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Initial Coin Offerings (ICOs) have come of age. This year alone by July, they had raised US$ 1.3 bln in funding. However, all is not well in the ICO landscape. The sourness brought on by fraud has led to this novel fundraising exercise being described as ‘absolute scam’ by Wikipedia founder Jimmy Wales. If the startup bubble bursts, we could be facing a huge economic crisis. Recently, Inc.com published coinschedule stats and concluded that “magical wealth creation seems to be doubling on a monthly basis.” They further stated, “In many ICOs, investors have no guaranteed rights and the tokens they purchase have no purpose, functionality, or features.”
Surely bringing a semblance of order to the chaos and mess that is the ICO market should be a priority? Tokenza is creating a decentralized network on the Ethereum blockchain that will not only change the way ICOs gather funds and make them more transparent and accountable but also enable startups to tap talent through access to freelancers.
An ambitious plan to change fundraising
Tokenza plans to address how fundraising is carried out in the future by building the Tokenza Decentralized Network (TDN), which is simply referred to as ‘the network’. TDN will aim to address the current issues that plague ICOs like lack of KYC and AML, fraud, unrealistic valuations etc. Startups will be able to use the network to hold ICOs and Tokenza will build the necessary infrastructure to ensure compliance with KYC and AML through its internal structures. TDN will comprise of project owners, backers, freelancers and curators. All constituents will be encouraged to get verified and to submit documentation through the Tokenza platform for KYC/AML purposes. If they do so they will be able to waive limits that are in place limiting access to various services. Curators would be required to be verified from the outset. The network will have a social component to ensure that everyone involved plays by the rules. ICOs will be held in stages and the focus will be on delivery of goals of the project. Vincent Fontaine, CEO of Tokenza tells us, “Our vision is that in the future, no investor will invest into an ICO or a blockchain project without using a platform like Tokenza. We are trying to create the one-stop-shop for blockchain fundraising and freelancing, a platform where entrepreneurs, investors and freelancers are confident about everyone they are working with, and incentivized to play by the rules.”
Liquidity issues will be solved
ICOs suffer from liquidity woes. Since the advent of ICO fundraising, we see that even though numerous tokens are released, most of them turn out to be damp squibs. This is the reason why a project like Tokenza assume significance as they will provide professional market making services. ICO’s can escape the curse of low liquidity and the resulting volatility in tokens. The benefits will be numerous as market manipulation would be difficult and the usability of tokens higher. It would also make the tokens more tradeable and exchanges would not easily delist tokens that have less liquidity.
Providing Startups with resources
Startups find it difficult to tap into a talent pool but ironically it is the people on whom the success of the company depends. The late Steve Jobs of Apple computers said, “When you’re in a startup, the first ten people will determine whether the company succeeds or not. Each is ten percent of the company. So why wouldn’t you take as much time as necessary to find all the A-players?.… A small company depends on great people much more than a big company does.” Tokenza’s platform will provide an opportunity for freelancers to offer their services through TDN. Freelancers stand to benefit as they will be working for startups on a singular platform and won’t have to get paid through numerous tokens which are themselves marred by volatility and lack of volumes. They will also benefit as they can participate in an ecosystem where their skills and talent can be evaluated by independent curators and they have access to both startup sponsors and founders. Startups will benefit as they won’t have to run pillar to post to find the right talent or spend time in establishing their skillset. Tokenza have published a whitepaper that lists in detail their plans regarding how they want to revolutionize the ICO fundraising process and help startups.
Tokenza to launch an ICO soon
TDN transactions will be secure, auditable and publicly verifiable on the Ethereum blockchain. The network will be an ‘abstraction layer’ built on top of Ethereum’s blockchain. All of this will be fuelled by the TKZ token that will play a crucial role in the network as the atomic unit of value exchange. The result: Formation of a transactional economy between Tokenza buyers, sellers and other participants. Tokenza are holding a crowdsale in the near future. Details regard the Tokenza ICO are available on their website and users can register online. Tokenza have already raised US$ 200,000 through seed funding via private investors in a matter of hours and they are incorporating themselves as a company and setting up the legal framework. TDN could revolutionise the way we look at ICOs and take away the factors that make them an absolute scam.