With the rise in the heat of the concept of block chains, ICO fever is also high, the total amount of ICO funding in 2017 reached $7 billion, is crazy, and therefore attracted the supervision of countries, but ICO fever has not subsided, only in the first half of 2018, the scale reached twice the full year of 2017 as high as $13.7 billion. ICO is considered to be a more efficient and efficient way of financing than IPO, can help block chain start-ups overcome the predicament of lack of early funding, so let's see what stages of financing went through.
1 the way of financing evolution.
1.1 IPO
Initial public offering is the first time an enterprise or company sells its shares to the public. Of course, it is only after the cumbersome process of accepting, meeting, checking, feedback meeting, pre-disclosure, preliminary hearing, issuing and examining committee, sealing, post-meeting matters, and approving the issuance. The shortcomings of this method are The audit cost is high, and the company must comply with the SEC regulations, so the threshold for the start-up team is very high.
We all know that capital is also a crucial factor for a start-up company. Now the famous Internet giants Ali and Tencent were also beset with money. They couldn't get financing through IPO on the scale of the company. Ma Huateng almost sold Tencent for 500,000 yuan that year, if not After winning the venture, we will lose two great companies today.
1.2 Crowd-funding
In recent years, there has been a crowdsourcing approach, in which project owners can publish their plans, and investors can choose whether to participate, while the return on investment is to buy products at a lower price. This approach can solve the funding problem for the project side, but it is extremely unfair for investors. Early investment on Contribution to the project is tremendous, and after the success of the project investors get returns and investment is not proportional.
1.3 ICO
ICO is the first currency issue, early participants can get the initial generated encrypted digital currency as a return, the project side will be converted into coins to obtain funding support project development, compared with the IPO can be more convenient to obtain funds, compared with the public fundraising investors can also get greater returns, however, because in the fixed There are no corresponding rules on price and issuance, so it is easy to have the problem of excessive circulation, leading to price decline.
1.4 ETO
A rapid small-scale fund-raising approach to the community to help excellence block chain projects quickly establish and start communities, and to promote community management and oversight models. This model is feasible after practice. At present, two projects in the first stage of ETO have been completed. They complete the fundraising in 51 seconds and 54 seconds respectively, which not only help the project to obtain the funds needed, but also help the project to establish a community.
2、the value of ETO
We talked about the financing of ICOs earlier, and this rule has brought about a huge bubble, with a single project financing of up to 4.1 billion dollars and a total financing of more than 200 billion dollars in less than two years. Investors are in a state of panic as a result of a large number of projects selling the ether currencies that ICOs have acquired and the market turns bearish. In addition to bringing funds to the project side, the ICO has not reached a consensus on the block chain, we have to consider the necessity of this model.
2.1, help the project side to solve the previous capital problems.
For a project, it doesn't really need a lot of money in the early stage, but the current ICO method is to raise the whole project funds at one time, which is not scientific. It is not necessarily a good thing for a project to have such a large amount of money in the early stage of the project, many teams have raised a lot of money after the project. Then the project was developed. It may be more scientific to combine multiple rounds of financing in traditional markets. And if you want to get funding in stages, then the project side will be more focused on how to do the project, after all, only the project is ready to get late funds.
2.2, help the project side establish a community.
Community consensus has always been an important part of the block chain. However, under the current ICO approach, it is difficult to reach a consensus that the community really wants to reach. The only consensus that can be reached may be to make money. But it's not good. Under the ETO model, if you want to get the investment quota, you must complete the related community construction tasks, and you must know enough about the project, then answer the questions and get the points. Then you can get the investment quota after meeting the corresponding points. This will help the project side to gather a group of people who really understand the project in the early stage, and they can do it for them. Early project development provides more than capital to increase the success rate of the project, rather than selling off the chips in the hands of the project after a bit of news in the market.
Of course, this is also a healthy model for investors, after fully understanding the project to make investment decisions, and then with the project side to tide over the difficulties encountered in the development. Plus ETO controls everyone's investment quota, so it's impossible to cut leeks, so investors can get the maximum return on the success of the project.
At present, the mainstream currencies in the digital encrypted money market have fallen nearly 90% from last year's high, and the ICO market has been cold, but this does not mean that the block chain industry can not, I always believe that the block chain is valuable, and after the bear market baptism, the real valuable projects will remain. Investor Bill Miller bought a lot of Amazon stocks between 2000 and 2005, and the Internet was in the same boat of blockbuster chains as it is today, where everyone said there was a huge bubble, and Miller saw the real value of the Internet, and Amazon's performance proved Miller's judgment correct. Yes, this value investment led Miller's fund to defeat the S&P 500 for 15 consecutive years. Miller retired in 2007 and re-placed Bitcoin in 2010 because he saw the value behind the block chain.
ICO has been impracticable, even now there are a large number of leek cutting phenomenon in the primary market, and the breaking of the listing is common. But this does not mean that the block chain industry has come to an end. Projects can no longer get financing. We need to get financing in a healthier way. ETO is the perfect way to help project owners get financing and help them build communities to protect the development of the project. Air.
3, no sickle before ETO, no leeks, and great room for appreciation.
ICOs usually go through the stages of cornerstone wheel, private placement and public offering, while angel wheel or cornerstone wheel is usually only open to institutions, retail investors generally can not get it, and the price they get can even be as low as 50% of the private placement round, thus creating natural conditions for leek cutting, and even to participate in the latter stage of private placement or public placement round. They will be cut into leeks, not to mention retail investors in the two tier market.
But in the ETO model, early community participants get the equivalent price of the cornerstone wheel in the ICO, and because of the restrictions on the amount of investment per person, there is no big institutional households. Plus the funds are raised in batches, the price will rise steadily with the project development process, so that the price has a solid foundation of value. Coupled with the small scale of early financing, the market value is also low, and the later appreciation will be greater.
After entering the currency circle, I have participated in many ICOs, but often only focus on the price of tokens, even if there is a community, then the most discussed is this, and rarely discussed items. And once tokens are available, people often sell their chips in the first place, because it is clear that the price is determined by the large holders of chips, and according to past experience is also early to make a profit. But I felt totally different when I participated in the first ETO project. The community was more concerned about project-related issues, because there was no organization to worry about being cut leeks. Community members contributed to the development of the project together, forming the value of the project in the process, and the corresponding price. It has the support of value.
The ETO model gives the early dividends to the community members who contribute to the project, rather than the institutions that arbitrage into the next ICO after listing. The ETO model allows the project to develop healthily and investors to get the biggest return. From the two ETOs'fundraising, investors are still More optimistic about this model. The future block chain project will become more and more difficult to raise funds through ICO, and ETO is the future.