ICO’s – the More I Know the Less I Like

A very interesting question came up on Reddit today:

What happens when one of these ICO companies get bought out?

I hadn’t thought about this. Apparently there is no equity stake involved when buying tokens.

When companies issue tokens, they collect the money generated by the tokens. But they often owe you nothing in return (you have to read each ICO whitepaper to be sure of what you get).

But what happens if they sell the company? There is no mention in the token whitepaper aka terms and agreements about equity.

Read the Unikorn whitepaper launched with Mark Cuban: Its here.

Nothing in there regarding a sale of the company, but they do clearly state that benefits are, well, speculation that the price of the token will rise:

UnikoinGold holder benefits:
1. Granted bonus UnikoinSilver when they create a crypto-wallet
2. Granted UnikoinSilver when they bet with UnikoinGold
3. Opportunity to purchase additional raffle tickets for prizes using
their UnikoinGold
4. Opportunity to bet on on the most immersive skill and spectator
esport products, some of which will be exclusive to UnikrnGold.

What will they do with the money:

Budget Allocation of ETH Raised
5% Contractors
8% Contingency
12% Marketing (mostly organic)
15% Administration
60% Platform Development

Token Distribution
Total Tokens: 1 Billion
Partnerships & Marketing: 15%
Unikrn Betting Reserve: 15%
Initial Token Sale: 20%
Unikrn Internal: 50%

So the actual investors keep most of the tokens and only roll out 20% to the general public. I’m sure as the price rises they eventual cash out. Really its 100% free capital to the company. Actually, its more than that. The investors are getting free money, too. These tokens are fabricated out of air and nothing stops them from issuing more in the future or dumping a bunch on the market, or simply exchanging their tokens for Ethereum and cashing out.

Its really a brilliant model for compaies looking to raise capital with no strings attached.


Leave a Reply

Your email address will not be published.