Stranger Token Things

Monday, November 20, 2017

Unreported and Extended Token Sales

Last week, the TokenData team took a short hiatus from the newsletter and crunching token returns. For those of you who missed us and pictured us working in a worn down Regus office whiteboarding and roadmapping away – we have to disappoint you – we spent most of it catching up on the latest season of Stranger Things 2 (attention to all fans, click here). 

For those not in the know with Netflix’s finest show about nerdy teenage angst, it’s a show that revolves around mysterious disappearances and really awesome 1980s mullets that give the hairdo of a certain crypto fund manager a run for its money. Before we head to our favorite Bay Area barbershop for a new cut, we want to shed a light on the mysterious disappearances and postponements of token sales that have come to our attention lately:

TL;DR: Many token sales have not reported if they were successful 

Full Read:

Unreported Token Sales

We have noticed that an increasing amount of teams/projects do not report the actual results of their token sales. The number of token sales in Q4 has already surpassed that of Q3 but at the same time a relatively large group of projects (44%) have not reported the final status of their token sale or the amount of capital raised – even though the sale period has ended. One interpretation is that the “ICO hype” has attracted a larger share of mediocre to outright low quality projects that end up being unsuccessful. The mystery that remains is how much capital these unreported token sales have raised and/or what has happened with that capital…

Postponed & Extended ICOs
Additionally, out of the 340 ICOs that are currently active/planned more than 25 ICOs ended up postponing their start date since the 1st of November and 61 ICOs have extended their sale period. The reasons sent to us or posted on social media ranged from serious (e.g. more legal advice needed) to borderline absurd. For example – the Bitcoin Segwit 2X fork was often cited as a reason to postpone/extend, although we have our doubts about the strength of that argument given that most sales raise ETH. Another gem is that one token sale told us that “Due to a high level of interest, we have decided to extend our pre-sale through January 15th, 2018”. We advise this token sale to think harder about why a long sale tends to be a bad sign

Weekly Update

  • NEW on TokenData.io: 
     
    • Token Analytics (BETA) – We just launched a new analytics section on TokenData. The first tool that we’ve built is a news aggregator that plugs into all news channels and chat applications for a token sale. If you’re sick and tired of signing up to all telegram/slack/discord channels to assess a project, this tool will make your life much easier. This is a first release, so any user feedback is more than welcome! 
       
  • Interesting Events:
     
    • ICO Financing @ U.C. Berkeley: Our friends from Blockchain @ Berkeley are organizing a one-day conference on best practices for token sales. They have a stellar lineup including top fund managers, crypto focused lawyers and the S.E.C. And maybe, we will be there scurrying around as well handing out TD T-shirts and stickers 😉
       
  • Weekly Token Data:
    • Nr of completed ICOs (wk/mo/ytd): 11 / 19 / 316
    • USD Raised (wk/mo/ytd): $62M / $314M / $3.8B
    • Calendar: 50 ICOs this week

Token Sale (ICO) Calendar

Mon (11/20)

  • Anonym – Platform to create private societies and social media groups
  • Connectius – Blockchain SaaS solution for e-commerce
  • CrowdWiz – DAO: crowd-managed crypto funds
  • DataTrading – DataTrading provides a set of analytical and forecasting tools for trading in stock and crypto exchange markets
  • FundRequest – Platform for rewarding open-source contributions
  • HashHive – Invest in a innovative data center of cloud mining
  • injii Access Coin – Connecting creators with charities
  • MediBloc – Healthcare information platform – a personal data ecosystem for patients, providers and researchers
  • Naga Group – Platform for decentralized trading, investing and education in financial markets, virtual goods and cryptocurrencies
  • Open Source University – Distributed education and certification platform, operating on the public Ethereum blockchain
  • Props – Decentralized video application
  • Propthereum – Asset backed cryptocurrency
  • SRG – Loyalty program for online games

Tues (11/21)

Wed (11/22)

Thu (11/23)

  • BASIS – Investment in a building material company
  • BREM – Real estate aggregator and transaction service through which clients can conduct and register real estate transactions
  • FUELD App – Global automated service for car refuels (charging)
  • Genesis Water Token – Providing clean reusable water without chemicals for our world’s population
  • Makersmarks – Product identification and anti-counterfeit platform
  • Robo Advisor Coin – Robo Advisor for cryptocurrency forecast and news
     

Fri (11/24)

  • BitRent – Platform to attract commercial and residential property investments

Sat (11/25)

Sun (11/26)

[addtoany]

Leaving Tokens on the Table

Monday, November 6, 2017

Day 1 Token Trading Analysis

For those unfamiliar with the land of academic research in “traditional” finance, the “Day One” trading return for IPOs (aka “trading pop”) is a mythical creature described in thousands of articles written by fledgling PhD students and the occasional Nobel prize winner. Long story short: the starting question is whether or not companies leave money on the table when offering equity through an IPO. Whether an IPO is significantly underpriced by underwriters to draw interest from IPO investors by luring them with “quick and easy” returns. If this sounds familiar to anything happening in crypto right now, you’re reading the right newsletter. One way to answer a part of this question is by measuring the first day trading return of IPO issued shares.

Looking for analogs between ICOs and IPOs, and clearly not familiar with the unchartered waters of ICOs and raucous crypto exchange trollboxes, dozens of crypto academics (actual academic people at renown universities) have contacted us over the past months for analyses on the day one trading returns for ICOs. Although we’re certainly no academics and have no interest in debating the statistical significance of any of our analyses, we’ve done the research over the weekend and expect our honorary degree to be mailed to us directly.

Here are the results:

TL;DR: There is a “trading pop” but it’s been trending down…

Full Description:

The dataset consists of all ICOs that completed fundraising in 2017 and whose tokens started trading on exchanges. We collected all the data for the first week of trading for these tokens and filtered out any ICOs with an initial fundraising effort of less than $1M. We believe that the latter category of ICOs and their tokens are not frequently traded and more prone to distortions on the first day. The “Day-1 Return” section shows the return multiple of tokens compared to the ICO issuance price on the first day of trading. The “Current Return” section shows the return multiple at the current price.

The results show that we measure an average day one return for all tokens of 2.5x and a median return of 1.4x. What’s more interesting than the outright level of returns is that the returns have been trending down. The median day one return in the current quarter is 1.1x (10%) compared to an almost 2x return in Q2 17. It could be a reflection of the ICO market cooling off and less trading interest but it could also be a reflection of decreased project quality. We haven’t completed our analyses of the variables behind this trend, and are happy to receive any tips on how to measure the driving factors of this trend. Until we have, we’ll leave it up to you to think about!

Weekly Update

  • NEW on TokenData.io: 
     
    • Token Analytics (BETA) – We just launched a new analytics section on TokenData. The first tool that we’ve built is a news aggregator that plugs into all news channels and chat applications for a token sale. If you’re sick and tired of signing up to all telegram/slack/discord channels to assess a project, this tool will make your life much easier. This is a first release, so any user feedback is more than welcome! 
       
  • Weekly Token Data:
    • Nr of completed ICO’s (wk/mo/ytd): 41 / 13 / 350
    • USD Raised (wk/mo/ytd): $165M / $46M / $3.6B
    • Calendar: 25ICOs this week

October 2017 Token Sale Results

Token Sale (ICO) Calendar

Mon (11/6)

Tues (11/7)

Wed (11/8)

Thu (11/9)

Fri (11/10)

Sat (11/11)

[addtoany]

Diminishing Token Returns (cont)

Monday, October 30, 2017

A Graph of Diminishing Token Returns

Last week‘s update about diminishing token returns prompted a number of questions and comments. One of the most recurring questions was if we could plot the historical values of the hypothetical token portfolio and show it against ETH and BTC. In anticipation of a large research piece to be published later this week – we wanted to share with you the significant graph below. 

A portfolio constructed of all the ICOs completed in 2017 returned 8x its value (i.e. invest $1 in every single ICO). Compare this with a ~3x return for portfolios of ETH and BTC that have the exact same timing (i.e invest $1 in ETH and BTC at the same time as the ICO) – the absolute outperformance of tokens is evident. However, the token portfolio displays much more volatility on first sight and is further away from its peak level than ETH or BTC. The token portfolio retraced quite a bit (-40%) from the July peak even with new tokens being added since.

Pairing this with last week’s observation that new tokens issued in Q4 have been underperforming in USD, ETH and BTC terms we believe there are signals that that the “token hype” in terms of returns is over. Stay tuned for more…

Weekly Updates

  • NEW on TokenData.io: 
     
    • Token Analytics (BETA) – We just launched a new analytics section on TokenData. The first tool that we’ve built is a news aggregator that plugs into all news channels and chat applications for a token sale. If you’re sick and tired of signing up to all telegram/slack/discord channels to assess a project, this tool will make your life much easier. This is a first release, so any user feedback is more than welcome!
       
    • My Tokens (BETA) – You can now create lists of token sales and token returns by creating an account on our website. We’re iterating quickly and adding new features in the coming weeks. Please send us your feedback!
       
    • Token Jobs (tokenjobs.io) – We’ve launched a free and crowdsourced job posting board focused on crypto projects. Whether you’re a dev looking to move into the space, or you’re a project looking to attract the best talent after completing an ICO – look no further!
       
  • Weekly Token Data:
    • Nr of completed ICO’s (wk/mo/ytd): 24 / 62 / 306
    • USD Raised (wk/mo/ytd): $239M / $638M / $3.4B
    • Calendar: 32ICOs this week

Token Sale (ICO) Calendar

Mon (10/30)

Tues (10/31)

Wed (11/1)

Thu (11/2)

  • Confideal – Business deal platform
  • Smartlands – Tokenization of agricultural assets
  • UTRUST – Payment platform that empowers buyers to pay with cryptocurrencies while providing a purchase protection mechanism
     

Fri (11/3)

[addtoany]

Diminishing Token Returns

Monday, October 23, 2017

Last week we showed a simple table in our newsletter that showed the relative performance of ICO-issued tokens versus Bitcoin and Ethereum (conclusion: ~30% of tokens have returned more than both BTC and ETH since the respective ICO dates). We received many requests for a more granular take on this data, so we did a full analysis of overall buy-and-hold returns (i.e. buy $1 of tokens at time of ICO and hold until now) for all tokens in our database and compared them with simultaneously timed investments in ETH and BTC.

The table below shows that – on average – ICO tokens have outperformed both ETH and BTC (14x return vs 12x and 4x). Looking at the returns sorted by the ICO date, we see that returns for all cryptocurrencies (tokens, ETH, BTC) are much higher for the Pre-2017 and Q1 2017 periods than for Q2 2017 onwards. This isn’t surprising given that the major bull market rally took place after Q1.

What does deserve a closer look is how the relative outperformance has evolved during 2017. On average, tokens outperformed the two base cryptocurrencies for the first 3 quarters of the year. And – although time and data are very sparse – this outperformance trend has come to a slight halt right now. The 4 ICOs that took place in October and whose tokens are being traded, have underperformed both ETH and BTC. Moreover, BTC is outperforming both tokens and ETH for the first time. While it’s too early to proclaim that “winter is here” the TokenData team will keep you up to date in the coming weeks as this unfolds.

Weekly Updates

  • NEW on TokenData.io: 
     
    • Interview with Amentum – When we heard about a new crypto fund with an explicit mission statement of being “crypto-first”, we wanted to hear more… Read our Q&A with the Amendum team about its founding, their crypto fund working group and diversity in the blockchain space.
       
    • My Tokens (BETA) – You can now create lists of token sales and token returns by creating an account on our website. We’re iterating quickly and adding new features in the coming weeks. Please send us your feedback!
       
    • Token Jobs (tokenjobs.io) – We’ve launched a free and crowdsourced job posting board focused on crypto projects. Whether you’re a dev looking to move into the space, or you’re a project looking to attract the best talent after completing an ICO – look no further!
       
  • Weekly Token Data:
    • Nr of completed ICO’s (wk/mo/ytd): 24 / 53 / 306
    • USD Raised (wk/mo/ytd): $130M / $372M / $3.1B
    • Calendar: 25ICOs this week
    • Crypto Celebrity of the Week: Scott Disick (tip: if you’ve never heard of him, keep it that way!)

Token Sale (ICO) Calendar

Mon (10/23)

Tues (10/24)

Wed (10/25)

Thu (10/26)

Fri (10/27)

Sat (10/28)

Sun (10/29)

[addtoany]

Q&A with Amentum: A Crypto Fund with a Mission

Monday, October 23, 2017

Supporting TokenData since before it was even called TokenData, Steven McKie (the guy behind BlockChannel) recently announced the launch of a new investment fund called Amentum. When we looked at Amentum’s twitter feed, all we saw was the fund’s mission statement — “A crypto fund focused on diversity, security, interoperability, and sustainability for blockchain-based protocols and applications.” What follows below is our discussion with the Amentum team about how they are aiming to create not only a fund, but also an ecosystem and tools that will benefit other crypto investors.

Q: Can you give us a quick overview of Amentum as a fund and your team.

A: We are a cryptocurrency investment fund that will focus both on cryptocurrency protocol investing as well as ICO. We expect to close our fundraising by Q1 2018 and around 70% of our fund will be deployed into publicly traded cryptocurrencies and about 30% into ICOs whose teams we will help and work with as advocate investors for the protocols and crypto-related projects we invest in. The fund will assume passive long positions, and adjust our holdings based on prevailing market sentiment and psychology.

Our team consists of the following people:

Steven McKie is a crypto veteran of 5 years. Previously Head of Growth and Product Content at Purse, he expanded Purse’s operations with value-added partnerships in multiple regions and assisted in building out the bcoin brand, site, and team. McKie also hosts and edits BlockChannel, a podcast and educational publication focused on Bitcoin and Ethereum.

Kyle Forkey is an entrepreneur and engineer; previously a project manager for a multi-million dollar custom estate contracting company in Wellington, FL. His latest venture is a firm specializing in equity-oriented ICOs, with an interest in public/private infrastructure investing. He’s helped projects successfully raise millions of dollars for multiple projects. He received his B.S. in Civil Engineering from Old Dominion University.

Q: With new cryptocurrency funds being announced every week, what differentiates Amentum?

A: We — at Amentum — are Crypto first. We’ve been active investors, engineers and consultants in the cryptocurrency sector for the 5+years. Many of the newly announced funds are run by Wall Street folks who have gotten into crypto fairly recently and are catering to the immense demand from traditional investors who have heard about the large returns in the sector. They bring new money into the system, but not necessarily the technical skills needed to evaluate blockchain protocols and or crypto-economics. We believe that our own experience and network in the crypto community will make all the difference in volatile or bearish markets and in deal-sourcing.

Q: To what extent do you work with other funds and/or seek advice from (relatively) more established crypto fund managers?

A: As cryptocurrencies emerge as a new asset class, new standards need to be established for regulation, reporting, due diligence and deal flow sourcing. That’s why it’s important for cryptocurrency funds to collaborate rather than compete and create a sustainable investing ecosystem. With this in mind, Steven McKie (Amentum) and Kevin Zhou (GP at Galois capital, former head of trading at Kraken) created something we simply call the ‘Crypto Fund Working Group’. The idea behind the working group is to set industry standards for the nascent space of cryptocurrency funds. More than 25 new cryptocurrency funds — all run by people with cryptocurrency backgrounds — are now part of this working group. Their team hopes that by being proactive with open collaboration, we can collectively enrich the industry as a whole by strengthening its network effects, and creating a more egalitarian environment ripe for innovation.

Q: One of the recurring topics we hear from new crypto funds, but also institutional investors that are wary about moving in quickly, is a lack of standardized tools and/or custodial services for cryptocurrencies. What’s your take on this?

A: Ultimately, we expect most funds to invest in a large variety of protocols and tokens, and not just the top 5 by network value — Crypto investing will become a multi asset industry and it will be important to have a securely audited, open source wallet/cold storage setup that is industry standard. Same as with the crypto fund working group, our mentality is to simply build something that we need but isn’t there yet. That’s why we’re currently working on a wallet service under the name TokenStandards in collaboration with Mason Borda of TokenSoft.io. Tokenstandards will be a secure wallet platform for multiple coins, and the security standards and workings will be audited by third parties making it useful for custodial services and private investors. Our goal is to open source these solutions and distribute them broadly throughout the crypto investing space in an effort to create a security-first mindset for the many burgeoning “crypto funds”.

Q: Amentum’s mission statement says that you’re focused on bringing diversity, security, interoperability and sustainability to the blockchain ecosystem. Would you like to explain what you hope your role will be with regards to the first pillar: Diversity

A: Our team consists of GPs from different cultural, ethnic and professional backgrounds. Ultimately, most cryptocurrency investors want this asset class to go mainstream and we believe that diversity is very important to increase positive awareness about crypto. With that in one of our GPs (Steven McKie) was on the diversity board of the Scaling bitcoin conference at Stanford with the goal to bring minorities and women into the industry and familiarize themselves with our community. From a more practical perspective: The crypto development community is truly global, and whether it’s working with, or investing in other teams, we believe that our firm’s focus on diversity can increase the likelihood of others also in the industry doing the same. Diversity of mind and of the teams we invest in will help ensure teams are flexible: with a healthy combination of perspectives that increase the likelihood of success while promoting an open ecosystem ripe with equal representation.

Q: Is there anything the crypto community and/or readers can help Amentum with?

A: We’re always looking for people and funds wanting to work with us via the Crypto Fund Working Group. So, if those initiatives or our fund interests you, feel free to send Steven an e-mail on [email protected]!

[addtoany]

Decentralized Trading & Networked Liquidity: Q&A with Radar Relay

Sunday, October 22, 2017

One of the biggest questions that comes to mind in the token sale boom is how and where new tokens will be traded. Decentralized trading protocols and exchanges such as 0x and Kyber are being developed as an alternative and complement to centralized liquidity providers. In this interview the team behind Radar Relay talk about launching an orderbook on top of the 0x protocol, and the opportunities in decentralized trading.

Q: For those unfamiliar, what is Radar Relay?

A: Radar Relay maintains a 0x order book and provides a simple interface to facilitate signing, finding, and filling 0x orders via browser interface.

Q: How did Radar Relay start? We know you are an anonymous team based in the U.S. but can you give us some background to the team, relevant experience and how you have been working on this project.

A: Radar Relay was born from our bad experiences with centralized exchanges (Mt. GoxBitfinexCryptsy, etc). We began work on Radar Relay as soon as the 0x team released their protocol. As a team of fewer than 10 people we have over 20 years of combined blockchain industry experience amongst us, which has helped navigate through these uncharted technology frameworks.

Our anonymity is part of a bigger strategy, which will be unveiled soon. We are excited to go public and share more about our team.

Q: As you moved from Beta to mainnet launch, what are the main challenges you foresee and how will you try to resolve these?

A: There are two distinct challenges with both our mainnet launch and scaling Radar. First, we have the traditional user acquisition challenge that any new product faces. These challenges are magnified by the need to educate our users on relayer functionality and using 0x to trade. We plan on marketing to our growing community through educational content, like Weth.io and TokenAllowance.io, and asking the token issuers we are working with to help drive traffic and liquidity to our platform.

Second, to scale Radar we’ll be putting quite a heavy load on the Ethereum blockchain. To help solve this problem, we’ve built Radar to minimize the number of on-chain transactions. As soon as we can, we’d like to dedicate resources, both capital and talent, to helping find effective solutions for helping Ethereum scale.

Q: One of the questions that comes up in a lot of our discussions about decentralized trading and the quasi-centralized role for relayers and order book managers is: Will this end up in a race to the bottom? Will trading fees go to zero? What’s your take on this?

A: Perfect competition mandates many competitors with identical products and no barriers to entry. Right now, there are few relayers and even fewer decentralized trading protocols. Relayers that do exist have unique user experiences thanks to the flexibility of the 0x protocol. For some insight into relayer strategies check out the 0x wiki or for a sneak peak into the differentiators that we’re working towards check out our latest Medium post.

Currently, like all new software categories, there are significant barriers to entry for new participants including technical competency, regulatory strategy, legal compliance, localization choices, and go-to-market strategy. Therefore, we conclude it’s unlikely fees will go to zero, but there may be market pressure in the long term for fee competition.

Q: In the nascent decentralized trading space, we rarely hear about a need for local and/or regulatory compliance. What is you view on this?

A: Our team believes in transformative regulatory change, not disruptive or antagonistic change. In fact, we’ve published a detailed overview of our regulatory strategy. In short, we believe the regulatory landscape needs to evolve in tandem with the blockchain community. We want to be a positive force of change and help work with regulators and legislators. One of the benefits of a resource-heavy centralized system is their ability to hire lobbyists and court politicians. As decentralized system participants we don’t have that luxury, so we have a responsibility to understand and operate within the boundaries of regulation.

We highly recommend other innovators in the space follow (and donate to) Coin Center. It’s an excellent place to get started and learn more about the regulations that may affect them.

Q: You’ve described the 0x ecosystem with relayers as a Modular Trading Network. A requirement for this network design to work is that relayers link to each other. Are you in discussions with other relay initiatives to enable this?

A: We are in dialogues with a few relayers, some active and some in stealth mode, regarding order sharing and have committed to building with the 0x relayer API standard to help facilitate this vision. We believe there will be high degrees of collaboration through mutual incentives, eventually leading to true networked liquidity.

Q: Trading protocols, networked liquidity and seamless/invisible token:token exchange are necessary components for a decentralized future. Besides plugging in and using Radar Relay — how can the crypto community help Radar Relay?

A: To help realize this decentralized future the crypto community can be active participants in the Radar community on SlackTwitterMedium, or Reddit. We are always looking for critical feedback on functionality, bug testing, and feature ideas. Most importantly, we are looking for talented engineers with a vision for the decentralized future.

[addtoany]

The 1000th ICO

Monday, October 16, 2017
  • The TokenData Take: Firstly, the boring news – last week, 10 ICOs raised $60M. This is a fairly low number, although we still have more than 140 active ICOs that are scheduled to close in October (and have raised more than $230M already).

    Secondly, the mindboggling stuff: One THOUSAND token sales/ICOs  – that’s our stat of the week. We added more than 200+ ICOs this past week and our database contains information on more than 1000 ICOs. We’re also tracking more than 140 tokens that have been issued through ICOs (142 to be precise). A quick analysis on the returns of these 142 tokens – relative to BTC and ETH – shows that “only” 31% of tokens outperform both base cryptocurrencies (graph can be found below) if held since issuance. A more thorough analysis about the composition of this relative performance will be published later this week. Some food for thought as we head into the week.
     
  • NEW on TokenData.io: 
     
    • My Tokens (BETA) – You can now create lists of token sales and token returns by creating an account on our website. We’re iterating quickly and adding new features in the coming weeks. Please send us your feedback!
       
    • Token Jobs (tokenjobs.io) – We’ve launched a free and crowdsourced job posting board focused on crypto projects. Whether you’re a dev looking to move into the space, or you’re a project looking to attract the best talent after completing an ICO – look no further!
       
  • Weekly Token Data:
    • Nr of completed ICO’s (wk/mo/ytd): 10 / 25 / 306
    • USD Raised (wk/mo/ytd): $60M / $165M / $2.9B
    • Calendar: 53 ICOs this week
       
  • What We’re Reading

Token Return Analysis

Token Sale (ICO) Calendar

Mon (10/16)

Tues (10/17)

Wed (10/18)

Thu (10/19)

Fri (10/20)

Sat (10/21)

Sun (10/22)

[addtoany]

The curious case of ICO whitelists

Tuesday, October 10, 2017

The TokenData Take: Following last week’s newsletter, we confirmed a number of additional ICOs that successfully raised capital in September. This brings the total amount of capital raised through ICOs to $731M in September and $2.7B year-to-date. With 15 ICOs raising $105M in the first week of October, the ICO market is on track to easily hit $3B in 2017 and we currently follow a total of 150 ICOs that are still active and scheduled to close in October alone..

One of the observations from updating our database in the past weeks is an increasing amount of sales that opt for a mandatory ‘whitelist’ registration process – pioneered by Civic and 0x – for both the pre- and main-sale stage. For example: The Airswap (p2p trading protocol) token sale had to close whitelist registrations within hours – instead of days – after receiving more than 18k registrations for a ~$12.5M sale which will take place this week.

NEW on TokenData.io: 

  • Q&A with Radar Relay – One of the biggest questions that pops up amidst the ICO hype is where new tokens will be traded. Decentralized trading protocols and exchanges such as 0x and Kyber are being developed as an alternative and/or complement to centralized liquidity providers. We talked to the Radar Relay team about launching an order book on top of the 0x protocol, and the opportunities and challenges in decentralized trading.
     
  • Token Jobs (tokenjobs.io) – We’ve launched a free and crowdsourced job posting board focused on crypto projects. Whether you’re a dev looking to move into the space, or you’re a project looking to attract the best talent after completing an ICO – look no further!

Weekly Token Data:

  • Nr of completed ICO’s (wk/mo/ytd): 15 / 15 / 296
  • USD Raised (wk/mo/ytd): $105M / $105M / $2.8B
  • Calendar: 45 ICOs this week
  • Crypto Celebrity of the week: Ghostface Killah (Wu-Tang Clan) announces a crypto fund called ‘Cream Capital’

(UPDATE) CAPITAL RAISED in 2017

Token Sale (ICO) Calendar

Mon (10/9)

Tues (10/10)

Wed (10/11)

Thu (10/12)

Fri (10/13)

Sat (10/14)

Sun (10/15)

[addtoany]

A Career in Crypto — Linda Xie

Wednesday, September 27, 2017

One name that consistently shows up in any meaningful discussion we have about tokens, ICOs, decentralized business models and cryptocurrency careers is Linda Xie: Former Coinbase PM, writer of excellent beginner guides and advisor to the 0x project — the only thing missing from her stellar crypto CV was a crypto-focused investment fund. So when we were told that she was setting out to do exactly that, we couldn’t wait to interview her about her career, opinions on the token space and setting up a fund.

From skepticism to defining moments

“Interest in crypto can explode to unprecedented levels in a matter of days”

Q: How did you first discover Bitcoin and what convinced you to start a career in the space?

A: I first discovered Bitcoin in 2011 when my classmate and I were researching topics to write about for our Economics class. We ended up writing a research paper on Bitcoin but our outlook wasn’t very positive at the time. My initial reaction was that it was fascinating technology but I did not think it would ever become mainstream because very few people had heard of it, the primary association was darknet markets, and there wasn’t a trusted or easy place to buy it.

The defining moment for me to start a career in the space was when Coinbase onboarded Overstock as a merchant to start accepting bitcoin as a form of payment in 2014. I was excited to see such a prominent company publicly show their support for bitcoin with a legitimate digital currency startup leading the charge. This event actually led me to apply to Coinbase.

Q: During your last year at Coinbase, you witnessed exponential user growth and the incredible price change in Ethereum. What is your biggest lesson about scaling a cryptocurrency focused company?

A: One of the surprising things that we witnessed at Coinbase is that interest in crypto can explode to unprecedented levels in a matter of days. While there had been a steady increase in new Coinbase customers, during the run-up in Ethereum market cap in May 2017 we had a day where 40,000 new users signed up. It’s important to create infrastructure that can dynamically scale at these rates.

Q: For cryptocurrencies to go ‘mainstream’ and/or to make it more attractive for institutional investors what are the types of companies that are missing and the critical problems that need to be solved?

A: Some of the obvious problems that need to be solved are the blockchain scaling issues. We need sufficiently decentralized blockchains that can actually support mainstream adoption today. Another one is the extreme volatility of cryptocurrencies, which can be inconvenient for people that are getting paid in digital currency. Having a reliable stable coin will be a critical ingredient for mainstream adoption of digital currencies. I’d like to see more companies focused on publishing educational materials for non-technical folks and easy ways to store and exchange crypto in every country, as well as financial instruments such as ETFs for institutions (e.g. pension funds, university endowments, etc.) to invest in.

The Token Take

“if you were to replace the token with Ether, would it operate in the exact same way?”

Q: We can imagine that you get approached 24/7 by token sales to become an advisor for token sales/ICO’s. Why did you pick 0x?

A: I strongly believe in the 0x vision that the world is becoming tokenized and everything from fiat currencies to stocks to digital game items will eventually end up represented as digital assets on an open financial network. Naturally there will need to be a low-friction method of exchange on this new open financial system. I am confident that the 0x co-founders, Will and Amir, are able to execute on this vision given their technical expertise around smart contracts, research, and trading as well as their passion for the technology.

Q: Having worked for both the most successful centralized exchange and a decentralized trading protocol, how do you see centralized and decentralized trading platforms co-exist in the future?

A: I see trusted centralized platforms such as Coinbase and GDAX as the bridge between finance 1.0 and 2.0 providing the fiat rails to crypto. Institutional investors might be more attracted to centralized platforms because they offer high performance trading, advanced tools, and are legally accountable should any issues arise. Non-technical people might find it easier to use centralized exchanges because they don’t need to worry about storing their own private keys.

Decentralized exchanges are great for those that are more comfortable storing their own private keys and are necessary for trading assets that aren’t readily available on existing centralized exchanges. In addition, not everyone will have access to a centralized exchange but anyone with an internet connection can access a decentralized exchange.

Q: What’s your view on the current ICO boom? Moreover, if this initial growth slows down — or put more bluntly, when the ICO bubble pops — which types of projects are the ones to survive?

A: I think the projects that survive will be the ones that have a clear need for a token. A key question to ask — if you were to replace the token with Ether, would it operate in the exact same way? If so, then I don’t necessarily see the value in the token besides an easy funding mechanism. Of the countless projects selling tokens over the past year, I believe most will go to zero. Especially the pre-product teams that put a heavy emphasis on marketing.

Q: Given the successful completion of the 0x token sale both in terms of capital raised and wide distribution of holders, what best practices would you advise other projects to follow?

A: I’d like to see projects raise only the amount of funds they need. Many projects set their fundraising target to maximize the amount of capital that the market will provide, but they won’t necessarily be able to responsibility allocate this capital. I do not support the notion that whales should be able to buy up a majority of the tokens, so I hope to see more projects include a process like 0x in creating a wide distribution. Only pick advisors that will truly add value to your project rather than as a way to gain credibility by association. Ideally the project has a working product before the token sale. For projects raising funds from US investors, they should work closely with a legal firm to minimize the risk that their token will be considered a security. Focus on building a strong community of token holders. This can be accomplished with little to no marketing.

There’s many other best practices to follow and I plan on co-publishing a more detailed post on this soon.

Q: Other than 0x, what are interesting token projects that you follow?

A: There are so many interesting projects. As I mentioned earlier, stable coins are critical to the crypto space so I’m paying close attention to projects working on this problem. I’m following prediction market platforms like Augur closely because I’m particularly interested in seeing how they may impact insurance markets and later on even governance models through futarchy.

Starting a fund

“For the past couple years I found myself spending all of my free time reading technical whitepapers”

Q: You recently announced that you’re starting a crypto focused fund together with Jordan Clifford (ex-Coinbase). Why did you want to make this move and what will you focus on?

A: For the past couple years I found myself spending all of my free time reading technical whitepapers and talking to other passionate people in the space. I am excited to fund and advise promising crypto projects full time. The focus will be giving our investors broad exposure to cryptocurrencies that we believe in long term. We will invest in everything from existing protocols to early stage projects, however, we won’t be actively trading as we believe our main value add will be picking out long term winners.

Q: The outperformance of crypto as an asset class and the ICO hype have led to a large interest from institutional investors. As a result, dozens of new crypto focused funds have popped up in the past quarter. What do you think about this development, and what will be your fund’s competitive edge?

A: Jordan and I have been involved in the crypto space since early on, we understand and believe in the technology and want to see it succeed for the right reasons. We’ve experienced the ups and downs; ultimately we see the path forward for the technology long term. In the current highly speculative environment we feel comfortable differentiating the truly innovative technologies from the projects that are attempting to take advantage of unsophisticated speculators. Jordan has one of the sharpest technical minds in the space, and he is able to dive deep into a codebase to find technical flaws and assess code quality.

Q: We saw an investing mantra from Stanley Druckenmiller on your twitter last week. As you make the transition to the institutional investment side of crypto, what are the main challenges you face and who do you go to for advice?

While the markets are very volatile, we want LPs to be able to confidently ride out the ups and downs with us. Recently, I’ve been getting invaluable advice from some friends in the venture capital space since they have a similar challenge in getting others to see the long term vision in their investments. That’s the main challenge to overcome and the excitement for us: getting institutional investors to understand cryptocurrencies and be excited by the grand vision.

— — —

Special thanks to John Yi for the intro, and of course Linda Xie for taking the time to answer our questions.

*Disclaimer: The TokenData team participated in the 0x token sale (general public, not presale)

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The MITation game — Q&A with Enigma

Tuesday, August 29, 2017

Interview with the team behind Enigma about building a community, token sale best practices and how to deal with the aftermath of a security breach.

Intro

Who? : Enigma (https://www.enigma.co/)

What? : Decentralized data marketplace (Enigma) and platform to create cryptocurrency trading strategies (Enigma Catalyst)

Where?: https://token.enigma.co/

When? : September 11th 2017

Why interview? (Official reason): Because at TokenData.io we’re as obsessed with data and analytics as the Enigma team, and because the team has been transparent about how it handled a security breach.

Why interview? (Unofficial reason): Because all members of TokenData applied for MIT but were denied admission…

Part 1: The full Enigma download

Q: What are Enigma and Enigma Catalyst?

A: Enigma is building a decentralized, open, secure data marketplace using ENG, our native token. Right now the long tail of data is not being effectively captured by major data aggregators. Meanwhile other data is being hoarded and exploited by large corporations. We want to change how data is shared, aggregated and monetized in a way that maximizes collaboration.

Catalyst is Enigma’s first product built on top of this marketplace. Catalyst matches financial data consumers (quantitative traders and investors) who want to create smarter crypto investment strategies with financial data curators who license their data to the Catalyst community. The platform also provides backtesting and research tools for traders to create strategies, greatly reducing the typical time and expense of strategy creation.

Q: Rumors are that Enigma is run by a group of MIT wunderkinds who could make Will Hunting’s math look like a 5-year old’s table-scratch. Can you shed some light on the history of your team?

A: Our team has all studied at MIT. We are entrepreneurs with years of experience in the fields of finance, data science, technology, trading, and FinTech. Our co-founders are Guy Zyskind and Can Kisagun, who met at MIT.

Our advisors include Prof. Sandy Pentland of the MIT Media Lab, Justin Lent of Quantopian, Bill Barhydt of Abra, and many others with decades of experience in relevant fields. We believe our team and advisors are one of the strongest aspects of our project and will allow us to achieve our vision for the future of data.

This is what we imagine Enigma’s brainstorming sessions to look like

Q: There are at least 15,061 PhD students writing their dissertations on blockchain projects and analyzing the footnotes of Satoshi’s original whitepaper. How did Enigma evolve from an academic research project at MIT to its current form?

A: A decentralized data marketplace was one of the first things proposed in our whitepaper in 2015. The ethos of the MIT Media Lab is Deploy or Die” — meaning we are not content to keep our interest purely academic. Getting working products into the hands of our community has always been our goal. As the space has evolved, the time is finally right for products like Catalyst and Enigma to thrive.

Part 2: If you build it, they will come

“We believe creating adoption around a usable product is the right approach, and one that is often overlooked in the crypto space.”

Q: Catalyst is designed to be the application layer on top of the Enigma decentralized database protocol. Are you planning to launch Catalyst before Enigma’s database protocol is ready? If so, how do you foresee a transition as the underlying protocol gets ready to launch.

A: Yes. We believe creating adoption around a usable product is the right approach, and one that is often overlooked in the crypto space. The first iteration of Catalyst would include a centralized data marketplace for crypto data, where we will host our own data sets, as well as those contributed by members of the community, in return for ENG bounties. The transition to the data marketplace protocol would be gradual.

At first, we will release a client that allows data curators to host their data sets on their own servers, but data subscription would still be done centrally through our servers. Later on, after a sufficient period of testing, we will bootstrap the decentralized data marketplace protocol with all the existing data-sets to date, at which point, Enigma would become just another node in the network.

Only American sports fans and movie buffs will get this picture as an analog to the story

Part 3: The comps

Q: According to our dataset, there are a number of projects out there who are launching token sales to fund either a decentralized database and/or algorithmic cryptocurrency trading platforms. What differentiates Enigma?

A: The Enigma team has been researching the idea of a data marketplace for several years now, with the original Enigma whitepaper being one of the most downloaded and cited papers in the blockchain space. Very few of the current projects (if any) that work around decentralized computation and storage have worked through the required technical hurdles. In that sense, our team is well suited to address that challenge. In terms of an algorithmic cryptocurrency trading platform, our alpha has already seen thousands of sign ups in the few weeks since its launch. Our biggest strength may be the growth in our community. As a platform, we rely on having an engaged community to succeed and grow. With 9000+ users already in our Slack channel, we’re confident in our strong momentum.

Q: How does Enigma Catalyst compare to Numerai, another high-profile blockchain platform which incentivizes cryptocurrency investors to develop and implement algorithmic cryptocurrency trading strategies. Is there room for both projects and tokens?

A: The main difference is that Numerai is a fund, while we are a platform. Numerai uses predictions from the community to make their own investments. We give community the tools to allow our users make their investments and hence capture their own upside. Also, the long-term vision of Enigma is much broader than that of Numerai.

Part 4: Token Sale Best Practices

On the token sale front, we like what 0x and Civic did — ensuring access to the community, as well as a large distribution of tokens.”

Q: Your token sale is planned for Sep 11. Can you describe the team’s vesting rights and how you plan to get a wide distribution of token holders.

A: The team’s ENG tokens vest over multiple years, with all of the team committed to holding their tokens through the first year. Since we are a platform that depends on its users to be successful, we are committed to a broad crowd sale with a focus on our core community. We also have a significant portion of our created ENG tokens allocated to our community through incentives.

Q: You recently announced and started the Catalyst Contests in which people can test strategies and earn ENG tokens. Can you tell us more about some of the results you’ve seen so far and the feedback from early users?

A: Catalyst Contests are our newest creation, with our first content currently running right now, so it’s a bit early to remark on results. The best strategies are eligible to win ENG tokens for beating the crypto markets. So far our early users have been essential in helping us refine the Catalyst product and make more accessible to our community. We’re working closely with professional quants to ensure we’re building a powerful product that is still usable by anyone.

Q: What are cryptocurrency projects/ICOs/token sales that Enigma looks at as a good example for running a project and token sale?

A: On the token sale front, we like what 0x and Civic did — ensuring access to the community, as well as a large distribution of tokens. We believe communities are what wins the game. On the project side, we like Ethereum and Filecoin — both have done a tremendous job in popularizing complicated tech and making it accessible for developers.

Q: What is your view on the recent SEC ruling, and if/how it affects your project and more specifically, the ENG token and the statement that “Catalyst allows anyone to build their own crypto hedge fund.”

A: According to the legal advice from our excellent lawyers, ENG is a utility token and it does not constitute a security. We have complied and intend to comply with all guidance from regulatory bodies. For more information refer to our lawyer Marco Santori’s tweets on utility tokens.

Part 5: Phishing Attack Aftermath

“First and foremost, always educate your community.”

Q: Last Sunday, there was a security breach of the Enigma website and Slack channel that resulted in a phishing attack and fake pre-sale announcement. How long did it take the team to notice that something was wrong, and what were your first actions?

A: The Slack community first brought the attack to our attention almost immediately. Our first action was to take the website down and change all passwords to any critical systems. That is likely what mitigated most of the attack, as at that point people in the community were aware that this was a phishing attempt. All e-mails were sent from a fake account that didn’t belong to the company. Our community was instrumental in handling Slack and warning people of the phishing attack, and we are grateful for their help in containing the impact.

Q: What actions and security measures have you taken in response to the hack?

A: Enigma announced that it has taken responsibility and will restore funds to everyone that lost money in this recent scam attempt after the token sale concludes. We are deeply sorry for the pain experienced by those who lost funds to the scam attempt, and we want to make sure that no one in our community that was a victim to this well-coordinated phishing attack is financially hurt. We’re very thankful that our community has stood by us and continues to support our project.

Here are the announced measures we’ve taken:

  1. Strong, different, random passwords for each account — whether held by an employee or official communication channels for the company
  2. 2FA for all such accounts
  3. Weekly password rotation, and daily rotation in the week leading to the token sale
  4. Proper access control management and compartmentalization

We are taking additional security steps that we are not making public at this time. We’re also working with law enforcement, exchanges, token sale companies, and our community to continue to pursue the lost funds and the scammers. We hope to have more announcements on this matter soon.

Q: Given the amount of token sales that are slated to take place after yours, how can other token sales learn from your mistakes and what would you recommend them to do?

A: First and foremost, always educate your community. We made multiple announcements prior to the scam attempt that no money should be sent to anyone for any reason prior to our crowdsale date, and we provided guidance for identifying phishing attempts. Token sales should take every security precaution from day 1, including those we mentioned here, and you should ask that your community do the same. We’re currently working with other token sales, both previous and upcoming, to establish clear best practices and share our learnings.

— — — —

Special thanks to Tor Bair from the Enigma team for co-ordinating the interview. Any comments & questions are welcome at [email protected]

DISCLAIMER: The interview with Enigma is not sponsored content and TokenData.io is not getting compensated by the Enigma team in any form whatsoever. This interview is for informational purposes only and does not constitute any solicitation or endorsement of investment. Any token purchases you make are at your own risk and discretion. The contents of this interview are the property of TokenData.io — All rights reserved.

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