Initial Coin Offering (IPO based) — it is an issue of shares or tokens with which it is intended to pay for the project’s services in the future. ICO is also called as another form of crowdfunding, where participants are funding the development of the company now in order to benefit from it in the future.
One of the first projects with Russian roots who conducted an ICO in 2014 has become Ethereum – by Canadian of Russian origin Vitalik Buterin. During the ICO the company has managed to raise $18.4 million, and as the result one of the most popular cryptocurrency Ether (ETH ethers) was released.
In 2016 the blockchain platform Waves also held the ICO which had attracted $15.7 million and the developers indicated that their project (unlike Ethereum) is not just another cryptocurrency, it is the system for crowdfunding.
Now different teams (including Russian) are often carrying out ICOs using Waves platform. But the company recognizes that in this respect the Ethereum platform is ahead of them now. Most startups conduct ICOs with Ethereum.
Famous Russian Startup ICOs:
– Industrial ZrCoin startup, which is going to produce synthetic zirconium dioxide, raised $4.5 million form blockchain-platform Waves. ICO started on 11 may 2017.
– A decentralized social network, “Golos” (Voice) attracted 600 bitcoins. ICO was launched on 1st of November 2016. “Voice” did not use platforms such as Ethereum or Waves for its ICO . To raise funds, the project team provided the genesis-address 3CWicRKHQqcj1N6fT1pC9J3hUzHw1KyPv3. It is designed to redirect the bitcoins transferred to a unique address, and is generated for each participant of ICO.
– Operating system for “foggy” computing SONM — raised $42 million from blockchain-platform Ethereum. ICO started on June 15, 2017.
– Farming company “Ecosystem of Kalinovo” raised $510,5 thousand on the blockchain-platform Waves. ICO was launched on 1 April 2017.
– Operator of encrypted VoIP-telephony “EncryptoTel” raised $4.4 million from blockchain-platform Waves. ICO was launched on April 24, 2017.
– Mobile gaming platform “MobileGo” focused on the acceptance of cryptocurrency, and raised $53 million on the blockchain-platform Waves. ICO started on April 25, 2017.
– Russian-American startup accelerator “Starta” ICO started on July 4, 2017. The project to raised $5 million. ICO was conducted by Singapore company Cross Coin and held at the blockchain-platform Waves.
The founder and CEO of Waves Alexander Ivanov said that one of the main advantages of ICO is an opportunity for startups to emerge into the international markets attracting investments from Asia, Europe and the USA. This process of raising funds is relatively new and the difficulty is that there is no clear legislation and clear rules. “ICO is a new emerging market that is still out of control,” explains Ivanov. The success of ICO projects comes from the ability to interact effectively with people and to have a clear and well-formed product for which the funds will be collected.
Ivanov predicts that in the near future, ICO will be held not only by startups but also by big business. The Waves founder believes that ICO is a bubble that will sooner or later begin to deflate, leaving only the most promising projects.