It so happened that the initial placement is used exclusively by cryptocurrencies, but now the idea of many startups launching ICOs clearly does not fit into the framework «classic» blockchain projects. Increases the volume of services offered, designed for future promising prospects. Therefore, we decided to consider original projects, their investment attractiveness, the reasons for choosing such a fundraising.
Why non-cryptocurrency companies conduct their ICOs?
Now, many projects that launch ICOs do not even plan to create a blockchain platform or a new payment system. In some cases, the feasibility of tokenization is questionable..
Artem Gurevich, executive director of the Sibcoin Foundation, believes that due to the fact that cryptocurrencies began to be produced, projects appear that artificially made up the need for tokens, but this did not bother the market, since there was general euphoria. In the wake of the hype, ICOs were held even for the real sector, where blockchain, decentralization and the token economy are needed no more than «beautiful wrapper».
Successful ICO in 2020?
However, this trend is easy to explain. ICO is the easiest and most understandable way to raise capital. The loan will require serious preparation and will burden you with interest. A full-fledged IPO is associated with the disclosure of a large amount of information, audit, listing, and so on. This procedure is time consuming and quite expensive, so it is simply not available to the community..
Ivan Aleksandrov, managing partner at Memorandum Capital, says that fundraising without burdensome commitment is certainly an attractive solution. He personally came across this:
«The initial offer of coins is practiced in all areas, every week we are contacted by the owners of factories, factories who would «tokenize» (sell tokens), in other words, conduct such a clever IPO, while attracting new capital, but you won’t have to bother too much».
In addition to simple and simple fundraising, the lack of legislative regulation of this area attracts. In fact, the company receives money, but there are no guarantees for the fulfillment of obligations from the state..
Vyacheslav Zolotukhin, the founder of EvoDesk, said that one of his familiar companies — cryptocurrency broker — held an ICO solely to raise money that they need as a certain «airbag» in case if suddenly some transactions will not proceed in the way that was planned. In fact, for them it is — insurance fund or deposit.
What Does the ICO Make of the Industry’s Efforts on Privacy?
However, ICOs are carried out not only by beginners, but also by established companies. Dmitry Muradov, chief investment strategist at ICBF, says that in this case, enterprises are striving to implement internal innovative projects to introduce decentralization into their operations. They transfer information to the blockchain for increased security and transparency, use business contracts for automation and other benefits to improve efficiency-processes.
Examples of non-obvious areas where ICO is taking place
When it comes to the ICO of a company, and sometimes even remotely with a blockchain, it means the launch of security tokens (digital analogs of shares) or service tokens (providing owners with rights within the network). In the first case, a real-time introductory policy is used.. «classic» virtual currencies.
Such a mechanism is inherent in second generation systems, which belong to the following spheres:
- information technologies;
- internet of things, logistics.
Although the function of means of payment can be built into a security system, they can be built into a system for recovering intrinsic value, which makes them similar to the underlying cryptocurrencies. These include successful projects such as TRON, VeChain, ICON and others..
Most of the projects do not set the main goal of creating a new means of payment, and they now dominate the market. For example, recently Fyodor Bondarchuk and Konstantin Khabensky announced the upcoming launch of funds for their Cinemico blockchain platforms. and Cinematix, through which anyone can become a film investor and receive a share of the box office.
In the fall of Russia, funds were collected by Lescoin, which provided the virtual assets with timber. Another project tied tokens to sand, which has not yet been mined. Also presented are projects planning to create a single platform for the digital implementation of loyalty programs for retail chains, business promotion, support for athletes and from a host of other areas…
The ideas that some ICOs are associated with are not related to blockchain and fintech, but they also include the areas listed earlier. Such projects most often use useful tokens, so they can offer potential investors various opportunities.
FTV Coin is raising funds to create a platform that will help models gain recognition and give users access to exclusive goods and luxury goods. OKOIN will allow cryptocurrency holders to access adult films in virtual reality. ICO CarTaxi was conducted by a successful company that offers to evacuate cars for tokens.
Other areas include such areas as education, medicine and tourism. These are very promising and useful areas. Level one is a platform on which knowledge for internal tokens can be obtained, improved qualifications, and experience exchange. With the help of MedCredits, people can get a doctor’s consultation, find out about the nearest medical facilities, pharmacies, and specialists. Cool Cousin allows you to share travel experiences and make recommendations to tourists. Among the projects, one can single out Binance Coin, the owners of which receive more favorable working conditions on a well-known crypto exchange..
There are a lot of examples, and their variety suggests that now almost any field of activity is tokenized. However, many niches are already occupied by successful and effective platforms, so it is more difficult for beginners to enter the market, and investors have something to compare them with..
Prospects for businessmen and investors
Initial placement allows you to quickly, without significant expenditures of money and time, to raise funds. Therefore, some companies do not deny themselves such provision of additional competitive advantages. Business with the help of ICO seeks to reach a new level: to improve work, reduce costs, increase overall efficiency and create a foundation for future development. In non-obvious areas, such a tool allows you to attract attention and obtain the status of an innovative company..
Along with decent projects, scammers also want to get money quickly and disappear in an unknown direction. Unfortunately, with the growth of the market for virtual currencies, there are more and more of them, which leads to tougher control by states. However, the problem is the loss of invested funds by investors…
Alexander Borodich, founder of the Universa blockchain, believes that legislative regulation will bring an already formed market «out of the shadow» and thus draw the attention of the vector to it. Experts expect control to clear the market from fraudsters and make it transparent.
Despite the hardships and challenges, investors are investing in the hope of finding a future Ethereum or Ripple. For the entire ICO market, the level of risk is the same and does not depend on the sphere, so there is no need to prejudice projects that represent not only «classic» directions. The main problem in most cases is the inattention of agents and haste, which always get along badly with money..
«The big risk is great profit potential. If you want some kind of insurance, then just carry the money to the bank and get your 5–6% per year, and you don’t worry», — says Vyacheslav Zolotukhin.
In any case, the investor should conduct a detailed analysis of his teams, assess the potential of the project and the possibility of further development. And even if a company with blockchain only through ICO, but has great potential and good prospects for future development, then the field of activity and the choice of the method of attraction are not so important. If GitHub had done its initial deployment at one time, how would you rate its prospects?
text: Ivan Malichenko, photo: Pexels