Hello Steemit friends,

today i got email from Refereum and surprise, surprise they are in the line with other ICO's like Nucleus Vision and made the decision to cancel their public sale of tokens.

Recently a storm of indignation reached officials from Nucleus Vision in the live chat with Ian Balina below. Many people were upset of the decision by management.

Nucleus Vision Crowdsale Announcement video by Ian Balina

That pattern continues now with upcoming ICO's. It is more and more unlikely that well known ICO's organize public sales..

What is an ICO?

For all who don't know the abbreviation means "initial coin offering" and is comparable with an IPO (initial public offering) in the stock market. A project or company uses that construct to distributes tokens (often ERC20 based on Ethereum) to give you something like a share in the project. The intention behind such token can be read in the whitepaper and is important to get a sense of value or in what you invest. Utility tokens can be used to do something in a provided ecosystem, coupled with special events provided by the team or it is a real currency which can be later used to buy real products.. there are tons of use cases for what a coin or token can be used.

The current situation

Started in 2017, Youtubers like Ian Balina analyzed ICO's and provided spreadsheets of their evaluation with helpful insights. The result was that more and more people took notice of ICO's and the opportunity to make fast money on that. The judgement of a popular Youtuber worked like the hand of Caesar.

Thumbs Up would generate hype for the ICO and Telegram groups got more and more overcrowded up to 50k+ people inside where the community managers were almost helpless to answer all the questions.. The same goes to the Whitelisting of participants on the project's website. In 2017 there were maybe a few thousand at maximum.. nowadays projects have 100k+ registrations. What are the implications of that?

Available Tokens and hard cap

Most projects define a definite number of tokens they will publish with a certain price tag. Based on that there is a hard cap for contribution in $ or expressed in cryptocurrencies. 2017 we had big ICO's like Tezos with $200 million.. but the trend is to create even more demand with smaller caps like $20-30 million dollars.

The reason for that is simply greed in my point of view because you create a very high demand which cannot be satisfied and pump the prices at exchanges. The CEO of Binance officially supports such small cap projects because of the big gains when listed. You can imagine what that means if you have very high demand from the public and just a small cap.. you have not enough tokens for sale or you must split them in tiny portions to serve all participants (like in the Beetoken sale with 0.1-0.2 ETH which created much hate by the community).. if you want.. but that is one main reason why more and more projects cancel public sales.

Any other reasons to cancel a public sale?

beside the unreasonable split into tiny amounts of tokens to satisfy the demand two more reasons (taken from Refereum email):

protect the community from scammers
Yes, especially with the high demand people went crazy to get some tokens, a paradise for scammers who try to catch people with emails where they offer some extra, bonus or whatever tokens, talk fairy tales about a new management decision and so on - they provide a Ethereum adress or other and invite you to transfer some money for their scumbags.. NEVER DO THAT!
right usage of tokens
It's obvious that many people just HODL the tokens for value appreciation, but often projects never intented such case. They want that their token is used in their ecosystem as payment, as gas to run the platform and therefore maybe a slow distribution later works much better..

Why is that so bad?

In public sales smaller investors get a chance to participate in an ICO because they usually starting with a minimal investment of 0.1 ETH up to 5 ETH and get a cheap token price. But if there is no public sale you have three options:

participate in Presale or private sale with much higher minimal investment of for example 30 ETH in Gimmer
you buy at a much higher price when the token gets listed on exchanges, especially overhyped projects
you forget the project (for a while)

You see there is a gap for the smaller investor now. If you can't afford the huge amounts of money for Presale or even if you could you must be a accredited investor (high income prove) or you get in at a multiple of the price at an exchange because of the very high demand the prices spike up like hell.. currently the much hyped projects is Wanchain. For me that means simply pass on the projects..

Is there light at the end of the tunnel?

I think yes, there are often other options if you follow the projects:

maybe Presale token got already listed on Etherdelta before major exchanges unoffically - BUT BE AWARE! it could end in a loss of money if there is a necessary exchange of tokens like with Wanchain ERC20 -> real WAN and they don't accept the tokens from Etherdelta!.. better example was Pundi X they canceled a token split because of the unoffical trading at Etherdelta before official listing.. that was a chance for investors who did not participate in the Presale or public sale..
you simply sit and wait until the hype on exchanges is over and the coin is dumped to ultra low prices. That happens especially with much overhyped projects soon after listing on exchanges. Remember EOS up to $6 .. down to $0.50, the same goes for TenX which you could pick up under $1 weeks later

What is great about that development?

Maybe as small investor you may think i'm stupid to ask such a question.. BUT what is great about the circumstance of high demand is that simply more and more people come into the cryptospace.. learning, get interested. So that means all the hype, the mania is good for something to attract people.. maybe with the wrong intentions in the first place but maybe later with lessons learned as serious users of cryptocurrencies.

What i experienced was a very steep learning curve if you get busy with ICO's because you need to learn all the things like using different wallets, different currencies, the mechanics how a transaction work, what is a private and a public key.. and that is basic knowledge to feel comfortable and is the foundation to understand what is that all about ..

So, maybe we see also soon a change in the mindset of some project who choose another direction like EOS did, with a public sale which is still ongoing for a whole year. There are many options.. but if they wanna just pump a coin then they will continue with low capped and hyped presales which could be seen as cheating and may result in interventions bei regulators. Because if big investors get a token 1/10th or 1/20th of the initial exchange price weeks before it should be really concerning for some institutions and also for the community to avoid just making the rich richer.

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