I've been reading a lot of comments after the most recent EOS announcement video and it seems some people are a little confused about what just happened.
Here's my take on what the announcement means for EOS and for the whole crypto space in general. Firstly, the announcements:
- Air Drop for EOS Holders - Everpedia (block chain version of Wikipedia also being made by the founder of Wikipedia), announced they are not holding an ICO at all. The only way you can get their tokens (called IQ Tokens) is to be an EOS holder. They will "Air Drop" IQ tokens to all eos holders. That's it, no mining, no ICO.
- Korean Regional Head Of - Richard Jung former CEO of the largest South Korean Exchange (Bithumb), Exec VP Fujitsu and many other influential roles, joins Block.One as Regional 'Head Of' - Korea.
- $1 Billion for EOS dApps - Block.One announced they have officially taken in over $1.1 BILLION dollars so far in the ICO with over 5 months to go. They have announced they will spend at least $1 Billion USD on funding projects to be built on top of the eos.io platform.
Sounds good right? But what does this really mean? Let's 'unpack' the announcements and explore the impacts and implications of each one separately.
Air Drops of new Companies tokens directly to EOS holders
Honestly, this one blew me away. The market liked it, comments are positive but I don't think many people have realised what this really means...
Let's give some context into the current ICO space first...
Risk - This is a HUGE issue for all current ICO's as they are releasing a product into a global market where there is little clarity as to the legal treatment of their companies and their ICO process. Currently however there is little option to raise funds in any other way. VC's are tapped out and waiting for some actual revenue to be made from crypto businesses before they go in any deeper.
The risk is in the sale of the tokens. The projects are in a bind though as if they give them all away, they have no seed funding to build out their business. But if they sell them, they open a massive can of worms in terms of legals and they may have separate issues across hundreds of countries.
What we saw with Everpedia announcing they are not doing an ICO, and that 100% of available IQ tokens will be given, for free, to eos holders was nothing short of mind blowing. But what about funding? How will companies who give away their tokens build out their project and deploy it with no funding? The answer is in point 3 above... Block.One are funding projects so they don't have to sell tokens through the ICO process!
Block.One have effectively removed the biggest legal risk for new block chain companies and provided them with a massive, distributed network from day 1.
The companies can still retain some of their tokens for later funding, however it's my opinion this will be kept at a minimum and that best practice of "locking up" founders' tokens will be a requirement to obtain funding from Block.One.
This, combined with the fact eos will be the simplest platform for new companies to build on (shortening development time from years to months), will prove to be too good to ignore for new block chain companies and you'll see far more solid projects developing on eos than ETH in no time at all.
Finally, eos holders will continue to get free air dropped tokens from all these new companies starting out on eos.io. That will make eos holders less likely to sell after launch which happens at the same time as the ICO supply of eos drying up... You don't need to be a math genius to see what's going to happen to the price there.
New Regional Head Of
This was another bombshell. Block.One are structuring themselves as a large global corporate entity (just like the name EOS "Enterprise Operating System" suggests) They're not playing around, this is designed to be a global mega corp from the beginning.
Their choice of Korea to show their hand combined with their choice for the new Head Of position shows their meticulous planing and execution.
South Korea is the biggest crypto market by volume and by $$ entering the industry and to start their global business structure with such an experienced practitioner both in Pre Crypto business as well as huge experience in the crypto space is a bold statement.
The statement they just made (IMHO) is this: We've raised over a billion dollars from our ICO and have 5 months remaining. We have the best developers in the business, the most professional corporate structure and now we're expanding that globally. We'll have "boots on the ground" in all key regions globally and we'll spend the $$ to ensure those boots are of the highest quality to provide the most benefit to the eos community.
Just wait for it, I can see regional heads in Europe, USA, China, Australasia, India and Africa.
With that structure and expertise in place, any new company with real promise would be stupid not to launch on eos.io, air drop their tokens to eos holders and take advantage of the global network Block.one has built to ensure the success of the eos.io platform (any everything on it).
1 Billion USD for Funding Projects on EOS
I think this is pretty clear now when viewed with announcements 1&2.
Block.One will be able to ensure they have THE best projects in crypto coming over to, and / or, starting life on the eos.io platform.
When project assess the alternatives they will quickly see there is no alternative. No other platform will enable them to avoid Securities risk, secure funding and roll out a completed project in under six months. Period.
For those of you who feel you've "missed the eos boat", you could not be more wrong. I see Block.One being the first global mega company solely focussed on block chain and I see EOS as the only contender to unseat Bitcoin from it's current spot at #1 from a Market Cap perspective.
I know it's a big call, it certainly has some way to go. I was a massive ETH fan as well but I never saw the potential in ETH as I see in EOS.
I can barely wait to see where this goes in 2018/19!!
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Hi Simon, great post really like how you've broken down the announcements to look into the fine detail, as often announcements like this are not all what they seem and a lot is left to interpretation and understanding of the fine details which isn't included in a presentation.
Having said that, project funding still seems a little vague. Yes block one has said it going to fund projects but the structure seems to be that they are going to deploy capital threw leading global VC's leveraging resources to be driven back into the tail end of innovation!
I think they are not going to be directly funding projects and that the funding will come from global VCs and there is a good reason why they are taking this route.
That however does leave the question of new project seeding kind of unanswered IMHO
I'll try write more on this over time
Thanks mate, I agree they seem likely to deploy funding through a VC and likely this is to retain an "arms length" from the direct funding of projects on EOS to ensure insulation from legal risk (around the ICO).
I also think this is gives them a few distinct advantages over deploying directly:
Block.One have a massive task ahead of them and they'll need help. VC's are toast if they don't get back in this game. It's a win win if they can get the process (and roles / responsibilities) right.
4 VCs already working with innovators. Brings that innovation onto EOS
Downsides for developers and new projects is barriers to entry and VC equity stake.
My thought is that adopting the language of ICO is a mistake for new projects which are trying to kickstart their inventions.
The precedent being set by everipedia is good under certain circumstances but dosen't necassarily apply to all projects looking to build on EOS.
There are also other benefits and disadvantages outside of funding to adopting an airdrop distribution model but for EOS token holders the everipedia announcement is good and if others follow then great more the merrier. 😆😅😃😆😅😃
yep, ther'll still be plenty of projects choosing the ICO route however I can see the high quality ones choosing the VC route to ensure a fast track, minimal distractions and Block.One global contacts to get the maximum traction in order to beat out the competish.
Good info! I'm holding my EOS and will continue to get more as I'm able to. What exchanges are they air dropping the IQ Coin?
Wont drop to exchanges (unless they choose to play ball)... They will be available to all eos holders off exchanges though. My guess will be to the new eos wallet post release
Great news and great article. Thanks for sharing :)
great work simon
Thank You for your take on the Block One announcements. I too believe that 2018 will be an amazing year for EOS.
Clarify me, if the companies planned to host their apps in EOS and plan to airdrop their tokens then what would be the point of having EOS tokens? to be only to identify the participants who can get the tokens airdropped? if apps don't need EOS tokens but they can create their own tokens out of thin air then isn't it creating more tokens than the originally planned 1 billion token by EOS? for eg if 5 apps create their own token then essentially its 5 billion tokens in different names equivalent to EOS. Am bit confused why would the parties to host their apps to have a new tokens rather getting EOS tokens?
all the tokens would have different purposes (use cases) and as such different prices. EOS is like Windows for the WEB and the other tokens will be like a Web application.
Saying there's no point in the eos token would be like saying there's no point in having windows because everyone could write their own operating system to run things on...
Hopefully that helps paint the picture
This seems to make EOS tokens crazy valuable... Just holding them is going to mean you pick up a bunch of other tokens. Like the house that lays the golden eggs
Sure thing, EOS is just like windows or Apple store but might beyond them in future, it's a big boat for all the Dapps to land. Each team of the Dapps will try to help make EOS more better to get benefit, because they are all in one boat: EOS.
It's more like Microsoft AND Apple combined (minus the hardware) app stores included... Agreed that every dApp launched on eos will strengthen their network
That would be Everipedia at https://everipedia.org
thanks, persistent typo... brain fade :-)
Thanks for explaining what went down in Korea.