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The State of Crypto M&A 2021
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CRYPTO’S SECOND WAVE: A POINT BREAK?
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Crypto M&A: 1H20 Update
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State of Crypto M&A: Update & Survey
Wednesday, March 4, 2020:
Crypto ≠ risk pandemic vaccine

Location, Location, Location?

Monday, December 4, 2017

The Location of Legal Entities & Founders behind ICOs

Over the past months, we have worked with European VC firm Atomico on the data side to contribute to their annual State of European Tech Report. This year’s report wouldn’t be complete without a data-driven section about the crypto and ICO frenzy, so together with Tom from Atomico, the TokenData team performed the most comprehensive analyses on countries and cities out of which ICOs are launched.

We analyzed the (legal) location for >1200 ICOs in addition to capturing the geographical location of ICO projects’ founders (CEO & CTO) using publicly available social media profiles.

Here are the key takeaways from the data:

  • Legal Domicile ≠ Founders’ Domicile
    One in four ICO projects is legally registered in a different county to that of its CEO/Founder
     
  • Europe counts highest amount of ICO projects…
    There are more ICO projects coming from Europe-based entities and European founders than any other region
     
  • .. but ICO founders from North America have marginally out-raised those from Europe
    $1.3B for team ICO-USA and $1.2B for team ICO-Europe
     
  • Switzerland is a leading home to the legal entities behind ICO projects, but not always to their founders
    ICO Legal entities based in “Crypto Valley” have raised more than $800M. However, this number drops to “only” $200M when we look at where the founders of these ICOs are actually based.
     
  • Two out of three ICO projects have founding teams located in different countries
    This is the most important and interesting conclusion in our opinion. Bitcoin, Ethereum and many other blockchain protocols started off – and still are – open source projects with contributors from all over the world. This pattern continues in most ICOs. If the future is decentralized, then founding teams will be as well.

Want to see all of the data insights? Full report with sleep graphs can be found here.

Source: Tokendata.io

Weekly Update

  • We’ll be at TokenSummit in San Francisco this week, hit us up if you want to grab a coffee or beer and get some free TD swag!
     
  • Best quotes from the ICO Financing Conference @ U.C. Berkeley
     
    • “We won’t get a lot of retweets for obvious reasons” – Spankchain Founder about their project’s media strategy
       
    • “You could call something a tomato, widget or utility coin, but at the end of the day we do our analysis” – S.E.C. counsel clarifying the Howey test once again
       
    • Bonus Points: “If I denominate my tokens in a hard commodity, for example pork bellies, does that mean they won’t be securities under S.E.C. rulings?” – Founder of unnamed ICO trying to financially engineer his way out of U.S. securities law…
       
  • 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 ICOs (wk/mo/ytd): 11 / 11 / 366
    • USD Raised (wk/mo/ytd): $72M / $72M / $4.3B
    • Calendar: 32ICOs this week

Token Sale (ICO) Calendar

Mon (12/4)

  • Arbitrage Crypto Trader – Cryptocurrency trading application
  • Aurora – Decentralized banking and finance platform.
  • Dimpay – Global payment system that is built on the NEM blockchain
  • ExsulCoin – Blockchain for the vulnerable populations
  • Galactikka – Self promoting social media
  • Gameflip – Decentralized ecosystem where digital goods on all gaming platforms can be sold as liquid assets.
  • INS Ecosystem – Decentralized consumer ecosystem
  • KickCity – Social media network
  • REMME – Security system
  • Satoshi Brewery – Satoshi Brewery in the city of Murmansk, in Northwest Russia
  • Sether – Social Network Data for Blockchain Businesses
  • Squeezer – Platform that helps software developers to builds apps
  • Trade.io – P2P cryptocurrency trading platform

Tues (12/5)

  • Artex Global – Global artwork platform
  • Play2Live – Ecosystem for eSports and gaming industries
  • Rentberry – Decentralized home rental platform
  • SophiaTX – Blockchain for Business
  • VCXCoin – VCXCoin is a potential ecosytem for visionary investors.
  • VVToken – Cryptocurrency debit card

Thurs (12/7)

  • Debitum Network – SME/SMB Financing platform
  • DreamTeam – eSports platform
  • Fintrux – Small business loans platform
  • Narrative – An ecosystem that rewards content creators
  • RAISON – AI Platform for investment and personal finance
  • Sorbase – Cryptocurrency trading exchange aggregation
  • Swissborg – Private banking with smart contracts
  • ViMarket – A 3D marketplace that allows users to create and share virtual reality (VR) experiences

Fri (12/8)

  • Florio – Health monitoring application
  • Galaxy eSolutions – Ecommerce business for Pre-owned and Refurbished Consumer Electronics Sector
  • Loci – IP and patent research and registration platform
  • Spectiv – Virtual reality streaming platform
     

Sun (12/9)

  • Gaze Coin – Customizable monetization for virtual reality
[addtoany]

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. Gox, Bitfinex, Cryptsy, 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 Slack, Twitter, Medium, 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)

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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)

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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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