This year is the year of ICOs, with multiple ICOs reaching more than 30 million dollars (Basic attention token, Status.im, TenX, Bancor). As ICOs start to get more popular, different financing models appear, with EOS being that most special - it has a 1 YEAR ICO. EOS takes on a whole new approach - in fact, a whole new way of thinking things! This article reviews the current ICO models, and how EOS will be different. EOS ICO starts on Monday, 26 June 2017.
Traditional Model
The most traditional form of ICO is having a target, eg 35 Million dollars and an open address for contributions. Once that target is reached, no additional funds will be accepted. In this model, the cap is the most important number, very much akin to traditional funding where you ask VCs for a set amount of money. Usually, this target is calculated based on how much the team needs to complete the project - similar to KickStarter project goals.
The Basic Attention Token used this model and the goal was raised within 30 seconds! T
Advantages
- Clear number of total Tokens
- Investors are incentivized to buy or lose out
Disadvantages:
- Max cap on how much is raised
Traditional Model +
Bancor saw the success of many ICOs, especially the fact that is sold out within minutes. They revised the model to give an 1 hour period where all funds are accepted. This effectively gave it an unlimited cap during the 1 hour period. They were heavily criticized for adopting this model because of the lack of a hard cap, however, they received a lot of funding as well.
Advantages
- No Max Cap
- everyone gets a chance to participate
Disadvantages:
- Investors uncertain of total tokens
- Unpredictable income
- Limited duration of sale
EOS model
During the first five days, Block.One will distribute 20% of the tokens, while the remaining 70% will be distributed over the next 350 consecutive days. After the initial five days, investors will be able to purchase a maximum of 2 million tokens a day.
EOS takes a totally different approach - it runs the ICO for one whole year, has a known number of tokens and doesn't have a max cap. EOS achieves this by setting aside a certain number of tokens to be distributed each day during the year. The tokens would be distributed in proportion to the total amount received during that day. For example, if person A and B invest:
Person A: 2 ETH
Person B: 8 ETH
then Person A will receive 20% of the daily EOS amount and Person B will receive 80%. This strategy totally changes the landscape. The market now sets the price of EOS and the market will have a whole year to determine its price! This also discourages short-term traders as there will always be a daily supply of EOS to compete in the marketplace.
Advantages
- No risk of missing out
- Encourages long-term investors
- Gives market 1 year to figure out a good price
Disadvantages
- No Rush - no Fomo
- High potential for price variation during the sale
Information
Token sale starts Monday, 26 June 2017 - Visit https://www.eos.io/information for more information
Definitely a game changer for investors and the companies. Companies will love this format because they maximize income...investors will hate it because they get no 2-6x returns like normal ICOs.
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I Definitely need to read up on this more. It's very interesting for sure
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This was definitely something that caught my attention. I feel like everyone will have an opportunity to invest; and better yet study up on the project before investing. Game changer indeed! Thanks for posting again brotha man👍
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Ok, after you have explained so much i was interested to buy it?
However, how much have you buy in?
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It might be an over-correction from the traditional model, just 1 month of daily proportional sales would do the job of giving people a fair chance of getting in on it. It will certainly be interesting seeing how it varies day to day and how the price moves throughout the ICO.
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They did the same strategy for Bitshares with Angelshares. It was the biggest and most successful crowdsale of it's time. It actually set the standard.
Although it didn't last a whole year, that is new.
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It's a really good idea on their part, one I've thought of since the first time I heard of ICOs, and I sure hope more ICO's adopt this model.
If they don't I worry Ethereum might begin slipping.
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Thank you for the EOS video. You have a knack for explaining highs to laymen like myself. I'm feeling less lost, I appreciate that. So, if this decentralization the reason for such high value? Cuts out the corruption and evenly distributed it?...Or am I way off base?
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Thanks so much! your correct, everything is open and can be seen by everyone!
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I believe this ICO model will inspire other projects to launch ICOs in a different way. Certainly the projects who are serious and are in crypto to change the world instead of making a quick buck.
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Thank you! Your videos are really helpful for navigating the huge mess that are ICOs. This is the first ICO I'm actually tempted to invest in. Giving investors enough time to actually do their research and not just blindly invest is great.
It certainly helps that the project looks awesome aswell.
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excellent article keep it up
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That is quite an unusual approach I should say. It hasn't been done before and I like that.
I believe Bitshares, Steem and EOS have something in common. They all use a strategy to becoming the fastest, the most scalable and the most used blockchains out there.
I'm really curious about how this ICO will go, really fascinating project to be honest.
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Only uncommon for how long it is lasting but then look at Agoras which has a crowdsale for over a year and soon Ohad will be raising the price.
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Thank you for sharing all this information with us! I already start to invest with this ICO, and planning to do it all this year :)
It's a great opportunity for all of us that are aware of the future of Crypto and smart investment!
Good luck everyone and thank you again!
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