As more ICOs projects seem to disappear, the media and regulators have stepped up their warnings to investors over ICOs with no business plans and working products. These risky investments represent a large part of ICOs conducted in 2018.
Investors Rewarding DApps With Viable Businesses and Token Value Creation
Yet a closer analysis shows that more ICO investors are doing their due diligence. They are rewarding blockchain startups with operational business plans and products. Of the $18 billion raised across 770 ICOs so far in 2018 – as tallied by CoinSchedule.com – investors are not throwing money at fairy dust but viable businesses.
There is a clear increasing trend towards investing in blockchain startups that are creating value. The top four ICOs of 2018 are EOS ($4.1 billion), Telegram ($1.7 billion), Petro ($735 million) and TaTaTu ($575 million). Also in the top ten are Huobi – one of the top cryptocurrency exchanges by volume – and Bankera – a crypto bank fork of crypto exchange SpectroCoin – which has half a million customers.
Creating Value for Token Holders
In the crypto economy, it is not enough to only to create value for the blockchain platform – value must also be created for the community of users.
While there are exceptions such as Venezuela’s Petro crypto backed by its oil assets, most of the top ICOs have developed innovative new value creation models that are attracting new users.
BAT (Basic Attention Token)
The team behind the BAT token has caused a micro-disruption within the online advertising industry through their integration with their web-browser product, Brave.
The Brave browser is currently competing for market share with both top web-browsing giants, such as Google Chrome but also ad-blocking plugins. Brave can already boast page-load times that are 2x faster than Chrome and unlike traditional ad-blockers pays users for their attention. It is available on Windows, MacOS, Linux, Android, and the mobile Apple Store.
Binance Coin is an exchange token used within the Binance exchange – one of the world’s leading cryptocurrency centralized exchange platforms. The BNB Token is used to reduce trading fees on the Binance platform, giving a 50% discount to users who choose to pay with the BNB coin. Even in a bear market, as was in the summer of 2018, the price of BNB held as users continued to use the trading platform.
Steemit is an example of a platform that pays users for generating content. Steemit launched a type of Social news community site in March 2016. The team has built a social networking website that uses its Steem blockchain-based rewards platform for publishers. The Steem blockchain produces Steem and Steem Dollars which are tradable tokens obtained for posting, discovering, and commenting on content.
Steemit is the blockchain alternative to Reddit. Steemit pays its users to create and curate content by voting on it. Since Steemit’s launch in June 2016, it has paid over $40 million in rewards to its users, whose numbers are climbing towards the 1 million mark. The 1.5 million monthly posts span a wide variety of topics, but cryptocurrencies and ICOs are among the most popular. With a market cap of $222 million, Steem ranks 37th among ICOs.
TaTaTu is a great example of a project that raised over half a billion dollars in fundraising and is already generating value to its users and investors. Similar to Steem, the team behind TaTaTu is creating a new generation of consumer value creation models. The social entertainment network is rewarding token holders in three ways.
1. Get Paid for Producing Content
TaTaTu has tokenized social entertainment. Users are rewarded with TaTaTu tokens (TTU) when they add video and other entertainment content online.
The blockchain’s ability to track and audit transactions and other activities is making this new incentivized world possible. Internet pay-per-use and pay-per-click models have been plagued with accountability and credibility issues. Automated bots are well known to generate phantom traffic with fake clicks on Internet websites. The blockchain prevents false traffic by providing a transparent record of all activity. TaTaTu has leveraged the blockchain’s technology to record IPs so that users can see that the traffic is coming from legitimate viewers. In addition, real-time financial reporting is provided.
2. Get Paid for Consuming Content
TaTaTu community members also receive tokens when they watch videos, sports and other entertainment content and share them with their friends. Token holders also get voting rights on what type of content to allow on the site.
Is Tatatu the Netflix disruptor? Consumers no longer have to pay content providers for their attention or even give it away for free. Among a plethora of ICOs employing the pay-for-content consumption model, Current Media’s $36 million fundraiser stands out. The media content provider owned by Dallas Mavericks owner Mark Cuban has integrated traditional media including Apple Music, YouTube and Spotify, for which traditional premium subscriptions are required. So why not use Apple Music directly? The CRNT credits earned by consuming music and videos can go towards your premium subscription costs. Current Media, already a top 20 IOS lifestyle app, has surpassed Netflix.
3. Own and Sell Your Data
Potentially the most valuable incentive on the TaTaTu platform is providing users control of their personal data. They decide if and what to sell to advertisers. On the TaTaTu site advertisers in turn, can collect more specific data on their audiences allowing them to better target their advertisements.
The democratization of data is an especially attractive feature to Internet users who have long been concerned about the sale of their data to third parties by e-commerce and social media sites, often without their knowledge or permission.
The market potential is evident in the popularity of South Korea’s AirBloc—a mobile app that allows users to opt-in to share their data with other apps. Two-thirds of South Korean smartphones are already linked to the service. AirBloc has raised $2.3 million in private equity from over a dozen major investment firms.
Only 1% of the world’s 16 zettabytes of data is being analyzed, reports Ocean Protocol. Ocean Protocol has raised $22.1 million for its blockchain platform, which connects consumers and their data with AI applications, a field hungry for data to feed sophisticated analytical algorithms.
Earning High ROIs
In addition to the incentives and rewards paid to token users by these DApps, these commercially popular markets are creating market value for token holders. Most of the tokens mentioned in this article can be found in the top 100 tokens by market cap and ROI (e.g., Ethereum, EOS, Huobi, Binance, NEO, Steem).
Not surprisingly, blockchain competitors to Ethereum seeking to provide a faster and more scalable, and thus more commercially viable, blockchain are also among the top 2018 ICOs (e.g., EOS, Orbs) and ROI generators (e.g., NEO).
The market is clearly becoming more discerning about where it invests its ICO money. If an ICO does not have a working business model, it most likely has a game-changing disruptive blockchain concept. Investors are excited about Dragon, the number five spot at $420 million among 2018 ICOs. The DApp is replacing the exclusive gambling tables of Macau, which charge elite gamers as high as a 10% commission on the $100,000 minimum, with low fee virtual crypto betting.
Why pay such high subscriptions when a TaTaTu will pay you? TaTaTu has earmarked $50 million in sign up tokens, offering 50 tokens to each new user to start consuming content. Better still, as you create and consume content you can get compensated for the data you generate.