April 2019 Recap: IEOs have hype, but do they have long term value?

Initial exchange offerings (IEOs) lead the hype in the cryptocurrency sector this month as more exchanges join Binance in introducing launchpads to help cryptocurrency startups raise capital.

IEOs More Popular

These Violent Delights will have Violent Ends

– William Shakespeare / Dovey Wan

The process of token sale on cryptocurrency exchanges is attracting more attention from retail investors in the cryptocurrency space. Since the start of the year, leading crypto exchange, Binance, has carried out token sales for three projects. Meanwhile, it is gearing up to host the next token sale in two days. But why is this model so successful? Well, to begin we should note that only serious exchanges—will deep liquidity gauged by verified high transaction volumes—ought to be the ones tasked with distributing tokens on behalf of the project. Binance did trailblaze and others are adopting this innovative model. It’s not hard to see why.

For an overview of the Binance Exchange, check out our full review.

The short term success of token sales like BitTorrent, Fetch, and Celer is leading other crypto exchanges to declare interest in hosting such processes. For instance, Bittrex, Huobi, LATOKEN, Bitmax, and KuCoin are also operating launchpads that host project token sales.

The launchpads do have several advantages to the cryptocurrency space. In the first place, it allows project developers to reach more people since crypto exchanges have a large number of users. Secondly, when a project does qualify for a token listing, it is guaranteed with direct listing therefore there will be no need of coughing extra for as listing fees. Additionally, the system is beneficial for the investors as the risk of investing in a scam—remember 90 percent of ICOs were frauds—is low as the exchange do vet. Compliance and commitment to protect investors is also another big plus as IEOs prove to be efficient and secure than ICOs.

However, the biggest losers would be retail investors as more people would jump into the IEO bandwagon without actually knowing much about the final product. If the project doesn’t deliver, investors would feel the pressure to sell the tokens and that would be at a cheaper rate than they bought it. Add this to Binance’s—and other exchanges will copy this model—lottery scheme, and native currency requirements, many willing retail investors are effectively locked out or allocated low tickets despite being interested.

Even so, while it is good to invest in cryptocurrency projects, it is always best to consider the final product and the impact it could have on the cryptocurrency space. Eventually, that would help retail investors make better decisions.

Blockchain Gaming Would Be Huge

According to Newzoo, Games are the third most popular apps in a finding they partnered with Activision Blizzard surveying 12,327 mobile app users across the US, Germany, UK and France. In 2018, the video gaming industry crossed the $125 billion mark, rising 10.7 percent from 2017. What’s more, the industry worth is supposed to crash the $180 billion mark according to analysis from Statista. With blockchain at infancy, it is clear that blockchain gaming has the potential to become a massive industry and grossly undervalued. At the recent GDC conference in San Francisco, participants did show interest in blockchain gaming and the ability of players to trade value easily on the blockchain.

The participants developed an interest in exploring the potentials that blockchain technology could offer to the gaming sector. Once they identify such advantages, then the blockchain gaming sector could blossom into something big. This optimism is making more people bullish on the future of blockchain gaming.

Meanwhile, the event was packed with tutorials such as Blockchain Game Development and ERC-1155, which was presented by Enjin. Also, developing Ethereum Games with the Enjin Platform was another topic that was critically explored. As game developers understand the blockchain technology, they would be working in the next few years to develop better games on blockchain networks.

More Players Are Creating Blockchain Value

While there are fewer participants at the Hong Kong Blockchain Week last month, it is clear that industry players are understanding more about the blockchain space. Recently, Bakkt reached a valuation of $700 million, with the company targeting institutional investors and keen on making Bitcoin and cryptocurrency accessible to the mass. They are currently waiting for approval from the CFTC.

Cryptocurrency and blockchain players are slowly building a system that understands the value of the technology. More people are paying attention to final products rather than initial hype, and this would help develop the cryptocurrency and blockchain space in the long run.

These are some of the hottest topics for April, with the emergence of IEOs definitely leading the way.

Which of these trends came out at the top? Find out in my April 2019 crypto trends video!

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Michael Gu, Creator of Boxmining, stared in the Blockchain space as a Bitcoin miner in 2012. Something he immediately noticed was that accurate information is hard to come by in this space. He started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share his experiences. Being based in Asia, Michael also found a huge discrepancy between digital asset trends and knowledge gap in the West and China.