A new Initial Futures Offering (IFO) from CoinFLEX, a cryptocurrency futures and lending exchange, will be launched on Wednesday the 17th of July. CoinFLEX is backed by popular investor and Bitcoin bull, Roger Ver, as well as crypto investing firm, Polychain Capital. It has also been announced that the IFO would be Polkadot’s DOT.
Mark Lamb, CoinFLEX’s CEO has said that this might be previously uncharted territory for the exchange. According to him:
“This is the first time we’ve made a futures market for a coin that doesn’t actually exist yet. It’s a determiner of the price before the asset exists.”
CoinFLEX launched four futures contracts including Bitcoin (BTC), Tether (USDT), Bitcoin Cash (BCH) and Polkadot (DOT). The FLEX, CoinFLEX’s own exchange token, was then launched this month. The upcoming IFO is the first time the firm will be requiring prospective participants to purchase the FLEX. According to the plan, at least 300 people who hold FLEX tokens will have rights to a discounted DOT price at $75.
An unnamed source has expressed that since the asset itself has yet to launch, this move matches the general rates for DOT contracts over-the-counter. The source said that there’s a planned $1.2 billion valuation proposed by Gavin Wood, the creator of Polkadot and Ethereum co-founder. For this valuation to be actualized, the price of a token would still surpass $100 in the near future.
Before now, the Web3Foundation, the Switzerland-based firm building the project, was able to secure a $15 million investment from three Chinese firms for an undisclosed number of tokens. The specific firms are unknown and CEO Mark Lamb has also not revealed.
Giving more details, Lamb has explained the requirement of locking up FLEX and also the expiration of the IFO Contract. According to him:
“In order to buy at the presale, you need to lock up a thousand FLEX. We don’t know when they expire, because we don’t know when mainnet is going to launch.”
FLEX tokens can also be used to gain access to certain opportunities in the ecosystem as well as paying exchange fees, like the BNB token is setup to do. Lamb has also said that in the next few months, other futures including BNB and Tron would be available.
According to Emmanuel Alamu, the Head of Business Development at CoinFLEX, IFOs are great for the market as a way to measure in-market pressure. Alamu also said:
“IFOs are an innovative way for the market to develop price discovery and act as a barometer on the progress of these blockchains. We can handle dual margining and hence, enact rules that ensure both sides of an IFO trade will deliver their respective side of the digital asset.”
There are only a few futures contracts that relate to assets that haven’t been launched as the majority are for already traded assets. However, it would seem like there might be some interesting building for futures contracts on assets not yet launched.
Polkadot IOUs are now available for BitForex users for retail investors interested in DOT tokens.