Cryptocurrency-Airdrops

Wouldn’t it be nice if money just fell from the sky?

In the world of cryptocurrency, sometimes it happens.The word "airdrop" immediately evokes images of parachutes and crates filled with vital supplies floating through the sky. When you hear "airdrop," you might think of food sent to starving populations or perhaps ammunition replenishments for embattled soldiers. In the cryptocurrency space, however, the term has taken on a different meaning altogether.

What is an airdrop?

According to members of Bitcoin Talk circa 2016, an airdrop is a "free giveaway of pre-mined coins." Perhaps surprisingly, the idea of giving away money isn't totally new. In a 1969 paper entitled "The Optimum Quantity of Money," economist and Nobel Laureate Milton Friedman suggested

a thought experiment.

"Let us suppose now that one day a helicopter flies over this community and drops an additional $1,000 in bills from the sky, which is, of course, hastily collected by members of the community. Let us suppose further that everyone is convinced that this is a unique event which will never be repeated."

By dropping money from the sky, a nation's central bank could increase the amount of money in circulation. In turn, this would stimulate economic activity and augment inflation. Colloquially referred to as "helicopter money," this unconventional tool of monetary policy has never been seriously considered – notwithstanding a passing reference in a 2002 speech about deflation by former Fed chairman Ben Bernanke, earning him the nickname "Helicopter Ben." Returning to the world of cryptocurrency, airdrops seem most common among projects that are just starting out. It's a way of putting coins in the hands of potential users, not adjusting monetary policy for an existing economy like Friedman imagined.

For instance, in 2014, a politically disenchanted programmer named Baldur Friggjar Odinsson promoted Auroracoin (AUR) using an airdrop to the people of Iceland. At the time of its creation, AUR was meant to be $15 per coin, but today it's worth just $0.67 per coin – a pretty substantial decline. To receive their coins, Icelanders were asked to input their kennitölur, or national identification numbers. By most indications, the project never really took root. Ultimately, airdrops are an attempt to bootstrap the network effect, the phenomenon whereby a good or service gains value as more people use it. This tool of cryptocurrency organizations raises questions about the legality of and potential tax implications for coins that people have not bought or even requested.

Article Produced By
Matthew De Silva

Matthew has a passion for law and technology. He graduated from Georgetown University, where he studied international economics and music. Matthew enjoys biking and listening to tech podcasts. He lives in Los Angeles.

Beyond Crypto Friendly: Swiss Bank Helps Clients Participate in ICOs

Beyond Crypto Friendly: Swiss Bank Helps Clients Participate in ICOs

Here’s something we don’t hear every day:

a Swiss bank has opted to enable its clients to participate in initial coin offerings easily. The bank, Swissquote, has previously allowed customers to trade in cryptos. This is, to say the least, an unusual service for a fiat banking institution. Additionally, Swissquote offers traditional FOREX trading and the range of services that traditional banks offer.

LakeDiamond ICO

The first ICO to be offered as an investment option on the banking platform is LakeDiamond, a lab-grown diamond company which is raising funds to purchase new equipment. They will offer more ICOs in the future. The pre-sale of this ICO is ongoing and offers a 10 percent bonus up to 4 million CHF (just under $4 million).The regular public sale will not open until January. Presumably, buyers will not have the opportunity to realize any gains or exchange their tokens for other cryptocurrencies before the spring.

The token itself is pegged to the cost of diamond production. Each token is meant to be equivalent in value to “1 (one) minute of growth reactor operating time, which produces lab-grown diamonds. One minute is the smallest possible unit, so the tokens are non-divisible past this point. If a diamond plate takes 180.5 minutes to grow, it will consume 181 LKD.” While this is not an ICO Review, LKD tokens are priced around 50 cents each. There will be a maximum supply of close to 6.8 million. The funds raised will be used to improve and expand the firm’s operations. Within the system, the tokens will have utility.

Lab-grown diamonds are a growing industry which markets themselves as more ethical. The movie Blood Diamond speaks to the reason that the ethics of traditional diamonds can be seen as questionable. Like all industries which require entry into disadvantaged countries and massive labor forces, the diamond industry has its share of detractors. Nevertheless, not everyone feels they are more ethical. There is the fact that they require less labor and if they became the norm, many thousands of people would find themselves without a livelihood.

You Don’t Need a Bank to Invest in ICOs

Yet, there’s certainly nothing unethical about investing in a firm to help it grow. LakeDiamond is meeting a demand and wants the public’s help to get there. SwissQuote feels it is a good investment opportunity for its account holders, and so they have partnered. All the same, cryptonaughts have invested in ICOs since before banks even took notice of bitcoin or any other cryptocurrency. While it is certainly positive to see a bank be so forward-thinking, ultimately banks are not necessary for investment into ICOs and are furthermore decreasingly necessary for anything at all as the blockchain revolution moves on.

Article Produced By
CCN-Altcoin News

https://www.ccn.com/beyond-crypto-friendly-swiss-bank-helps-clients-participate-in-icos/

Token Airdrops Are Taking Off Despite Legal Concerns

Token Airdrops Are Taking Off Despite Legal Concerns

They say you get nothing for free in this life,

but tokenized projects running airdrops would beg to differ. You can now get a whole lotta crypto assets for free – hundreds of them in fact – simply for signing up and following some social channels. What started as a novelty has become the norm, with a vast number of ICOs now earmarking a portion of their tokens for free distribution. Questions remain though about the legal status of airdropped tokens in an age where anything related to crypto risks being labeled a security.

Airdrops Are the New Faucets

In bitcoin’s earliest days, faucets were used to distribute the cryptocurrency. Fractions of a bitcoin were given away on tap, back when BTC was cheap enough to send in small amounts and bits were worth buttons. Anyone who claimed those free morsels back in the day and held onto them will have eventually came into possession of some extremely valuable cryptocurrency. Today, airdrops are the faucets of the token economy. These freely dispensed tokens aren’t worth much – if anything – but there’s a small chance that one day they might be worth something.

At the Crypto Investor show in London last weekend, glossy flyers promoted an after-party with “free drinks + airdrop”. Come for the prosecco, stay for the tokenized revolution. Such is the prevalence of airdrops that an entire cottage industry has sprung up to promote them and inform crypto holders of the latest ones worth catching. Prominent Twitter traders compete to top the referral leaderboard for airdrops, whereupon they will be rewarded with yet more tokens. Everyone’s clamoring for free tokens right now, even though no one’s sure whether they’ll ever have any utility or market value.

Get Your Airdrops While They’re Hot

For new entrants to the cryptocurrency scene, airdrops provide a way to get some points on the board, or rather some tokens in the portfolio. The very act of claiming them is enough to teach beginners the basics of wallet use and receiving crypto. The problems these projects purport to solve also provides a primer on the weird and wonderful world of crypto. Such is the prevalence of airdrops, they now have a dedicated Bitcointalk forum thread, dedicated Telegram groups and, in Airdropalert, a website that promises you need “never miss a free crypto airdrop again!”

Most of the tokens awarded are ERC20s, though other blockchains have also caught on; NEO for example recently distributed ONT via an airdrop. Just like an ICO tracker, Airdropalert filters offers based on upcoming/active/past. Tokens currently up for grabs include Boutspro, Yee, Sofin, and Aelf. Giving away tokens is easy in the early stages of a project, when they’re literally worth nothing. The trick is getting the airdrop community to start using these tokens on the platforms they were designed for. If that occurs, and the project reaches critical mass, the tokens should rise in value, and then everyone will be a winner. Or so the theory goes.

There’s No Such Thing as a Free Lunch

While the legal status of tokens has attracted a lot of scrutiny recently, little has been said about airdrops. Does the act of giving something away for free mean it is free from securities laws and other regulations affecting cryptocurrency? Probably not. As Tokendata recently noted: “While airdrops can make economic sense…we’ve seen some ICOs revert to airdrops because they believe that: Airdrops reduce the regulatory footprint in terms of securities laws…Airdrops increase a project’s valuation instantly”.

Tokendata then goes on to explain that airdrops are still subject to securities regulations. The problem is that airdrop claimants aren’t obliged to undergo KYC, as ICO participants now routinely are. If it were necessary to submit documents for verification, suffice to say the airdrop business would fold overnight. People are always up for free stuff, but force them to jump through too many hoops and they’ll walk away. But should the SEC come after an ICO further down the line, and it emerged that 5% of their tokens were in the hands of unknown investors, there could be trouble.

Blockchain advisor and investor Oliver Isaacs opined: “The attraction with airdrops is natural, as they have the potential to rapidly onboard users and create an engaged community virtually from day one. ICOs need to be careful to be seen to issuing airdropped tokens for the right reasons though, and not as a means of circumventing securities laws.”

The truth is, no one knows for sure where regulations are going to lead the crypto economy, both in the U.S. and the rest of the world. Tokens may or may not be commodities, securities, or some new asset class that’s yet to be defined. But whatever they are, doling them out like confetti could be a recipe for regulatory trouble should these tokens attain value. Cryptocurrency users won’t care about this stuff – they’re only there for the free tokens after all – but it’s something ICOs should carefully consider. One cease and desist order and the entire airdrop racket could come tumbling down.

Article Produced By
Kai Sedgwick

Kai's been playing with words for a living since 2009 and bought his first bitcoin at $19. It's long gone. He's previously written white papers for blockchain startups and is especially interested in P2P exchanges and DNMs.

https://news.bitcoin.com/token-airdrops-taking-off-despite-legal-concerns/

ICO Trust Returning as Caspian Rakes in Nearly $20 Million Ahead of Deadline

ICO Trust Returning as Caspian Rakes in Nearly $20 Million Ahead of Deadline

A crypto project has revived the investors’ trust in initial coin offerings

by raking in $19.5 million via crowdfunding. Caspian, a Cayman Island-based project, achieved its hard cap before the set date, implying a successful kick-start for the development of its institutional crypto trading platform. A beta-testing round of the platform is live already, which displays the crypto listings of the biggest crypto exchanges, including Techemy, Blockstars, OSL, and Galaxy Digital, in a single user interface.

Further Developments

The raised $19.5 million would be channeled to enhance the research & development and sales & marketing of the Caspian platform, according to its official website. With a beta version already out, the future upgrades would see the inclusion of sophisticated trading algorithms, real-time and historical profit-and-loss and exposure tracking. But most importantly, Caspian would allow institutionally traders the much-needed interchangeability between crypto exchanges via a single dashboard.

The project has already garnered partnerships from leading crypto trading institutions like Coinbase, Gemini and BitMEX. As part of the deal, Caspian will integrate with the said exchanges to bring new sophisticated trading and portfolio management functionality. It would serve to the growing number of professional crypto trading firms around the world.

“We see this partnership as not only a tremendous commercial opportunity but as a chance to truly move forward the institutional adoption of crypto as a mature, tradable asset class,” said Kayvon Pirestani, Director of Institutional Sales at Coinbase, about Caspian. The project also has renowned Bitcoin bulls like Mike Novogratz, Mona El Isa, and Ari Paul serving as advisors.

Institutional Money and Trading Tools

El Isa, the founder of MelonPort, an Ethereum-based asset management project, said that Caspian is attempting to fill the gap between institutional investors and

the professional crypto trading tools.

“Cryptocurrencies will play an increasingly big role with institutional players, yet to date, the sophisticated trading and portfolio management tools have not been available for this asset class,” she recognized.

So far, the mainstream investors willing to inject massive amounts of money into the industry are limited by the lack of liquidity across online exchanges. They are therefore opting for mildly-regulated OTC markets by taking enormous counter party risks. Caspian’s co-founders, David Willis and Robert Dykes, emphasized the demand for tools that simplify the entry of institutional investment in the crypto space. Dykes quoted Fidelity as an example of how even the world’s fifth largest asset management company is working towards mitigating the counter party risk in Bitcoin OTC markets, adding that tools like

these are “gaining momentum.”

“With Fidelity announcing the launch of a much needed custodial solution that allows investors to outsource the safekeeping of their assets to a trusted intermediary, coupled with the intuitive and user-friendly nature of a software platform like Caspian for the management of these assets, the floodgates have opened for institutional money to enter the market,” he stated.

Caspian is reportedly in process of adding 170 customers to its platform, including Lykke, ID Theory, Bletchley Park, and ex-Point 72 manager Travis Kling’s Ikigai Asset Management.

Article Produced by
Davit Babayan

https://www.newsbtc.com/2018/10/24/ico-trust-returning-as-caspian-rakes-in-nearly-20-million-ahead-of-deadline/

Crypto Airdrops – Effective Marketing Tool, And Potential ICO Replacement

Crypto Airdrops – Effective Marketing Tool, And Potential ICO Replacement

Crypto Airdrops – Effective Marketing Tool, And Potential ICO Replacement

One of the biggest challenges in the cryptocurrency space is to raise people’s awareness of your project, especially when it is time to raise capital or to boost the growth of the network. Nowadays, many projects rely on increasing their brand awareness using traditional mediums, such as paid YouTube influencers, paid-content writers, paid Twitter accounts, or simply by conducting huge marketing campaigns and questionable teasers.

The problem is that most of these marketing schemes are illegal as tokens are considered financial assets by many institutions such as the SEC, which warned influencers and celebrities that they are violating securities laws, such as the anti-touting provision of the federal securities laws, by promoting ICOs without disclosing the nature and amount of their compensation for any type of endorsement. 

For these reasons, token airdrops seem to have become the new cryptocurrency marketing craze, with many projects deciding to use this strategy to distribute their tokens to the public. For instance, NNS, Neo Name Service, decided to airdrop 1% of its total supply to NEO holders on June 27th, and a dozen projects evolving within the EOS ecosystem decided to follow the same strategy (Most EOS airdrops can be found on EOSDrops.io)

What Is An Airdrop?

An airdrop occurs when coins are deposited into someone’s wallet, without the person having paid anything, almost out of thin air. In many cases, to be the recipient of an airdrop, the only requirement is to have some coins from the hosting blockchain of the project stored in a private wallet. For instance, if the token being airdropped is an ERC-20 coin, then holding a certain amount of ETH is sufficient to be eligible for the airdrop. The same idea works from project evolving on the NEO, Stellar (XLM), or Icon (ICX) blockchains. Sometimes, and most often than not, other non-financial requirements also have to be met, such as subscribing to social media feeds or completing KYC. “Airdrops combine the best of paid referral programs with stock options. Potential users get paid for joining or using the network and have the potential upside if the network increases in value.”

Why Do Projects Airdrop Their Tokens For Free?

The reason behind airdrops is not simply to give the public free coins, but rather as part of a more elaborate corporate strategy. First and foremost, airdrops are used to increase awareness around a token, which might lead to an increase in the token value and to the creation of a network effect. This marketing strategy plays on a cognitive bias known as the endowment effect – suggesting that individuals value something higher if they own it. Moreover, like most types of advertisement, airdrops are used to plant a “seed” into users’ psyches. The aim is that the next time users see the ticker of the coin they have been airdropped, even months later, they will have the reflex to stop and be more likely to click on the ticker to know what is happening to the coin, even if only to see the current price.

Secondly, airdrops are a way to avoid regulatory scrutiny, as ICOs are currently in a grey area in some jurisdictions (the US) or completely banned (China, Korea). Therefore, projects are instead deciding to raise money from institutional investors and airdrop the rest as a way to allow users to get their hands on the token. Examples of companies using airdrops to this extent are Banyan Network and Polymath. Most companies which decided not to conduct public ICOs, are either China-based or evolve in the US financial industry (for an extensive review on this point, we suggest reading this article).

Are Airdrops Effective Marketing Tools?

OmiseGo (OMG)

OmiseGo conducted the first airdrop of this kind and amplitude on September 4th – distributing 5% of the total issuance of OMG token to every ETH address, with a minimum balance of 0.1 ETH. The purpose of requiring a minimum wallet balance was to avoid sending tokens to phantom wallets and ensure that real users received the OMG tokens.  The airdrop enabled each ETH holder, by providing them with a share of the 5%, proportional to their share of the total circulating supply of Ether.

According to the team, the aim of the airdrop was to allow the token to be distributed as widely as possible, allowing for true decentralisation of the platform, to ultimately increase its network security. However, the statistics demonstrate that the aim of the Omise team might not have been purely holistic, but might have been part of a grand marketing scheme.    

On the chart below from Google Trends, you can see that a surge in search interest related to OmiseGo occurred during the days of the airdrop, reaching a peak close to the end of 2017, and dropping to a tenth of the search interest in June 2018. Most websites such as CoinDesk, CoinTelegraph, and much of the Twittersphere spoke about the airdrop, leading to many people wondering what the project was about, and increasing OMG brand awareness.

Ontology (ONT)

In contrast with OmiseGo, Ontology did not perform a public token sale but raised its capital uniquely from private investors. Rather than conducting an ICO to provide the crypto community with the ONT tokens, the company decided to launch 3 rounds of airdropping possibilities, with the first being worth $8,000 at ONT all-time high.

The first phase involved the subscription to the Ontology Newsletter, coupled with a KYC in January 2018, with as a reward for doing so, 1,000 ONT being distributed by email address. The second was to people attending the NEO DevCon by giving them 500 ONT. Finally, Ontology being from the same mother-house than NEO, AntChain, the company decided to give 100 million ONT (10%) to the NEO council, which decided to pass on 20 million of them to its community at a ratio of 0.2 ONT for each NEO owned.

The snapshot of the third phase of the airdrop occurred on March 1st, leading to the all-time peak in Google searches for the term Ontology. As in the case of OmiseGo, the airdrop has been covered in pretty much every crypto news outlet, meaning crowd awareness was at a high. Additionally, the token having been sold at $0.20 during the pre-sale, privates investors already realised a 40x return on their investments.

Tron (TRX)

Now, let’s take a look at Tron (TRX), and its PR machine and CEO, Justin Sun. On April 27th the team decided to airdrop 30 million TRX ($1.7 million equivalent) to Ethereum users having a balance of over 1 ETH (as of April 20) in their wallet. Unlike OMG, which decided to airdrop amounts proportional to the holding of ETH, or Ontology which gave everyone the same amount of ONT, Tron decided to credit each account with a random amount of TRX between 10 and 100. 

The Tron foundation has been clear that the reason for the airdrop was to market the Tron platform which was set to launch a few days after the airdrop, as their stated motives were to increase awareness around TRX and allow people to use these TRX to vote for the supernodes. However, unlike for the two examples mentioned above, the airdrop did not result in a drastic increase in Google search interest. The cause could be simply that Tron was omnipresent in social media since January, meaning people were already aware of an incoming airdrop, or as this is the first airdrop that took place squarely in the middle of the current bear market we find ourselves in, so overall interest in cryptocurrency has led to this lack of interest in Tron’s airdrop.

PolyMath (POLY)

Lastly, let’s take a look at Polymath, which in the same way as Ontology raised funds only from private investors, and did not conduct a public ICO. In a few words, the project sold 12.9 million POLY to private investors in their presale and decided to airdrop 10 million POLY to the blockchain community instead of executing an ICO. However, unlike all the projects above, which targeted the users of a particular platform, Polymath decided to allow anyone to subscribe to the airdrop, regardless of their holdings. 

Unsurprisingly, the project being fundamentally interesting, the team received more than 40,000 applications and demanded that each airdrop applicant complete a KYC and AML screening, to ensure that the tokens were airdropped to real users, rather than bots. All the people which completed the procedure received 250 POLY, worth $165 at the time of writing and $400 at the token’s all-time high.

Similarly to the other projects, besides Tron, the marketing scheme worked, as the search interest for Polymath reached its all-time high by the 10th of January, the deadline to apply to the airdrop. The airdropping strategy from a PR perspective is extremely effective, no matter the coin, the way the company decided to raise capital (public, or private), nor the distribution mechanism.  In all examples cited above, all coins show a spike in Google search interests – demonstrating that airdropping is an effective marketing tool.

Which Impact Do Airdrops Have On Token Price?

You might expect that airdrops automatically lead to selloffs. However, things are a little bit more complicated than that. In the case of Ontology (ONT), the data clearly shows that the airdrops led to a continuous increase in the token’s value. This might be explained by the fact that as the project was not traded prior to the airdrop; therefore, no price action prior to the airdrop occurred which would have allowed a buy the rumor, sell the news type pattern. Additionally, due to the token being highly anticipated by the cryptocurrency community, the project being from the same house as NEO, many decided to keep hold of their airdrop tokens.

In the Case of OmiseGo (OMG) the story is quite different. The token was tradeable long before the airdrop, and therefore people being airdropped OMG tokens might not have been interested in receiving them, thus selling their tokens, resulting in a cascading effect. This demonstrates that from a price standpoint, it might be important to investigate whether the target audience to receive the airdrop are going to be interested in holding the coin. In our opinion, giving airdrops to people who are uninterested in a project might not be the best strategy as it might become bad publicity, leading to even true holders being exasperated.

For Tron, as for its Google search movement, it is hard to know what the impact of the airdrop was, given the fact that several other pieces of news such as the mainnet release were given in the same period. Nevertheless, since the airdrop occurred, we can see that the token price has been steadily declining, with some sporadic upswing movements, coinciding with the overall crypto market movements – leading us to believe that the airdrop had indeed no particular effect to TRX as a whole

In Conclusion

Airdrops appear to be a highly effective tool to raise awareness of a project. Additionally, many projects see airdrops as a way to create a network effect, which is highly important in the blockchain space, where network security is proportionally related to the diversification of holdings. Needless to say, for an airdrop to be successful, it needs to have an extremely strong community. A community that believes in the coin will continue to promote it over a longer period of time and won’t sell off as soon as the distribution is carried out.

We see that both tokens, ONT and POLY, completed a private sale but no ICO – meaning that airdrops might become a good strategy for VCs to invest, as well as to provide an exit option. As stressed before, regulatory frameworks surrounding ICOs are highly uncertain, leading to higher regulatory risks. Thus, VCs might be reluctant to invest in projects undertaking a public sale, and the airdrop solution enables them to bypass these. Moreover, by not conducting an ICO, investors have the possibility to opt for reduced vesting and lock-up periods – allowing them to have higher liquidity on their holdings and to sell their positions if wanted.

The problem is, given that the airdrop method seems to be increasingly used, blockchain users might find themselves with increasing numbers of coins in their wallets which they could find themselves wanting to get rid of quickly. This problem has been pinpointed by Brayton Williams of Boost VC, who told CoinDesk that issuers could do a better job at targeting a relevant audience, rather than sending tokens to all addresses of a blockchain. For instance, issuers could airdrop tokens based on geography, demographics, job, or other factors, to cultivate the best market for the future of the platform.

The author succinctly describes the different kinds of online influencers, and how airdrops could capitalise on their reach, leading to airdrops reaching the right people who might have an interest in specific tokens, as well as referring them to their friends and further audience. For instance, an energy network evolving in a certain country would have no value to users living outside the said country, while a well-targetted airdrop to people living in the area might lead to a genuine interest in the project. The author of the text mentioned above envisions AI-driven tools, which won’t scan blockchains, or ask for manual inputs in order to receive the airdrops, but will instead look for data telling us which addresses are owned by which kind of people.

We believe that airdrops are here to stay and will become a big part of companies’ user acquisition schemes, and being able to market these will be increasingly important. However, despite being highly effective right now, as more projects turn toward this strategy, the effectiveness is likely to diminish – meaning that new marketing schemes, as well as more accurate targeting will need to be used. 

Article Produced By
Jacek Bastin

Jacek graduated with an M.A. in Finance from the Shanghai University of Finance and Economics. He lived in Europe and Asia, and always loved to dig into papers and research projects to really understand the key drivers and trends. He’s passionate about blockchain’s business application, the sharing economy, and FinTech.

Bermuda Government Approves First ICO Under New Regulatory Regime

Bermuda Government Approves First ICO Under New Regulatory Regime

The government of Bermuda has awarded the first certification

for an Initial Coin Offering (ICO) under the island nation’s new regulatory regime for crypto and blockchain business, the country’s only daily newspaper, the Royal Gazette reports Oct. 18. According to the Royal Gazette, the Minister of National Security Wayne Gaines — whose office oversees ICT policy and innovation — announced that fintech company Uulala was awarded certification by the Bermudan government today at the Bermuda Executive Forum in Miami. In July, the Premier and Minister of Finance of Bermuda David Burt introduced new regulations on ICOs to the lower house of the country’s Parliament, the House of Assembly. The new guidelines require ICO issuers to provide detailed information about “all persons involved with the ICO.”

Issuers must also disclose a review of the project, detailing key aspects of the product or service such as the market audience, financing system, the amount of money that is planned to be raised, and technical aspects associated with software and blockchain specifications. The Royal Gazette reports that Uulala aims to improve financial inclusion of unbanked and underbanked people by providing financial services. The firm has reportedly developed a decentralized peer-to-peer network “to load cash into the digital economy.” Once funds are deposited, users purportedly have access to a virtual MasterCard, with which they can participate in e-commerce, as well as pay bills or send cross-border payments.

The company’s CEO Oscar Garcia told the Royal Gazette that Uulala aims to raise $50 million dollars in its token sale, and has already raised $10 million privately. Garcia noted the country’s thorough regulatory standards; it reportedly took four months for the firm to get approval for its license. Despite the wait, Garcia said: “Bermuda is known as a financial hub and it is very forward thinking on blockchain and fintech… They have a reputation of being excellent regulatory stewards and we thought that would be a better fit for us than a jurisdiction where we could say we’re good, they’d believe us and give us approval in three weeks.”

Bermuda has been cultivating a friendly regulatory environment for fintech, crypto, and blockchain-related business over the course of the past year. In addition to the aforementioned regulations, the country also began to amend the Banking Act in order to establish a new class of bank to render services to local fintech and blockchain organizations.The government has also signed memoranda of understanding (MoUs) with several blockchain and crypto-related companies to both promote the industry in Bermuda and create jobs for the local population.

Article Produced By
Aaron Wood

Aaron Wood is an editor at Cointelegraph, with a background in energy and economics. He keeps an eye on Blockchain's applications in building smarter and more equitable energy access globally.

https://cointelegraph.com/news/bermuda-government-approves-first-ico-under-new-regulatory-regime

Cryptocurrency Airdrops and Bounty Campaigns Face SEC Hammer

Cryptocurrency Airdrops and Bounty Campaigns Face SEC Hammer

Cryptocurrency Airdrops and Bounty Campaigns Face SEC Hammer

The regulatory scrutiny over ICOs has led to the arrival of token “airdrops,

or free tokens in exchange for a few marketing efforts. However, a recent ruling by the SEC may end this augmenting form of generating hype for many cryptocurrency projects in the U.S.

SEC Not Impressed

A U.S. Securities and Exchange Commission filing, dated Aug. 14, unveiled digital asset startup Tomahawk has received a $30,000 fine and a lifetime ban for allegedly employing “fraudulent marketing techniques” to amp up its fundraising efforts. A cease-and-desist order was later made public and cryptocurrency communities were quick to note a key detail of the SEC’s order: “Free” tokens were considered securities.

Tomahawk’s token issuance was said to violate Sections 5(a) and 5(c) of the Securities Act by “selling TOM tokens in the absence of a registered statement.” The court highlighted Tomahawk’s use of bounty campaigns and other marketing activities were “designed to foster the company’s economic interests” in addition to potentially causing market manipulation for its tokens. The absence of regulations means cryptocurrency entrepreneurs have been offering airdrops and bounty campaigns immune to security laws.

However, the filing states quite the contrary:

“On July 27, 2017, in response to the Commission’s DAO Report, Tomahawk published an article online titled ‘Tomahawkcoin ICO Adjusting to the SEC, by Legally Avoiding Them.’ That article incorrectly stated that Tomahawk’s ICO would be exempt from securities regulation because the Company was abandoning its plan to be quoted on the OTC market.”

Airdrops to be Illegal Soon?

Some crypto-enthusiasts ascertain the SEC’s issue is not cryptocurrencies, but the wayward process of token distribution. In this regard, Mashable reported on blockchain-based ride-sharing application Juno in 2017, describing the company’s enterprising reward of digital “shares” to riders using the platform.

Needless to say, the SEC stepped in to change the company’s core business ideals, putting in a formal request to shift from a digital share-rewards system to a cash-based incentive process. Moving forward–now that token issuers and ICOs are viewed as taboo by the U.S. lawmakers–it is expected that airdrops and bounty campaigns face comparable legal action and certain levels of scrutiny. The airdrop case weakens when blockchain entrepreneurs themselves describe the process in a satirical manner. Matthew Roszak of

Bloq said:

“In certain ways, people are getting free lottery tickets. There will be a tsunami of airdrops this year.”

Article Produced By

Shaurya Malwa

Post-mining his first bitcoins in 2012, there was no looking back for Shaurya Malwa. After graduating in business from the University of Wolverhampton, Shaurya ventured straight into the world of cryptocurrency and blockchain. Using a hard-hitting approach to article writing and crypto-trading, he finds his true self in the world of decentralized ideologies. When not writing, Shaurya builds his culinary skills and trades the big three cryptocurrencies.

https://cryptoslate.com/cryptocurrency-airdrops-and-bounty-campaigns-face-sec-hammer/

ICO portfolio is down by 66% in the first half of 2018, according to EY study

ICO portfolio is down by 66% in the first half of 2018, according to EY study

– 86% of tracked ICOs are below listing price; 30% lost substantially all their value

– ICOs claim to have raised US$15b in first half of 2018

– Top 10 ICOs listed in 2017 account for essentially all of the gains since issuance, with a majority in blockchain infrastructure

 In the first half of 2018, 86% of the leading initial coin offerings (ICOs)

that listed on a cryptocurrency exchange in 2017 are below their initial listing price and a portfolio of these ICOs is down by 66% since the peak of the market at the beginning of this year, according to a study from EY, Initial Coin Offerings: The Class of 2017 – one year later, that examined the ICOs' progress and investment returns. The study finds 30% have lost substantially all their value. There were gains among The Class of 2017 since their ICO, with most gains (99%) concentrated in the top 10 ICO tokens, the majority of which are in the blockchain infrastructure category.

The latest study follows an initial analysis in December 2017, when EY analyzed top ICOs representing 87% of the ICO funding last year. It found that a lack of fundamental valuation and due diligence by potential investors was leading to extreme volatility in ICO performance, which is still an ongoing issue. The study announced today found that ICOs claimed to have raised more than US$15b in 2018, compared with US$4.1b1 in 2017. However, EY found that only 29% (25) of the 2017 ICO projects that EY assessed have progressed to prototypes or working products – an increase of just 13% from December 2017. The remaining 71% have no offering in the market.  

Paul Brody, EY Global Innovation Leader, Blockchain, says:

"Despite the past year's hype around ICOs, there appears to be a significant lack of understanding around the risks and rewards of these investments. In addition, there is a disparity between those who invest in ICOs and the ICO project developers regarding the anticipated timelines of ROI. While ICOs are an entirely new way to raise capital, those participating should understand that there are factors – such as the slow progression toward working product offerings – that can introduce greater risk in ICO investing."

Utility tokens diminish in value

The study also examined the 25 companies with working products. Of those 25, seven were accepting payment in fiat currency as well as ICO tokens for their product offerings. As a result, customers can make purchases directly without buying the tokens issued in the ICO process, therefore bypassing the community of token holders and diminishing the value of the ICO tokens. In at least one case, an ICO company has abandoned ICO investors by no longer accepting their tokens (de-tokenizing).

Yuri Gedgafov, EY Tech Media and Telecom Center Leader, Central, Eastern and Southeastern Europe & Central Asia, says: "So far, utility tokens aren't creating the engaged communities anticipated to coalesce around innovative ideas. In fact, many of the most successful ICOs are mired in litigation or conflict over broken promises and unexpected changes in business strategy with little to no rights for the ICO investor."

Ethereum platform remains dominant

Ethereum is the dominant platform and shows the highest activity among developers and on social media. While new platforms arise on a regular basis, there is no sign that the new ICO infrastructure projects have had any success in reducing the dominance of Ethereum as the industry's main platform. Brody says: "It's clear that due diligence and awareness of risk are more important than ever. The number of ICOs showing gains since listing on one of the leading crypto exchanges is so limited that it would have required exceptional good fortune or a visionary portfolio strategy to have made any gains investing in the 2017 ICOs. At the moment, the level of reward in this market doesn't look like it justifies the risks involved."

Note to Editors:

About the survey

The survey collected data on global projects that have conducted ICOs and performed a detailed analysis of the top 141 projects, which collected 87% of all ICO proceeds, following up on their performance between January 2018 and September 2018. The ICO market is unregulated; there is no single source of ICO data, reporting standards or generally accepted methodology. The findings are preliminary and based on public sources, and EY cannot always match the information given by these sources with the transactional data available on the public blockchain. We based our study on project websites, the most popular crypto exchanges, ICO trackers, data aggregators and interviews. The figures on ICO funding volumes (total and per project) are derived from open sources as of September 2018. The EY analysis is of 141 ICOs from 2017. We did not audit or confirm the data and it is subject to change.

Article Produced By
News from EY

A wide array of domestic and global news stories; news topics include politics/government, business, technology, religion, sports/entertainment, science/nature, and health/lifestyle. Articles that appear in this section may be written in English or other languages

https://www.prnewswire.com/news-releases/ico-portfolio-is-down-by-66-in-the-first-half-of-2018-according-to-ey-study-300734346.html

Tips for holding a successful cryptocurrency airdrop campaign from a user perspective

Tips for holding a successful cryptocurrency airdrop campaign from a user perspective

I was reading an article from Payments Journal about

“Six Tips to Make Your Airdrop a Success” and thought I would write my little piece on the subject, from a user’s perspective.

Clarification #1: I’ve never run an ICO or airdrop campaign, so I have little understanding of technical aspect such as delivery of tokens, etc.

Clarification #2: Since starting my journey into my airdrop challenge I’ve signed up for around 15 airdrops, not to mention the ones that were scams and I could not complete for whatever reason.

What’s the point of this article:
Hopefully a company that is trying to run an airdrop reads this and improves their systems. Here are my tips from experience. Keep in mind that I can be wrong, and what I’m writing is purely my own opinion.

Switch from technical to simple

It’s easy to get caught up in the technical side of things when it comes to an airdrop. After all, the ICO and cryptocurrency realm is highly technical. The only problem with this notion is, that most people that sign up for airdrops probably learned about it from a friend, a forum post or some kind of website like mine.

These people can be complete crypto noobs and might have just recently bought their first piece of Bitcoin. They can understand basic instructions, but anything too technical and you are setting yourself up for a support nightmare. Even confusing instructions, weird website setups or strange forms is not a good idea. Make your airdrop user-friendly. It’s that simple.

Be clear on the following:

  • Exactly what a user needs to do to earn/receive airdrop tokens.
  • When will a user receive their tokens?
  • How much is each token worth or will it be on launch day?
  • What is your total airdrop token value?
  • When will you receive your tokens?

Confirm that your airdrop is not a scam

I hate signing up for an airdrop only to realize that it’s probably a complete scam and that I will never see those tokens in my wallet. Not only did I just waste time, but I probably just gave away my email address or entered personal details into a form that I rather would not have done, especially now that I know it’s a scam. There should be two parts to this:

Airdrop hosting

Host your airdrop on your main website! This is so simple, yet I can’t understand why so many ICO’s and blockchain projects try to collect user data via a Google form. It’s a complete joke. If your project is worth anything you should have a developer or designer that can create a page for your airdrop that can collect a form, have a user dashboard, etc. Lately, if an airdrop is not on a project’s website, I just don’t even bother filling out the form – OR READING ABOUT THE ICO. Isn’t that what it’s all about, to gain exposure?

Make sure information about the airdrop is shared across all your social media accounts. You can also go the extra mile and create a blog post on your company blog, Medium.com, and Steemit. Also, register as a company representative or the company yourself so that it looks legit. Please stop using some Bitcoin forum as your main portal for airdrop announcements. Sure, you can use it get people to promote it and announce bounties, but it has to be on your official website or point to it.

Scam prevention

Choose an employee or higher a virtual assistant to scour the web on a regular basis for people hosting a fake airdrop for your coin. There are just so many airdrop groups on Facebook, subReddits, etc. they would have to join to find out. You could even set up Google Alerts. Once a scam airdrop for your token or ICO is discovered, do whatever you can to close it down by reporting them to the platform they are on. Also, notify your subscribers to warn them of the scam.

Utilize as many social media platforms possible

If you care about gaining exposure for your ICO or blockchain project allow users to get the word out on multiple social media platforms and award them accordingly. This should include Facebook, Twitter, Medium, Reddit, Facebook groups (multiple share options), Steemit, YouTube – just to mention a few. Also don’t be skimpy with your reward system. The more you give, the more you get which takes me to my next point.

Reward users fairly

I’m okay with signing up for an airdrop that gives me $5 worth of tokens, but anything lower than that it starts to lose my interest. Also, if the airdrop is that low ($5), let’s face it $5 isn’t much, then please don’t expect the user to like and follow all 10 of your social accounts to get it.

And don’t let me get started on rewarding users $1-$2 per referral. Sure it might sound easy drive referrals to an airdrop page, but it isn’t always as simple as it sounds. Reward them accordingly. At least make an airdrop reward around $5. This way you will probably generate much more exposure and motive affiliates. Don’t be skimpy. I would much rather sign up AND READ ABOUT AN ICO when the airdrop gives you a good amount of tokens $10+.

Use technology to your advantage

This part admittedly I lack in experience and knowledge, but really if you have a team of expert developers working for you, surely you can figure it out. Use technology to track user signups, create a dashboard for easier tracking and confirmation of tasks completed for additional tokens, make it easy for users to see their token balance, etc.

The dashboard in my honest opinion is a great option. I love being able to log into my account and check my latest referral and airdrop statistics. Why can’t every airdrop campaign have this? You can even have a page on your website that details the number of airdrop tokens distributed and enable checking of wallet addresses etc to see how many tokens they will receive. EOSdac did something similar.

Check that everything works before launching

Why would you start an airdrop campaign only to have to tell users “we’re busy fixing the bugs, please be patient.” This is entirely unprofessional and just means you did not prepare correctly or test the airdrop. The simple solution is to test that everything is working before you launch the campaign.

Article Produced By
Crypto Coin Authority

http://www.thecryptocoinauthority.com/successful-airdrop-campaign-tips/

Journalism Blockchain Startup Civil Cancels ICO, Refunds Investors

Journalism Blockchain Startup Civil Cancels ICO, Refunds Investors

Crypto and blockchains startups, even those that hold great promise,

have sadly received the full brunt of 2018’s dismal market conditions, resulting in a widespread loss of clients and investment interest. For example, freshly-printed studies have revealed that Coinbase, widely regarded as this industry’s golden child, saw 80% of its U.S.-based customer base dissipate, resulting in a similar decrease in volumes. But most recently, on Tuesday, Civil, a promising blockchain-centric journalism startup, revealed that it had suffered a great setback.

Blockchain Startup Suffers Setback Amid Bear Market

While the conditions of 2018’s crypto winter are something that investors have grown accustomed to, Civil, an upstart blockchain startup, recently revealed that it had to formally cancel its initial coin offering (ICO) due to a lack of interest. For those who missed the memo, Civil’s raison d’être, if you will, is to revolutionize how digital journalism is managed from the ground-up. When it was founded in 2017, the company’s top brass envisioned a “new economy for journalism,” with many of the firm’s co-founders visualizing a series of platforms that brought change to this age-old industry.

However, ambitions don’t come without a cost. And in the case of Civil, that cost was one of a monetary variety. So while the firm initially saw a $5 million seed investment comes its way from ConsenSys, the Google of the blockchain world, Civil still craved capital. More specifically, the startup remained hell-bent on its plans to raise a minimum $8 million via an ICO of its CVL Ethereum-based tokens. But now, after the company’s one-month-long, long-awaited Civil Token ICO has finally elapsed, it is apparent that the startup overstated demand for its ICO, missing its soft cap by $6.5 million dollars. As reported by TechCrunch, although the firm’s head was in the clouds, in the end, only 1,012 investors purchased $1,435,491 worth of CVL tokens.

Seeing that it missed its soft cap by millions, Civil has sadly announced that it will be providing compensation to all participants of its ICO, with refund transactions being slated to be sent by October 29th. In a testament to the resilience of crypto innovators, who will stop at nothing to achieve the improbable, Civil has since revealed that it isn’t ready to shutter its blinds and close its doors. In fact, in a status update, Matthew Iles, the founder and CEO of the startup, alluded to the fact that his firm had learned from its mistakes, immediately divulging plans for a “much simpler token sale.”

Attempting to turn the unfortunate situation on its head, Iles adding that “Civil isn’t going anywhere [and is] here to say” due to a $3.5 million investment from ConsenSys, who seems to be a big believer in the startup. Eventually, following its second token sale, along with the use of its now-stocked up war chest, Civil intends to release a blockchain-publishing WordPress plugin, a “community governance application,” and a developer tool for utilizing data gathered by the firm’s operations.

The Brooklyn-based firm also inked a strategic deal with the world-renowned Associated Press, as reported by NewsBTC on a previous occasion, who will use Civil’s products to better its business in multiple capacities. Along with the Associated Press, Forbes also recently joined hands with Civil, which will see the major media outlet run the startup’s blockchain applications through the works. So while a failed funding round may have spelled the end of any other crypto project, Civil’s drive for innovation likely only rose exponentially after its ICO went kaput.

Article Produced By
Nick Chong

https://www.newsbtc.com/2018/10/17/journalism-blockchain-startup-civil-cancels-ico-refunds-investors/