With the SEC stepping in to tell companies and app projects to scale back on some of the biggest promises they make to investors, it’s a good opportunity to examine both how to interpret the promises made by companies, whether these standards should be revised, and what the best move is when there is no explicit promise on returns — but investor expectations are high.
This has occurred with many companies, who skirt regulations by omitting mention of things like “dividends” but still give the impression that investors will see rewards but offer no concrete plan or little information on how this will occur.
Here are several ICOs which have offered returns to investors. Now, offering returns is not in and of itself problematic, it’s a lack of transparency that needs to be addressed throughout the cryptocurrency space.
Token Desk is a blockchain based web platform as well as a marketplace for cryptocurrency crowdfunding. Its mission is to allow investors to purchase tokens in a manner which is faster and more secure.
The company has made the following statements regarding promised gains to investors:
“TokenDesk aims spend 12% of our NET profit quarterly for buy back TDS Tokens. It increases TDS Tokens value and liquidity gradually. Tokens, that are bought, will be burned by a smart contract.”
Rhovit is a platform which makes it possible for users to utilize cryptocurrency to pay for content. They have yet to release their beta, but have made a number of claims on their site.
Once a year an annual “Dividend” of the Rbit Tokens collected in the User Pool will be distributed out to the User community.”
GameCredits is a universal currency and virtual wallet for gamers around the world. The company’s currency is called Gamecredits, and its use is tied into the returns promised to investors.
As the company has claimed:
“The more gamers that use the Gamecredits mobile platform the more Gamecredits should be purchased and spent in games. This should create more demand for Gamecredits. In return, the success of the platform should result in a large economy for the gamification of the platform and the usability of MobileGo tokens.”
There are hundreds of other ICOs both successful and in development, and while they don’t share the same features, there are a number of ways that they can better promote user returns.
Firstly, by making the protocol behind the platform, coins, and associated technologies accessible companies can assure investors that the foundation is secure and solid. Some protocols may offer more features, but if they’re not tied into the blockchain, the entire platform is vulnerable to hacking. Secondly, no ICO should make expansive claims about how much money an investor will receive upon funding. Realistic expectations may not be as impressive when it comes to profits, but they are more in line with SEC regulations, and given the direction regulation appears to be headed when it comes to technology companies and ICOs in particular, this would seem to be the sort of best practices that will be beneficial to everyone.