ICO With Tokens of Absolutely ‘No Purpose’ Raises a Staggering $700 Million
Just when you thought today’s crypto-craze couldn’t get any crazier, the Wall Street Journal had this to report:
One of the hottest cryptocurrency investments of 2017 comes from a software startup that doesn’t plan to sell any software and describes what it is selling—something called a digital token—as having “no purpose.”
The company, called block.one, has so far raised around $700 million through an essentially useless token called EOS. The offering is probably the largest ICO of the year, and as the Journal points out, “is larger than all but 10 of the 195 U.S. initial public offerings this year.”
How useless is EOS? Well, block.one aims to use the cash to build “a new blockchain architecture designed to enable vertical and horizontal scaling of decentralized applications.” Those using the platform can launch apps, and those apps in turn can potentially use digital tokens.
However, EOS won’t be one of them. They “do not have any rights, uses, purpose, attributes, functionalities or features” related to the software and if you still aren’t sure about that, here’s what the company wrote in big bold letters in it’s white paper:
PLEASE NOTE: CRYPTOGRAPHIC TOKENS REFERRED TO IN THIS WHITE PAPER REFER TO CRYPTOGRAPHIC TOKENS ON A LAUNCHED BLOCKCHAIN THAT ADOPTS THE EOS.IO SOFTWARE. THEY DO NOT REFER TO THE ERC-20 COMPATIBLE TOKENS BEING DISTRIBUTED ON THE ETHEREUM BLOCKCHAIN IN CONNECTION WITH THE EOS TOKEN DISTRIBUTION.
Some dudes however, remain unconvinced:
Mosala Sehloho, a 32-year-old media producer in Johannesburg, said he understands the EOS tokens made no contractual promises, but he thinks the $10,000 worth he bought will rise in value. “I’d buy more” if the price dropped enough, he said in November. “This will be the technology that will be the best of its kind.”
Matthew Roszak, one of block.one’s early investors, said EOS holders shouldn’t worry too much about the warnings the company has given about the tokens. “I don’t think it’s fair reading into that language too tightly,” he said. Given the “regulatory environment is as clear as mud,” he said block.one needed to write something to provide the broadest protection possible.
EOS is reportedly the brainchild of Brendan Blumer, a 31-year-old Hong Kong-based entrepreneur, and Dan Larimer, a digital-currency vet with a few coin offerings under his belt. Brock Pierce, a former child actor and noted bitcoin investor, is described as a key backer of the project.