2018 is the Year of ICOs
Initial coin offerings (ICO) are rapidly becoming the hottest topic of discussion in startup and investment circles. Previously we covered Why an ICO is a Better Option for a Startup to Raise Funds.
While the number of investors seeking exponential returns on cryptocurrency has increased, the number of startups using ICOs as a means to raise funds has also risen sharply. Last year, new businesses raised roughly $4 billion from ICOs – and analysts predict the trend to prevail in the year of 2018 as well.
While the general concept and practices of an ICO are similar to an IPO, there are certain differences like ICOs do not have any intermediary (regulator) or underwriter.
In an ICO, some quantity of the crowdfunded cryptocurrency is pre-allocated to investors in the form of tokens, who in return, provide legal tender (FIAT) or cryptocurrencies like Bitcoin or more commonly Ethereum. These tokens become an exchangeable and functional currency unit once the ICO’s minimum has been achieved and the startup project is launched.
The token sale methodology has surprised many in the technology and investment industry, and is showing continued momentum as some big brands are moving to use it for the sake of fundraising. Recently, private chat application Telegram has announced taking advantage of the crypto-boom and using an ICO to raise money.
The application, which has over 170 million monthly active users (MAUs), is planning to raise $1.2 billion, the largest amount ever raised from a token sale. In order to lure bigger investors, they’re expected to arrange a private token sale in February and go public in March.
In addition to Telegram, there are some other interesting ICOs being closely watched. Here, we are listing just a few of them.
Rentberry has been in the rental industry since 2015 and is understood to be a decentralized and disruptive platform. Its power to automate steps within the renting process, from contract signing to rent payments, has saved tenants and landlords a large amount of time and money. Rentberry's smart contracts are a mean
for tenants to save big in the form of a simplified rental security deposit process.
- Cypherium
Cypherium is the brainchild of a team with previous work experiences at tech giants; Amazon, Google, and Microsoft. They’re going after a highly scalable Blockchain with multiple governance layers and a few unique features.
- Loci
This startup is unique in the terms of being already backed by a VC fund. They’re aiming at expanding the core platform and enable buying and selling of intellectual property through its native tokens. They aim to simplify patent registration and protecting IP via Blockchain.
- RightMesh
This is a platform (and protocol) that is rapidly changing the way the world connects. Blockchain technology enables RightMesh’s network to identify nodes with secure (Ethereum) accounts. They are aiming to expand their customer-base by incentivizing the users to share their device resources. Here, they need money, and an ICO is surely a choice they are considering.
- Coinlancer
As the name suggests, this is a freelancing platform based on smart contracts and smart escrow system. They’re attracting knowledge workers and freelancers to a “Free from Fee” platform, as existing freelancing portals deduct 15-20 percent fee on each transaction. Through Blockchain, Coinlancer aims to eliminate the problem. They have a reliable mediation system and much lower fee on transactions – just 3 percent.
If you are also a startup and looking for an expert advice on an ICO, talk to our experts at InWage. We’ve helped a number of startups in executing their vision with Blockchain technology. Be our next success story!