Messari’s Ryan Selkis Talks Terribly Overvalued ICO Tokens And TCR Benefits
Ryan Selkis “Many ICOs are Terribly Overvalued”
Ryan Selkis, the founder of Messari Token Curated Registry, declared that the ICO industry is fundamentally misused for fundraising purposes and that the speculative atmosphere around ICOs created a situation where many of them are “terribly overvalued.”
Selkis, in an episode of Invest Like the Best podcast titled The Crypto Barbell and Token Curated Registry, reiterated his position and argued the case of the Token Curated Registry (TCR) as a lasting solution to many ICO problems.
How TCR Counteracts Bad Actors
Messari’s company pioneers the TCR concept, which plays a role in creating a future where the crypto industry self-regulates and rids of fraudulent, flawed, or bad-faith ICOs.
The podcasts interview, Patrick O’Shaughnessy, described Messari as a distributed data library that has the potential to become a hybrid investor portal, peer-review system, self-regulator, and crypto asset director. During the podcast, Selkis stated that Messari may be able to address the threat posed by bad actors within the ICO space by providing incentives for good decision making.
Messari is based on the concept that TCR is a high-quality ICO list curated by entities and is weighed by the amount of Messari tokens they hold. Tokens receive value from the list’s quality and as a result, the token holder has a financial interest to ensure that the list is of high quality.
According to Selkis, this type of process is the only way in which the ranking system is not manipulated or rigged, which often occurs with other decentralized rankings in the space. The game theory in place is that users voting in their long-term self interest are more likely to choose ICOs that will add value to the list over the long term. Selkis further explained that to prevent regulatory authorities, such as the SEC, from negatively influencing the space and stifling business, the industry needs a self-regulation framework. He stated:
On a practical level, when the SEC takes action, they want to win cases, so they’re not going to go after the biggest projects because the biggest projects can afford hundreds of millions of dollars in legal fees and the SEC wants to be able to make examples of people. [We want to] to make it as black and white as possible, to being with, using what we call the NOVA principles – non-controversial, objective, verifiable, and actionable.
Selkis further clarified that to prevent redundancy on the list, Messari TCR token holders should not speculate concerning tokens, but should use them constructively. Messari users should be treated as accredited institutional investors, not retail “mom and pop” investors. This way, investors are invested in the game and in proper ICO regulation.
The ICO Issue
In terms of ICOs, Selkis stated that the believes that ICO markets have been distorted because they are a primarily being used as a platform to raise capital, attracting startups with no need for an ICO or an economic model for their token. As he stated,
“The problem in the industry right now is that the ICO markets as a whole has become a capital-raising tool primarily. In theory, these tokens are not supposed to be equity, or an equity-like instrument because that then makes them securities, which is an issue that everybody dances around.”
Ryan Selkis also revealed that despite the market’s success at ensuring transparent projects, TCR is able to identify and exclude 20 percent of ICOs that are mired in scams or outright fraud by asking and verifying necessary ICO information. The information the platform looks into includes members, legal location, existence of verified web assets, addresses, legal counsel, and management of token supply.
Selkis also noted that even though investors tends to treat TCRs as binary bets and entities, there will be a determination of different existing tokens, thereby causing them to be treated as a fundamental fact of investment due diligence.
Finally, Ryan Selkis ended the interview by noting that TCR will promote a flywheel effect, only if a critical mass of funds, exchanges, and regulatable entities enter an agreement on codifying a set of industry standards. Those who are interested in listening to the full podcast can do so here: http://investorfieldguide.com/selkis/.