On September 21, B-Hive welcomed entrepreneurs, lawyers and technical developers for its monthly Fin & Tonic. Focused on ICO & Cryptocurrencies, the event offered a perfect platform for the B-Hive community to discuss the potential of initial coin offerings or token sales as the future of fundraising.
China's immediate freeze on ICO funding makes it an even hotter topic for debate, as excitement and speculation are growing in equal proportions across the industry. On one end, ICOs are finally lowering the barriers for startups to obtain funding without VC backing. On the other end, ICOs still raise a lot of concern for financial regulation, or the lack of it.
B-Hive’s blockchain lead Dave Remue kicked the Fin & Tonic off with a keynote focused on the advantages and disadvantages of ICO versus other sources of funding. Typically, in a token sale, a percentage of the tokens used in the project’s business model is sold to early backers of the project in exchange for legal tender or other cryptocurrencies. He not only tackled ICOs from a token purchaser or issuer’s point of view, he also touched upon the impact of ICOs to the industry at the large and the regulators’ - both in the US and the EU - take on cryptocurrencies and token sales in general.
Below are the highlights of his presentation:
Token sales are currently surpassing early-stage VC investments in blockchain projects. However, token sales are most often not to be mistaken for equity sales.
Best practice token sales are not marketed as investments with a high speculative upside, but emphasize example on transparency and the function of the network and the token as a clear utility.
In the future, token sales are expected to become better structured, with industry-specific profiles making up the project teams and the implementation of more comprehensive KYC practices.
SettleMint CEO Matthew Van Niekerk also shared his personal insights on their token sale for DataBroker DAO, a peer-to-peer marketplace for IoT sensor data. Launched on September 18, this early token sale is the first ICO campaign in Belgium.
An interactive panel discussion with Matthew Van Niekerk (CEO of SettleMint), Juan David Mendieta (Managing Partner of the European Decentralized Stock Exchange), Thomas Marckx (Co-founder of TheLedger) and Jo Vercammen (CEO of Orillia) followed right after the talks. Having opened the floor for questions from the audience, a good number of participants raised their enthusiasm for ICOs while some have openly expressed their caution due to the lack of a consistent European regulatory framework to support this emerging type of funding.
One can only speculate what lies ahead of ICOs, but one thing seems to be sure: ICOs are gaining stronger popularity.
Our next Fin & Tonic on 26 October is on Cybersecurity.