According to Patrick Carey, the technology director at Cointerminal – a platform that helped collect over 65 million USD in various ICO – in the cryptocurrency industry the times of the “Wild West” ended. It will be much harder on the market now!
ICO will stay on the market, but different than we know
In an interview with Ecoinimist, Carey explained why today’s cryptocurrency projects need actual utility, strong communities and realistic expectations of the creators. If they do not meet these conditions, it makes no sense to organize ICO.
Everyone who has been on the market since 2017 knows that a few years ago a good marketing campaign and an interestingly written WhitePaper to collect millions of USD from investors. In return, offering, as it often turned out, nothing worth tokens. Carey, who was previously a system architect at Deutsche Bank, Thomson Reuters and Hayfin Capital, believes that this time is over. The ICO model will remain with us, but it will be different – to collect funds for development, you will have to sweat. More precisely: prove that your project makes sense.
The expert explained that companies at an early stage of activity must prove their real usefulness today and have some community support from the start. Only then should they organize ICO. He added that the founders should prioritize investors who think about their project long -term and do not confuse such investment with gambling – the appropriate attitude of investors may decide whether the project will develop or fall.
Another element is that startup players must maintain realism in terms of tokens. Simply WhitePapers and the whole tokenomy must now be much better thought out than they were in the era of the “Wild West”.
Carey also warned against excessive rely on X (former Twitter). In his opinion, the organizers cannot be based on this social media platform when they “value” the popularity of the project. He described “Iks” as a “highly botted” place on the network, which is becoming less and less reliable after many retail investors listened to the advice of influencers from social media and was cheated.
ICO, or what?
ICO (Initial Coin Offering) is a form of financing projects in the cryptocurrency and blockchain industry. They can be compared to IPO (Initial Public Offering – the first offer to purchase shares), only that instead of shares, investors receive tokens.
As a rule, the ICO organization process looks like this:
- The project announces that it intends to create a new cryptocurrency, platform or application,
- As part of ICO, investors can buy project tokens, most often paying at BTC, ETH or Stablecoin.
- Toxes can give different rights, e.g. access to services/platforms (so -called utility token).
This model was particularly popular in 2016-2017. However, many of the ICO turned out to be Scams.
