Ethfinex plans to host token sales and ICOs within its platform. The company has developed what they believe to be a more equitable method for involving investors in ICOs.
Will Decentralized ICOs Level the Playing Field?
Ethfinex will soon offer users the opportunity to participate in token sales and ICOs provided directly through the exchange platform. Both Ethfinex and Bitfinex are under the umbrella of parent company iFinex Inc and a message on Ethfinex’s blog says that additional details of the first sale are expected with days.
Ethfinex’s platform is also undergoing a series of upgrades that will improve user experience and ensure that the platform has the functionality to support token sales. The platform will utilize a “random draw mechanism’” to select users who are cleared to participate in token sales. This is intended to prove that the process is fair.
Ethfinex also mentions that the majority of token sales on the platform will be “exclusive to Ethfinex or available to Ethfinex users on favorable terms.” The company suggests that the in platform sales level the playing field for smaller investors who might normally be restricted from participating in ICOs that only allow accredited and institutional investors.
Un-Natural Selection?
While the “random draw mechanism” is supposed to level the playing field for potential investors of all backgrounds. Ethfinex users holding the platform’s loyalty token, Nectar (NEC), fall into the platform’s “Superuser” category, and will be have the opportunity to enter each drawing more than once — thereby improving the probability of being selected to participate in token sales.
In order to participate in ICOs, users will need to provide their know-your-customer (KYC) details and Ethfinex will run this information through BlockPass. Once completed, users are permitted to participate in current and future token sales. Ethfinex also pointed out that it will host platform specific token sales and also participate in larger ICOs.
Here’s Hoping
2018 witnessed a marked slowdown in ICOs and Ethfinex’s new ICO platform arrives on the scene at an interesting moment. Surely they are fully aware that ICO funding dropped from $2.5 billion in February to $181 million by September 2018. Perhaps the decentralized ethereum-based exchange is hopeful ICO activity will spike in the event that the long-awaited institutional investor funds flood the market in Q1 – Q2 of 2019.
What are your thoughts on Ethfinex’s in-platform ICO and token sales? Share your thoughts in the comments below!
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