Initial Coin Offerings (ICOs), the cryptocurrency version of crowdfunding, helped many Chinese blockchain startups raise faster funding this year, but also led to China’s clampdown on ICOs. In today’s series, we will take a glimpse at how Chinese blockchain businesses raise money after crowdfunding platforms were shut down.
Also Read: Reports of Israeli ICO Ban Are Fake News, Entrepreneurs Look to Create ‘Crypto Nation’
Create Project Closed Groups
Measurable Data Token(MDT), a decentralized data exchange ecosystem, will be used to stipulate and reward users sharing their data to enterprises. The MDT team doesn’t use any PR services to reach as many people as possible in the world. Instead, they simply create a Wechat group and send group members an email explaining investment details. To attract investment, they promise 25% bonus to early bird investors and tokens purchased will be unlocked in 30 days when MDT is listed on exchanges. Sound enticing?
As of the time of writing, there are still less than 400 people in the group. An investor told news.Bitcoin.com that:
The project is really slow. They have been raising for over two months. Ever since exchanges were shut down, most investors just want to sell tokens they already have on hand. They don’t have much enthusiasm for new projects.
Initial Exchange Offerings
Mixin is an EOS-based real-time communication tool that can transfer coins using end-to-end encryption, according to its official website, the project has a 1,000,000 XIN token cap. Among which, 500,000 XIN will be reserved for the Mixin team. 400,000 XIN will be listed as an XIN/EOS trading pair on BigONE without price limit from November 25 until December 25. Orders will be executed according to price-time priority as received by the Bigone matching engine. The sale will end as soon as 8,000,000 EOS have been matched. Investors jokingly call this type of crowdfunding ‘Initial Exchange Offerings’ (IEOs) that synchronize token sales, token distribution, and tokens being listed at exchanges.
The rest of 100,000 XIN will be sold to whitelisted users after Dec 25 at the lowest Bigone price. How to be a whitelistes user? Register on the platform with your phone number and you will get an invitation code and a link. Send the link to others and if anyone registers with your invitation code, both you and the invitee will get a fixed share of the whitelist quota. Further invitees of invitee will also credit some shares to the original invitor, up to 7 levels.
This is why invitations with links to register Mixin have been clustering all wechat groups these past two days. Group members complain that this type of marketing reminds them of Ponzi schemes, especially considering that the project hasn’t released any information about the development team and roadmap, not even a whitepaper.
ICOs or IEOs, some projects rule out such efficient approaches to receive whopping financing. Nerthus is a Shenzhen-based blockchain startup that uses the Directed Acyclic Graph technology (DAG) to create a universal blockchain programming platform, it says. COO Erica Chen explained to news.Bitcoin.com that they are seeking support from traditional investors. “These investors don’t know much about blockchain. We have to spend a lot of time explaining to them. And they keep asking when the project will be launched and want to monitor our project progress,” notes Erica.
Once bitten, twice shy. Do you think the ICOs-led boom in entrepreneurship will occur again? Leave your comments below!
Images courtesy of Shutterstock, and WeChat.
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