MATIC is the only one that managed to stay above its support level. Even though the dip took a toll on the coin, it didn’t fall below $1.21, trading at $1.30 at the time of writing. Critical support remained established at $1.04. Bollinger Bands could be observed converging as the red basis line acted as resistance. This volatility could be seen coming down in the case of MATIC.

MACD did not present any clear direction as the red signal line and the fast-moving line remained aligned in the bearish neutral zone. Squeeze Momentum Indicator changed its status from ‘squeeze release’ to an active squeeze (black dots) as bearish pressure could be observed coming down at press time.

Should there be no immediate volatility, the coin could continue to consolidate itself within the active resistance and support level.


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Source: https://ambcrypto.com/xrp-dogecoin-matic-price-analysis-21-june

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