Welcome to the 10th crypto roundup brought to you by HEAT. As a reminder, we are now doing these roundups once every 2 weeks instead of once a week.
We'll dedicate this edition to the numerous ICOs and new projects coming up.
"Mini-DAOs or Ethereum Takeoffs?
We all know what a well orchestrated disaster "The DAO" turned out to me, and thanks to the Slock.it team, the term "DAO" which stands for Decentralized Autonomous Organization has gone from meaning a general noun with futuristic connotations to a specific noun almost synonymous with 'what were they thinking'.
But keeping the connotations (and the $160 million the DAO raised) aside, there are lots of interesting projects that are being built on Ethereum. This we knew already. But some of the ICO crowdfunding for these projects has been mind-boggling.
One lesson from The DAO seems to be that an open crowdfunding project can attract tens of millions of dollars from people who may not necessarily have a whole lot of idea about what they are doing. So the more recent ones have been putting caps and limits.
Millions in Minutes, With Just a Whitepaper!
I want to mention two major Ethereum-based ICOs that closed over the last week:
- First Blood raised $5.5 million in around 10 minutes.
- SingularDTV raised $7.5 million in around 15 minutes.
I don't want to go crying "Bubble!" but yes, it seems a little 'bubbly' at least. I mean, they are both good projects, but I have a feeling that the majority of the people investing in these projects haven't even read their respective whitepapers. I know 2016 is turning out to be yet another year of the ICO, but really, this is heating up way too much.
The amounts these projects are raising is in the order of what a Series-A round would be for startups. That's usually after a 6-12 month due-diligence and growth metrics shown by the company to the venture capitalists. But in crypto-land, the same can be achieved with just a whitepaper!
To be sure, both First Blood (an e-sports platform but NOT a betting platform) and SingularDTV (a media company) are great projects. Time will tell if they are as successful in the real-world as their ICOs will have us believe.
Take SingularDTV for instance. It's the first ICO from the Ethereum powerhouse Consensys. It aims to do 4 distinct things - original series, documentary series, video-on-demand platform, and digital rights management. It is involved in both production of original content as well as a platform to display/manage rights of content. Very ambitious. Now if you read Singular's whitepaper, you'll see some of their assumptions: 2 million paid views of each of the 3 seasons of their series, for instance. It's a tough metric to reach for sure, even for very good quality productions. We'll see how successful the original content is and benchmark it against the whitepaper assumptions. But I hope the investors read the paper and the assumptions, no?
And there are More
These 2 are the 'officially' sanctioned Ethereum projects, i.e. the involvement of Ethereum's infrastructure: Conensys, Mist wallet, and even the Ethereum foundation are working together to achieve this. But there are also other projects that are just using Ethereum for paying 'dividends' and managing tokens. One of those is ICONOMI that raised over $10 million in its ICO.
Now the Slovenian-based ICONOMI team seems sincere in their idea, but also, the details from the whitepaper lack even a basic outline of what is being done. At the core, ICONOMI is a fund management platform. So far so good. So there's an Index Fund. That's a good idea.
But absolutely no discussion of how the index fund will be created, how the constituents will be decided, how often it will be rebalanced, how often its constituents will be changed, what the index-determining criteria is going to be, and a bunch of other very basic questions. Again, nothing against the ICONOMI team, but it seems that investors should do more due-diligence when it comes to such projects.
And ICONOMI ran one of the spammiest social-media bounties and ad-campaigns, with tons of fake accounts and retweets, so if your Twitter feed seems cluttered with ICONOMI stuff, that's probably the reason.
Anticipation for ... Augur's Launch, Finally
It almost sounds pre-history now, but less than a year ago, Augur launched its own ICO that raised around $5 million. Bitcoin was hovering around $250 then, and Ethereum around $1. You know, pre-history stuff.
They have been in serious development and testing of their platform, which has been in alpha for quite a while. We empathize with development that takes time - worthy projects take time. But the token is finally launching, and boy it's opening in a red-hot market for Ethereum projects.
It seems like the big exchanges like Poloniex are getting ready too. The launch is expected to be sometime this week. All eyes are on Augur's token, and seems like it will see a big price increase at least from the ICO levels. Before being consumed by the hype, please do remember that the platform hasn't even launched yet. Know the risks before you invest.
Some Thoughts Going Forward
There will be some wild-rides with these ICOs and others in the future. We're in such a period. It is almost a given that in this environment, there will be people looking to make a quick buck - or in other words, turn a scam. It is almost a given. Here's a scam advisory on deClouds, a project that has garnered quite a lot of attention on Bitcointalk already (I personally have no take on this, and don't advocate the project or the scam advisory).
Therefore, do your research before you invest in projects. Read the whitepapers - that's the least you can do for your investments. Note the team and their experience and expertise in the given domain.
And remember, almost by the nature of new-tech, there will be more boom-and-busts than you think there will be when you're in the exuberance period. Everything looks hunky-dory now, but there is bound to be a downturn. Don't take foolish risks with your money. Don't put your lunch money into these ICOs. We've seen the movie before on how that ends.
And good luck to everyone who's brave enough to ride this wild bull in the current market.