Six Different Options to ICOs
The summer of last year brought us the ICO, but by 2018 – the acronym lost its power due to regulations, scams and other reasons we don’t need to mention. ICO became a word that basically meant, not to be trusted. In the place of ICO, people attempted to replace it with other words that sounded less dangerous, but people picked up on that too. There are several different options a person has today though, thank god.
ICOs are Becoming a Thing of the Past
It’s like when new music movements come around – bands rush to become a part of the new genre, or they attempt to stay away entirely. There is something to be said about the ICOs as well, everyone is now in them- most are trying to escape them now, however. They are creating new euphemisms to try to get around the word ICO.
Some of the other names are being used in an attempt to avoid legal ramifications. Others are attempting to ruin the name for everyone entirely. Because ultimately, no one wants to be associated with the scammy nature of ICOs. There are also crowdsales that are use alternative names in an attempt to give people a genuine way to raise capital for their new ICO. The following are six of these new ICO alternatives.
Security Token Offerings are fully regulated ICOs that go forth with the blessing of the SE. They fall into different categories like Reg D and Reg S, which are those outside of the USA. The Reg A+ means they are companies getting support from major retail investors. The SEC is very harsh when setting standards as to what constitutes a company being an A+ rating.
The Interactive Initial Coin Offering is the first of its kind in a paper written by Vitalik Buterin as a better ICO model. It’s used for the sort of FOMO and results in humbler investing by participants. Companies like Kleros are using the title of IICO where contributors have a maximum cap. Also, if the total limit surpasses what is promised, the Ether will be returned to the investor. It gives everyone a chance to buy tokens.
Initial Supply Auction
This is where the price starts relatively high, and then ticks down lower and lower as long as the auction is open. Anyone who purchases at this level will be able to purchase once they feel the price is fair. There have also been several attempts to ensure everyone has a fair chance to get involved on the IICO of their choice. The risk is they could be viewed as potentially boosting coffers instead of creating a truly democratic method of functionality.
There is a Simple Agreement for Future Tokens that for overcoming the risks normally associated with ICOs. And to avoid this, investors can contribute knowing that the tokens they receive will actually be usable in some effective manner. It helps protect people from investing in useless tokens altogether.
Already common, Cryptocurrency Airdrop are a giveaway from the company. They help to distribute a small number of tokens for free to the investors or people who want to get involved. Even a majority of the tokens can be given away, knowing that the model-based tokens will be given away, but some will be reserved by the team trading them.
The last alternative is that of no ICO at all. It sounds kind of crazy, but it’s worked for some of the biggest currencies. It’s by far the most trustworthy and takes a lot of confidence on the team starting the company. Litecoin is an example of a company that had no ICO, look at how good they did and are still doing.
As for you, which of the various options do think is the fairest of the bunch? Let us know in the comments below please.