Winding Tree is preparing for its ICO this Thursday, February 1. The announcement is exciting news for those who have been following the startup over the past few months. The original ICO was planned to take place in November, but changes in Swiss regulations resulted in a delay.
Winding Tree is a nonprofit startup that aims to bring blockchain technology to the travel industry. They’re creating a B2B network that allows suppliers to provide flights and hotels to distributors without the associated costs. Let’s have a look at the finer details of Winding Tree and their upcoming ICO.
Figure 1 Via Winding Tree
Token Generation Event
Winding Tree is referring to its ICO as a Token Generation Event, or TGE. After discounted presales, Winding Tree has already raised around $1.5m. The primary TGE will take place on February 1, and run for a total of two weeks. Tokens will be purchased using ETH.
Investors will be purchasing Líf tokens. The Líf token will facilitate all transactions on the platform. Suppliers and distributors will buy and sell flights using Líf tokens. The token is an ERC827 – an extension of the traditional ERC20 token. They will be storable in both Jaxx Wallet and MyEtherWallet.
There is no cap on the money that can be raised; market forces determine the number of tokens distributed. You will receive tokens based on the percentage you invest in comparison to the overall market investment. The lack of a hard cap prevents whales from purchasing large segments of the market share. No additional Líf will be generated after the TGE.
There is a soft cap of $10m – this is the most that Winding Tree will receive initially from the TGE. The rest of the raised capital will be put into a Market Validation Mechanism (MVM). This system will hold the excess ETH raised during the TGE. Over a 24 to 48-month period, the MVM will allocate funds to the Winding Tree team. You can also sell your tokens back to the MVM during this initial period if you are unsatisfied. The price you receive is based on the following equation:
Figure 2: Via Winding Tree
As you can see, the earlier you sell back, the more you receive. After 48 months, Winding Tree receives the remaining balance. This mechanism is a security net for investors.
As there is a hard cap on the amount of Líf Tokens generated, the currency is naturally deflationary.
Winding Tree: An Overview
As blockchain technology continues to disrupt markets, it was only a matter of time before the travel industry became a target. As an organization, Winding Tree is trying to cut out the middleman. Using blockchain to distribute flights and hotels cuts down on the associated costs of international currency exchanges and commissions.
Winding Tree already has several high-profile partners: Lufthansa, Swiss, Air New Zealand, Austrian, Brussels Airlines, Eurowings, and Nordic Choice Hotels. The amount of existing partnerships is promising for a cryptocurrency in such an early stage of development.