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RE: Breaking Beyond Bitoin: EOSIO/EOS Token Sale Github Repo is Available!
@tomm @ogoowinner
ICO = Initial Coin Offering. If you don’t know crypto lingo think of it this way. You get the opportunity to invest into a new company. It’s like buying stocks in a company when the stocks are at their lowest(when they are very new). Nearly all the whales in this community were part of Steem’s ICO. It is a risk reward assessment.
Now Dan has a track record for creating crypto companies that end up successful. So he’s going to attract attention from big investors. I’m talking about people who are going to invest in the hundreds of thousands to the millions of $’s.
If you're still following here is the second part to this.
This ICO that is being proposed is a very different from today's standard ICO’s. Normally what happens in an ICO is there is a time frame opened ( about a few weeks to a month) and you get a handful of investors (maybe a few thousand) that come in and gobble up all the stocks/coins.
As a result what happen is low liquidity. When we say liquidy in cyropt talk it’s about the markets ability to handle when people cash out their coins/stock for cash. Imagine if the facebook own Mark Zuckerberg left he cashed out of Facebook, (He own like 25% of the 100billion company). Every other investor has lost 25% of their stocks value. The stock crashes. But lucky for stock investors there are rules that prevent such things in the stock exchange, but in the cryptocurrency market you can buy 25% of a stock then cash out. This happens all the time in the crypto market. These investors are no joke making millions of dollars by doing this. (This topic can go on forever about the market manipulation that happens in the crypto market)
Which get’s to this ICO’s unique selling idea. By locking in investors and spreading the ICO out over the course of a year. He is building high liquidity. So instead of having a handful of investors you have a pool full.
I like his idea but my biggest worry is this.
One year token lock is a fairly long time in an industry that is changing in leaps and bounds by the month. I feel like the same effect can be accomplished in 6 months. I will also second what @hatchi said it will make investors hesitant. I want to believe it will stop the crypto wolves from appearing but it probably won't.
If too many people invest into the 200 million eos sell then what if the token becomes worth too much, like 30 cent a pop… that would discourage the rest of the investors for the rest of the 360 day ico sale. And at 30 cent a token he may not be able to sell that many a day, so what happens to the people who paid 30 cent a token, does it depreciate rapidly?...
Or maybe he can do what ripple does, unsold tokens at the end of the day get tossed into the bucket rather than released into the network. This way the token does not devalue and everyone is locked in at the same purchasing price.
isn't this backwards?
I mean - essential price established in first 5 days is (USD value of contributions)/(200,000,000)
so the MORE invested, the CHEAPER the price...
yes and no...damn. it is true if the amount of money going in on first day reaches a kind of network effect
But there is the opposing force of fewer tokens per $1.
Dan however is likely just saying free market will establish the price and he expects this day to have the most volume and therefore made it so a large amount could be purchased to establish that price on the first day. And sadly there is very little historical data on this one because ags was only tried once...though it is a very fair distribution scheme imo.
Yup. This is very well stated. :)
However it is important also to note they call it a token sale. I suspect this is for legal reasons.
I like the idea of locking them away though to help...and sadlu woth ripple it has worked. However woth ripple it has also lost a GREAT DEAL of respect