Coss.io Token Exchange

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There are many crypto exchanges but obviously if you are planning to do an ICO you need to list your tokens somewhere.

Coss.io is a relatively small crypto currency exchange when compared to the larger crypto exchanges. The exchange is based in Singapore and is still relatively young having only started in the past year at the time of writing this.

The exchange also has its own token called the COSS token. The token has value due to the fact that half of all the transaction fees are paid out as a dividend.

coss token

The good thing about the COSS platform is that it will list new tokens and is always looking for interesting tokens that can attract customers due to the offers that COSS can offer them.

In order to get your token listed will probably require the team to build a direct relationship with the team and offer COSS a good deal for their users.

Gibraltar Exchange Rock Token

gbx, Gibraltar exchange
Gibraltar Token Exchange

The Gibraltar exchange is one of the most interesting token exchanges in the world right now as it will be one of the few licensed crypto exchanges in the world. The Gibraltar exchange is issuing its own token that will be the effective currency on the exchange.

The fact that you will be able to issue a token that is a security is very interesting and this is one of the most innovative features about the token exchange. Many ICO’s would make lots more sense if their tokens were in fact securities and not utility tokens. The exchange  will have a more traditional sponsor like London AIM.

The Sponsors will vet the ICO and will help the businesses complete their token listing. The listing fees will be paid with the Rock token (RKT), which is the Gibraltar exchanges own token that will be used to paid for the GBX membership, Listing fees, trading fees, early access etc.

GBX

The Gibraltar legislation has made crypto currency legal and is ICO friendly. The Gibraltar Financial Services Commission (GFSC) has a new regulatory framework for crypto token sales.

As of writing this article the GBX exchange has not yet launched its services to the market however it is expected to launch at the end of Q1 2018.

 

 

 

RenRen ICO

Renren icoRenRen is planning to raise funds through an ICO. This is interesting for a couple of reasons:

  1. China previously banned ICO’s
  2. First large listed company doing an ICO

The market seems to have reacted positively to the news with the stock price increasing by 47% on the news. The new token will be the RRCoin. More information about the RenRen whitepaper seems to only be in Chinese.

This is inline with our 2018 ICO predictions in that this is the start of the larger businesses doing ICO’s.

This is also a signal that the Chinese  market will soon open up again and should signal a possible boom in ICO activity if this does open up again as the Chinese market was a huge contributor to the ICO market until the ban. RenRen is listed on the Nasdaq in the USA and therefore may be circumventing this but the fact is that the whitepaper is all in Chinese and this is a good indicator that the focus will be on the Chinese market.

Some pundits are skeptical about this ICO as they say that RenRen is not doing well and this is something of a money grab by a listed company however the fact that this is happening is overall positive.

 

2018 ICO & Crypto Predictions

2018 Crypto predictions

In 2018 we predict that there will be a number of trends ICO’s:

  1. More real companies that have significant traction (users, revenues, etc.) will do ICO’s
  2. ICO’s will move to central hubs versus the current distributed individually run events
  3. The media will call the ICO market as a bubble and about to die every day even as the ICO market matures and becomes more robust

The bigger prediction that most people are not talking about is that token issuances that are securities will dwarf utility tokens. This will be driven by non tech token generating events “TGE’s” in traditional fund sectors. This will become possible through the establishment of more regulated exchanges that have government issued licenses and make it possible for people to trade tokens as securities legally.

Miscellaneous predictions such as con artists, fake ICO’s and law enforcement coming into the picture with arrests etc. will happen however this was already starting to happen in 2017. The scale around this will be a lot faster than people realise and the critics will point to ICO’s being scams.

Enjoy 2018!

Blockchain software languages and blockchain developers

blockchain software

Building a blockchain project may seem like you only need blockchain developers. While it is true that you need blockchain developers for your project it will also need other infrastructure such as a website, design, mobile applications, email, hosting, backup, databases, api’s, security etc.

Currently the market conditions around finding blockchain developers are such that there are not enough blockchain developers to support the demand and this is making hiring full time blockchain developers unaffordable for many projects.

One option could be to build all the infrastructure for the project and have the blockchain specific components outsourced and accessed through an API or have the team work with your developers to help put the code together.

What most ICO projects need is DAPPS

DAPPS is an acronym for: Dated, Achievable, Personal, Positive and Specific. The idea around a Dapps network is that there is no central server and rather a program that lives on top of the network.

An ICO smart tokens is a Dapp and most ICO’s are built on top of Ethereum (ETH). Ethereum has its own programming language which is called Solidity which allows developers to write smart contracts. Inside this language is compiler which is built in javascript.

Core Blockchain Developer Languages

Each blockchain core has been built in different languages for example:

  • BitCoin Core: C++ and Java
  • Ethereum: Go (Multiple ports that support other languages but GO is the most advanced)

Cryptography BlockChain development

The core of blockchain technology is cryptography which is the link between the list of records called ‘blocks’ hence the name blockchain. Much of the contentious forking of coins comes from the way that the cryptography is being changed and whether or not the ‘coins’ owners are happy to move to the new system or not.

For more info check out the info on blockchain info on wikipedia.

Evolving ICO Ecosystem and funding

The world of ICO’s and Series A is converging as more deals happen in the ICO space.  This is shown has by the fact that the median ICO size is becoming closer to that of a traditional Series A raise amount.

series_a_vs_ico

Source: http://tomtunguz.com/ico-trends/

Series A Funding rounds

By definition Series A is typically the first round of capital from Venture Capitalists.

Traditionally startups have to achieve significant traction (usually revenue) before institutional investors will invest and therefore it is a significant mile stone for startups that want to achieve high growth rates and put them on a path to more institutional funding rounds.

Series A funding often also comes with a new share class that gives Venture Capitalists more rights vs ordinary shares.

ICO Funding

In ICO funding there is no equity sale and therefore it is not directly correlated to Series A funding but it has become closely related based on the fact that the funding amounts are close and the businesses are early stage.

The ICO world is changing so quickly though it would be a mistake to put ICO funding as for only early stage startups, as more businesses are turning to token sales and even listed companies have started to get into ICO’s. An example of this would be Naga a listed Frankfurt business.

We believe the  ICO space will evolve and more and more later stage businesses will turn to token sales to raise capital.

A growing ICO market

Number of ICO vs Series A

Source: http://tomtunguz.com/ico-trends/

It is still early and you can see that the number of successful ICO’s is growing rapidly. There will be a maturing of this market as professionals and mature businesses become more involved in the ICO space.

How much can you raise for your ICO?

As of the end of 2017 the raising of capital has become more difficult due mainly to legislation in China and Korea. Due to this the huge funding rounds that happened in the mid 2017 market have largely disappeared.

Currently $30m raise is considered to be on the large size. When comparing this to a Series A round this would be a large funding round, however a Series B funding round is probably more in line.

 

 

 

 

How to plan a timeline for your ICO

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Disclaimer: Building a community will need to continue to be done post the ICO to support the token and achieving the projects objectives.

Private token sale

Selling your tokens all in a private sale is also possible and good examples of this would be OMG Token that happened without a public sale. There is nothing wrong with this approach however often project owners networks are not large enough to sell enough tokens to meet their goals.

Public ICO

If you want to  do a public ICO you need to do build a community around your token and vision. This takes time and you need to build trust with your community by showing regular communication and traction that show that you are going to achieve the vision you outline.

We suggest that your build up to your ICO should take around 4-6 months. This does not include the learning and investigation you may have done before to convince yourself that you want to launch a Token offering.

Most successful ICO’s need to do a preico funding round and a public funding round.

Preico funding round

The preico funding round can be done publicly or privately. Doing a public preico round can leave a bad taste in the market as the public token buyers can see the discounts being offered to larger buyers and this can cause resentment.

Private preico sales need investor networks and often comes with a high commission cost.

Conclusion

Doing an ICO properly takes time and money. The cost of doing an ICO has risen overtime with more and more competition from competing ICO’s in the world. Be prepared to raise money before the preico and build your networks consistently.

 

ICO Communities around the world

ico_by_country

Source: http://tomtunguz.com/ico-trends/

There are a number of active ICO communities around the world that support and establish ICO projects. We will highlight some of the top communities in this article.

Singapore ICO

Regulatory Framework

Singapore MAS has said it would not regulate utility token ICO’s. This means that currently there is no reason you won’t be able to launch an ICO from Singapore.

Community

One of the most interesting ICO communities in the world. Vitalik Buterin the founder of Ethereum is based in Singapore and actively supports the community through events etc. The Singapore startup ecosystem is also strong and has many events and organisations that support starting new business which makes it attractive for ICO’s.

Switzerland ICO

Regulatory Framework

The Swiss don’t have ICO regulations but if your token is a utility token are considered to be acceptable. Most of the ICO’s are run as foundations out of Zug which is also called “Crypto Valley”.

Community

There are a number of experienced ICO practitioners in Switzerland due to the fact that a number of successful ICO’s have already happened in Switzerland. Switzerland is considered to be safe and stable environment that attracts capital. Ethereum foundation is also based in Zug and this means that there is a huge precedent for the Swiss ICO market.

Traditionally Switzerland is an offshore banking haven and this means that their are many wealth managers and high net worth individuals in the market.

Korea ICO

Regulatory Framework

Currently Korea government has banned a ICO’s.

Community

There is a strong cryptocurrency community in Korea and they are large buyers of Bitcoin. This could be due to some of the regional security issues with North Korea. This community is still interested in the ICO listings and environment which will surely come back again once regulations are brought in by the government.

China ICO

Regulatory Framework

Chinese government has banned ICO’s and crypto currencies. This is expected to change in the near to medium term.

Community

China was the hottest ICO market up until the ICO ban in September 2017. The market is expected to open up again in the short to medium term and a number of Chinese companies are actively working in the background to prepare for these changes. As an example one of the biggest ICO Venture Capitalists Fenbushi is based in China.

Japan ICO

Regulatory Framework

The Japanese government has issued licenses to 11 Japanese exchanges for crypto currencies.  This does not necessarily govern ICO’s but the future of crypto looks bright in Japan.

Community

The community is a bit insular and this is partly due to language barriers that Japanese insular culture. However due to regulations that have made crypto currencies legal there are a large number of crypto currencies holders.

USA ICO

Regulatory Framework

The US have not banned ICO’s but have warned against tokens that could be considered to be securities. Since the Howey Test could be quite wide the  risk is considered to be fairly high due to the fine line many ICO’s run.

Community

Some of the biggest ICO’s in the world have come from the US. The US market is the historical incumbent in the tech market and one of the great capital markets in the world. Silicon Valley has started to react to ICO’s with some leading investors in ICO’s coming from traditional venture capital.

Gibraltar ICO

Regulatory Framework

Gibraltar has a licensed token market at https://gbx.gi/ that will be one of the first licensed and regulated token markets.

Community

The Gibraltar community is small, however due to the regulatory environment is expected to grow dramatically.

Australia ICO

Regulatory Framework

Australia government has said that ICO’s are regulated by existing financial regulations. To find out more see: http://asic.gov.au/regulatory-resources/digital-transformation/initial-coin-offerings/

Community

The Australian market has a strong investor appetite for smaller equity offerings based on the superannuation funds that are part of the Australian regulations. This makes raising money for ICO’s from Australia attractive.

Building your ERC20 token

erc20 tokens

ERC20 tokens are open source and can be created fairly quickly using the public source code that can be found here: https://www.ethereum.org/token

You still need to do basic variables and create the rules around your token but in essence the framework is there and you then need to address what you want your token to do, how many you want to issue etc.

What’s great about the ERC20 token is that it is recognised by the community and can be easily integrated onto public exchanges and traded.

It is possible to issue your own unique tokens but this will mean you will need to address many issues such as how the token will be mined, stored, security and more complex problems that come with developing a core token platform.

 

Tokens ICO Source code

One of the best practice in ICO’s is to publish your source code for your token to allow the community to check the code and make sure that it is acceptable and does not have bugs. This is also a good way to work with the community to ensure that your supporters have transparency and can feel that the project is open and part of the community.

Hire a blockchain developer

The last point here is that if you are not a block chain developer or super geek better find someone to help you fast before doing this on your own. The token is core to the offering and you don’t want to mess up the very thing you are selling at your ICO.

 

How Blocks Ventures Venture Debt works

venture debtBlocks Ventures does venture debt for ICO’s.

The terms of the venture debt:

  1. Has interest
  2. Requires a small piece of equity
  3. Requires tokens at the ICO

Investment decision making process

We go through the following process around our investment decisions:

  1. Screening deals (prefer companies with substantial traction and clear utility token)
  2. Do due diligence (team, financials, vision, culture etc.)
  3. Check with our investors for preico investment appetite
  4. Check with our listing partners for their interest in listing the token
  5. Make offer
  6. Negotiate terms and close
  7. Send cash and introduce advisors etc.

The whole process can take a couple of weeks however as we are small in size and can only do 3-4 deals a year our filters have to be high due to the opportunity costs.

Investment size

Our ticket size is $500k to $1m for the venture debt. We believe that it should take around 4-6 months to launch a successful ICO and the barriers to entry are becoming higher with the number of ICO’s exploding which means that good ICO’s need time and money to develop themselves.

PreICO investments

We don’t invest in preico investments as this is not our thesis and prefer to help businesses with doing their ICO’s and coming in earlier than traditional investors.

ico investment

If you would like to have your business considered for investment please send us a message through our contact form.