I have been interested in Tokens + ICOs/IDOs for a very long time now.
And over the past 3 years, my team and I have developed dozens of these projects, coming across a lot of strong opinions about Tokens that, at first I agreed with, and then the more I learned and educated myself the more I disagreed with.
Eventually, I reached a point where I felt like the only reason these beliefs had become mainstream and commonly accepted was because “a lot of other people” agreed with them too.
So, I have some controversial opinions I’d like to share on Tokens after hundreds of hours immersing myself in the subject:
1. If you are wondering whether your project needs a token, it doesn’t!
Let’s be honest, most tokens are useless, pointless, and downright harmful. They serve no real purpose, solve no real problem, and create no real value. They are nothing but a tool for greed, hype, and speculation.
Why do so many projects launch a token then? Simple: to make the founders, team, and investors rich!
Think about it –
- If a project has a real product or service, they can charge for it directly.
- If a project has a legit market or network – it can reward users or contributors with various different incentives
- if a project is making money, it can share the love with its stakeholders & users.
I’m not saying that you shouldn’t even think about having a token.
I’m just saying that launching an ICO/IDO carries huge weight and responsibility, and must only be done with a specific reason and use case behind it.
2. Regulation is a MUST
Most tokens fail, some even dropping 99% in value, leaving their holders with nothing but regret and bitterness.
The problem with ICOs is they want to ride two horses. The use of the word “coin” implies that the tokens being sold are money. The phrase “initial coin offering” is deliberately evocative of “initial public offering,” which is about a company selling shares to the public. They want to ride the Bitcoin horse by saying, “We’re not a security—it’s just money,” but they also want to ride the “You’re buying into a future enterprise that will be worth a lot of money” concept that’s inherent in the sale of shares. That’s one of the big tensions with ICOs, that lack of clarity, and that’s something that needs to be fixed.
If scams are the norm in Web3, how can we ever expect to strive forward and expand Crypto use? This is where regulation comes in.
Contrary to popular belief, more regulation doesn’t stop mass adoption it actually accelerates it.
Regulation would require careful due diligence for all Token launches so at the very least, every project meets a standard of credibility and doxxing. This level of trust and control would open up the door to traditional investors, AKA, the majority of the population.
Zero regulation is a fast-track to millions of users losing money and continuing to label Crypto as a scam, blocking the true potential & impact that Blockchain can have on the world.
3. ICOs/IDOs are NOT for everyone
“Most people” do what “most people” do.
It is the classic tale of “I saw my friend make X on YZ ICO, so I have to invest too!”
Why do we keep ignoring the warning signs, the red flags, and common sense?
- Perhaps it’s because we are too eager to believe in a better future, in a world where money is fair, transparent, and decentralized.
- Perhaps it’s because we are too afraid to miss out on the next big thing, on the next Bitcoin, on the next Ethereum.
- Perhaps it’s because we are too naive to understand the risks, the costs, and the consequences. Or we simply don’t care.
That is why the term “accredited investors” exists in capital markets – to protect the average joe that doesn’t have technical knowledge or excess funds to make the right decisions.
Clearly what “most people do” doesn’t work.
So do something else.
How to move forward
The path to success is crystal clear. Let’s sum it up.
Genuinely interesting ICOs/IDOs have the potential of presenting great benefits for both companies and investors, providing funding for innovative technology and delivering great returns.
However, these projects are jumbled and mixed in with hundreds of other cash-grabs & scammy platforms, which
1. Kill their chances of a successful token launch.
2. Leads investors to have an overall pessimistic and critical view of the ENTIRE Web3 space.
When regulation steps in, only the top-notch, professional, and credible projects will be able to develop their Tokens offering better investment opportunities that protect investors and companies.
WIN-WIN.