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How Initial Coin Offerings came to be

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“Fundraising on the blockchain is one of the main applications for crypto. That's very important for this industry to grow; we got to help entrepreneurs who build things in our industry.” This was said by Binance CEO, Changpeng Zhao (CZ) who might have started a trend that some are referring to as Initial Exchange Offerings (IEOs). 


Just recently, many were shocked when a token without much recognition jumped in 3 days by 1000%. Somehow, BitTorrent has done the same thing.

Chairman of the Securities and Exchange Commission (SEC) Jay Clayton said:


Right now I have no plans on leaving and I have lots of plans for staying.


However, some seem to have plans to make him irrelevant using a combination of centralized strength in a decentralized ecosystem. 

At first, projects create a website that market an ICO with virtually no one performing any vetting, asides perhaps a crypto journalist here or there and even then at a surface view. Now through Binance's Launchpad, they've achieved something new. CZ says:


It's basically an exchange, an initial sales platform where we help projects to raise money. If you are just at the white paper stage, then that’s a lot harder for us to evaluate. We do evaluate very strictly.


We have no idea of any published evaluation criteria, but they plan doing one or two IEOs every month. On Binance, they are normally purchased with the BNB token and at times with btc or eth. This has been very lucrative, with BNB worth some $2.2 billion. Others want in, so now we have a Huobi token. They say, this is not a launchpad. Others refer to it as one. If a token released by a project can be purchased with your own token, then naturally, your token will be in demand and there'll be a use case for it.


This is one good reason why BNB has soared in weeks, risen four times or more. Another one included is BitMax. This is completely different from BitMex because they are not related in any way.

What we can see here is something entirely different. As a sort of fees rebate, people are given BTMX tokens. We are yet to know if this is a security, but with respect to the quantity of the innovative energy it occupies in this space, it will be difficult to keep up. Some westerners have cowered infront of these old bureaucrats, but this space is a global one and it still has some smart cypherpunks.

What we can see is a solution that looks into the problem of any random person putting up some site, since now exchanges will vet, just the same way we see a solution to arcane restrictions since these are global exchanges and would definitely seek to adhere to the crowdfunding laws. Here's something you need to know: 

“The users from the following countries and regions are prohibited to participate in the DOS promotion: United States, Balkans region, Belarus, Myanmar, Côte d'Ivoire, Cuba, Democratic Republic of the Congo, Iran, Iraq, Liberia, North Korea, Sudan, Syrian Arab Republic, Zimbabwe, Algeria, Bangladesh, Bolivia, Cambodia, Ecuador, Nepal, Afghanistan, Burundi, Central African Republic, China, Ethiopia, Guinea, Guinea-Bissau, Lebanon, Sri Lanka, Libya, Serbia, Somalia, South Sudan, Thailand, Tunisia, Trinidad and Tobago, Ukraine, Uganda, Venezuela, Yemen.”

Governments generally, to the surprise of many, have backed this space very strongly. Infact, some of them can be referred to as allies. For example, the government of England before the Brexit mess, Switzerland, Estonia and from our view, even the Trump administration.

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