Thoughts on Tokens
<i>However, when considered as an alternative to classic equity financing, token sales yield a &gt;100X increase in the available base of buyers and a &gt;1000X improvement in the time to liquidity over traditional methods for startup finance. The three reasons why: a 30X increase in US buyers, a 20–25X increase in international buyers, and a 1000X improvement in time-to-liquidity.</i><p>these token sales are successful because people who buy into them are selling off their profits from buying Ethereum (from $0.88 in Jan &#x27;16 to $193 today &gt;2000% return). Its a diversification play of course. Look how much the DAO raised a year ago.<p>Its ridiculous that the <i>adults</i> in the room like A16Z, USV, Balaji are falling into hypnosis.<p>ICO&#x27;s coming out have no product, no users, just a white paper and a nice website, with an ERC20 contract address for deposits.<p>If you talk to anyone buying these tokens, they all say the same thing, that they&#x27;re buying to flip the tokens on Poloniex for a quick buck.<p>A recent example is Gnosis, which raised $12.5M by selling 4.17% of their tokens at $30 each during the 1st auction round. They started trading at $60-100 a week after the sale and now are trading above $200.<p>Look at the charts of coins delisted by Poloniex. immediate 50%+ drop. The value of these tokens is their liquidity. Take that away and you won&#x27;t see these valuations.<p>For traditional VC&#x27;s, if companies let their shares float on exchanges, the SEC mandates financials. These tokens are designed around hopes and dreams. Most certainly a bubble but more so a game of musical chairs, make some money while the music is still playing.<p>Bitcoin at the end of the day grew in price from speculation BUT it had a real use, albeit in the black market. It has grown from that since 2013 but not by much.<p>P.S. Token sales don&#x27;t even give up equity. These people are paying millions for API keys they can&#x27;t yet use? I don&#x27;t think so.