Binance IEOS, the three majors!
The last post touched briefly about the basics of an IEO. This post will Highlight three IEOs that were done on the Binance launch pad, namely, BitTorrent, Elrond, and Matic. These three are selected because they provide either real-life utility with chances of adoption, enormous return on investment or shows promise for the future.
BitTorrent is probably the most well-known of the three. It is one of the most common protocols for transferring large files, such as TV shows, videos, or songs. It is estimated that the peer-to-peer network collectively accounts for approximately 40% to 70% of all internet traffic, depending on location (2009). So when the public heard that BitTorrent was doing an IEO, they were ecstatic. The return on investment (ROI) at the all-time high (ATH) since the IEO was over 1400%. An investment of $1,000 could’ve made $14,000. However, the ROI since the IEO has significantly dropped to 263%, which still wasn’t a bad investment
Usage of the token
BitTorrent has connected itself with the TRON blockchain and will offer a new BitTorrent experience. The token can be used for a new feature called BitTorrent Speed. The problem with seeding a finished download is that there is no economic incentive to keep on uploading the finished download. Usually, when someone has downloaded a file he or she requires they often shut down the BitTorrent program, only in private groups do people seed continuously. BitTorrent Speed is the company’s answer to this inherent problem. BitTorrent Speed will enable peers to offer each other cryptographic tokens to continue seeding the files after the full download has completed. BitTorrent Speed is just one example of a use case for the token. The company keeps working on new use cases.
Elrond’s inception was in Q4 of 2017. The technical whitepaper was released in Q2 of 2018. The prototype was publicly released in Q3 of 2018. The testnet was released in Q2 of 2019. A lot of progress was made by Elrond in a short amount of time. Elrond made incredible progress, from an abstract idea of creating an infrastructure similar to Bitcoin and Ethereum to an actual working testnet in a time span of two years. It definitely reflects that in its price. Elrond’s ROI at the ATH was 1423%, however, similar to BitTorrent it has significantly fallen quite a bit. At the writing of this piece, the ROI stands at 143%.
Usage of the token
Elrond’s use case is to outperform the incumbent infrastructure (Bitcoin and Ethereum) in transaction speed, scalability, and safety. With its Adaptive State Sharding, the throughput of transactions will exceed 12K per second and its latency will be around 5 seconds. The performance could be the answer to most of today’s scalability issues. The network uses a Secure Proof of Stake consensus mechanism, validators that stake tokens will be nominated by other stakeholders to verify transactions for Elrond token rewards. The token is what powers the network. It will act as an entry point for the network and provide the means to pay for transactions, dApps deployment on the network, storage, smart contracts executions and as rewards for validators. The transaction fees will be split between validators and the Elrond
Matic can be seen as the solution to Ethereum’s low number of transactions per second, high confirmation times and high transaction costs. By utilizing an adaption version of the Plasma framework, Matic can provide faster and extremely low cost transactions on the Ethereum main chain. By using Proof of Stake, Matic can cut transactions times and still stay secure.
The company is starting with Ethereum and already has a working implementation on Ethereum’s Ropsten Testnet. Matic is not stopping with Ethereum alone, it intends to support multiple blockchain in the future, which will enable interoperability between blockchains.
Similar to both BitTorrent and Elrond, Matic’s IEO also saw Incredible returns. At the ATH, Matic has and astronomical return of 1618%. More than BitTorrent and Elrond. However, like the two other projects the price has tumbled and currently has an ROI of 407%.
Usage of the token
Also similar to Elrond, Matic’s token is used to power the Matic Network. Via PoS Matic keeps it network secure and pays out rewards for validators. The token will be used as a form of payment for usage of the network. A small portion of the transaction fees will be used for further development of the Matic Ecosystem and will be distributed using the onchain governance.
Unicorns fall too
As investments go these investments have done particularly well in a relative short amount of time, but also have fallen quite a bit since their all-time high. A promising future does not necessarily reflect itself in the price. As seen with the three projects discussed, each project has enormous potential, have an MVP and are actively building on top of its existing product. Yet, all three lost over 1000% of ROI counting from the ATH. These are exceptional IEOs and must not be taken as standard projects. IEOs still are risky investments. An investors should always diversify its portfolio.