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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/

Blockchain

Making sense of Solana’s ‘extremely rapid’ growth

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When Solana experienced a crash right after hitting a new all time high on 9 September, traders and experts tried to make sense of the event. On “The Best Business Show,” investment expert Anthony Pompliano interviewed Kyle Samani, co-founder and managing partner at Multicoin Capital, to discuss the rising star-turned-meteor, that Solana has turned out to be.

From 4 cents to over $200

Pompliano began by discussing Multicoin Capital’s investment in Solana. He calculated that the initial investment had gone up roughly 3750 times since the initial round, when one SOL had been at $0.04.

For his part, Samani said,

“Solana today is growing at an extremely rapid pace. Users being on-boarded, assets being issued, stablecoins going into it – all of these things. Look at the last nine days: it’s just a vertical line from, call it a billion in assets to like 10 billion.”

While listing out possible factors for Solana’s success, Samani cited Solana’s speed and network, its NFT platform Metaplex, the rise in SOL’s price, and the stablecoins issued.

Network > Price

Inevitably, Pompliano brought up Solana’s crash – though he admitted calling it so was “hilarious,” in the context of the alt coin’s growth. However, Samani’s answer was a surprising one. He claimed that he tried to ignore prices and didn’t refer to Coin Gecko or Coin Market Cap. Rather, he preferred to focus on Solana’s network and its growth. He further explained,

“Our time horizon is measured in years, not weeks or months. So the question we will always ask ourselves, is you know, is this network compounding at a sufficiently fast rate? And if you really go dig into developer activity, user on-boarding, dollar flow in the system. . .all of those things right now are compounding at an astounding rate and I don’t think that’s going to slow down.”

Furthermore, the following infographic presents data on Solana transfers.

Could Solana kill Ethereum?

Samani spoke about Metaplex and how the NFT platform came during the NFT Boom of summer 2021. He noted Ethereum’s high gas fees and how many users saw Solana as a faster alternative. Even so, Samani admitted that he thought it was “improbable” for Solana to displace Ethereum. Instead he suggested the two would likely co-exist.

Samani also addressed a common criticism aimed at Solana, regarding the its centralized nature, due to the number of validators and the expensive hardware required to run it.

Samani called the criticism “valid” but “irrelevant,” pointing out that the trade-off meant better performance for users, reiterating the network’s rapid growth.

At press time, there were between 974 and 1000 validators on the Solana mainnet. Samani’s assessment of the alt coin was simple but memorable. He said,

“I don’t think there’s going to be another Solana.”

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Source: https://ambcrypto.com/making-sense-of-solanas-extremely-rapid-growth

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Will Bitcoin make a pitstop at $85,000, before racing to $100,000

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Even though Bitcoin has been making no major moves of late, the market’s bullishness on the coin continued making headlines, and all for the right reasons. After all, the king coin surprised the market before, with massive its moves that rendered skeptics silent. 

Bitcoin to $100K, by the end of the year is a much-anticipated move by the market. As we enter the last quarter of this year, Bitcoin is expected to push towards that major psychological barrier. However, even though Bitcoin presented a solid recovery from the May crash, at the time of writing, the effects of the September 7 flash crash hadn’t completely worn out. 

Nonetheless, as BTC presented around 3% daily gains and traded at the $48.5 level at press time, the market once again eyed BTC for some major moves. But before Bitcoin actually makes a move towards the $100K, its last stop would be the $85K mark which will confirm an upward move to $100K. 

The above observation was part of a market report by trading platform Decentrader ,which presented bullish signals in the near term, for BTC. It presented how we it could be setting up for a major run that first reaches $85,000 before breaking through the psychological barrier of $100,000, thereby making for an explosive Q4 2021. 

BTC looking hyper bullish 

In spite of BTC trading below $50K throughout the week, on-chain metrics have led analysts to stay bullish on Bitcoin price action. A report stated that the constantly decreasing supply of BTC on exchanges put upwards pressure on price in the medium term. With demand increasing as supply reduces, the price would go up. 

Further, another factor that contributed to Bitcoin’s bullish mid-term trajectory was its SOPR which presented a similar trend to the months that followed the March covid crash. After the summer crash where SOPR was heavily printing green candles, some minor selling at a loss was observed on this pullback from $50,000 too. Thus, SOPR flashed a sort of buy-the-dip opportunity as final sellers get flushed out before it moves higher, as was observed in Q4 2020. 

Additionally, Active Address Sentiment Indicator had reset with price change lower than active address change. With a pullback in prices alongside constant network growth, the market will look to catch up with network growth by noting price gains. 

Thus, the report presented a hyper-bullish possibility of Bitcoin reaching $85K by the end of Q4. However, Bitcoin’s options market didn’t look too big on gains at the moment with funding rate flashing negative signs. Further BTC’s global open interest by expiry indicated year-end expectations of around $65K which is almost $20K less than the target of $85K. 

So, is $100K too far?

Well, not really. The reason being that, from the July local low of around $30K Bitcoin registered almost 75% gain to reach the multi-month price high of over $52K. Notably from the current consolidating prices, another 75% price gain would land Bitcoin to $85K. So a rally like that over the next three months won’t be a big surprise. 

Thus, while BTC was consolidating, a squeeze upward should characterize the remainder of this year, similar to events from 2020. 

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Source: https://ambcrypto.com/will-bitcoin-make-a-pitstop-at-85000-before-racing-to-100000

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Hungary Unveils Statue In Honor Of Bitcoin Creator Satoshi Nakamoto

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Hungary Unveils Statue In Honor Of Bitcoin Creator Satoshi Nakamoto

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Key takeaways

  • Hungary has erected a statue in honour of the anonymous creator of Bitcoin, Satoshi Nakamoto.
  • Hungary’s Bitcoin adoption is still underdeveloped compared to other European countries.
  • The initiative hopes to create awareness for cryptocurrencies in the country.
  • Satoshi Nakatomo’s legacy is gaining traction globally.

A statue in honor of the anonymous creator(s) of the pioneer cryptocurrency, Bitcoin, has been erected in Hungary. The imposing bronze statue was unveiled in Budapest – Hungary’s capital – on Thursday. Its creators say it is the first in the world to pay homage to the anonymous creator of Bitcoin.

The bust sits atop a stone plinth engraved with the name of Satoshi Nakamoto, and features a featureless face wrapped in a bronze hoodie engraved with the Bitcoin logo. The face is heavily polished to make it reflective like a mirror in which viewers can see themselves.

The sculptors, Gergely Réka and Tamás Gilly said the face was made reflective to capture the mantra of “we are all Satoshi,” so when viewers look at the statue they are reminded that they play just as an important role in Bitcoin as Satoshi and everyone else does. The statue sits among others that depict notable figures including Steve Jobs, the founder of Apple.

The Central European nation considers Bitcoin to be an asset and hence subject to capital gains tax. In May, plans to reduce the tax rate on cryptocurrencies were however revealed. The finance minister Mihaly Varga posted a video address on Facebook that announced that from 2022, taxes on cryptocurrencies would be cut in half from a 30.5% rate to 15%. It is hoped that the cut would incentivize better tax reporting by cryptocurrency enthusiasts and bring in “several billion florists” – the country’s currency – in revenue.

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According to CoinDance, a Bitcoin trading volume by country data aggregator, Hungarians traded 256,260 (over $12 billion) in the past week. However, compared to many other members of the European Union, analysts say the Bitcoin space in Hungary is currently in a state of underdevelopment.

Andras Gyorfi, the initiator of the project and a Bitcoinjournalist, while addressing a crowd at the unveiling said that the statue is a token of respect to Nakamoto, and an effort to “raise awareness toward blockchain and cryptocurrencies.” Hungary has become the first country to honor Bitcoin creator Satoshi Nakamoto with a public statue.

The organizers of the statue project said they invited Nakamoto to the unveiling in the hopes of finally learning the true identity of the Bitcoin inventor. The moment was a significant one however as it shows how far Bitcoin has come since its creation in 2008. 

There is no doubt that Satoshi Nakatomo’s creation has created value for a lot of people. Recently, El Salvador became the first nation-state to adopt Bitcoin as legal tender. The country expects that with the move they will give back economic power to citizens and incentives savings in the form of reduced remittance fees that should have gone to remittance giants.

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Source: https://zycrypto.com/hungary-unveils-statue-in-honor-of-bitcoin-creator-satoshi-nakamoto/

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