In our crypto community, although there are innovations in various technologies and application scenarios, for us old leeks, the biggest impact is the innovation in asset issuance methods.
Almost every time there is a new asset issuance (Ge Jiu Cai) method, it will bring a wave of wealth effects.
Today, let’s sort out the characteristics of previous asset issuance methods:
PoW
When the Longyi Bitcoin of our cryptocurrency first appeared, the issuance method was PoW (proof of work). All early tokens followed this model, including Litecoin ($LTC), Dogecoin ($DOGE) and early Ethereum.
Source: Crypto Market Observation
The advantage of this method is that as long as there is a unified standard for working methods (usually mathematical operations), anyone can join.
The coverage that can be charged in the early stages of the project is high and the threshold is low.
Of course, after the project becomes popular, the threshold will not be high in the later stages. Not only do you have to fight for hardware equipment, but you also have to fight for electricity costs and operation and maintenance capabilities.
Although this issuance method is friendly to users, it cannot raise funds for project parties.
Private placement
This method has actually been used in traditional industries for many years, and there is actually no essential difference between private equity in the encryption industry and traditional private equity. Investors and project parties can negotiate the terms
However, most projects did not issue coins when conducting private equity financing, so SAFE developed into SAFT with reference to equity investment.
SAFT stands for Simple Agreement for Future Tokens (Simple Agreement for Future Tokens). This method is highly compliant and almost all mainstream projects now use this method to raise funds.
However, this method is mainly suitable for professional financial investors, and the threshold for retail investors to participate is still a bit high.
IXO
The IXO we are talking about here includes various derivative forms of ICO, IDO, and IEO.
Let’s first talk about ICO (Initial Coin Offering), the initial public offering of digital currency.
Source: Crypto Market Observation
ICO Initial Coin Offering, derived from the concept of initial public offering (IPO) in the stock market, is the first issue of tokens by a blockchain project.
Earlier ICOs were very similar to private equity. The project team also had to prepare a bunch of project materials to introduce the project to investors. However, recent ICOs have been misled by Solana. The project team only needs to send a message and leave an address.
This has been introduced in our previous Solana marketing videos.
As the gameplay deepens, ICO has evolved into IDO and IEO.
Source: Crypto Market Observation
IDO stands for Initial DEX Offering, which refers to the initial issuance of tokens based on a decentralized exchange (DEX).
In plain language, the project team builds a pool on Uniswap or other DEX, which is IDO. If retail investors want to obtain this token, they can buy it on DEX. Currently, the mainstream method for Tugou projects is IDO.
Source: Crypto Market Observation
The full name of IEO is Initial Exchange Offerings. Similar to IDO, if the project party does not list DEX at the beginning, but a centralized exchange, it will be an IEO.
At present, the threshold for IEO is higher than that of DEX, because anyone can build on DEX, and at present, centralized exchanges will still conduct some review of projects. Most of the tokens issued through IEO are raised from private placements. project.
Airdrop
Many crypto projects will issue coins through Airdrop when they need an active community.
Friends who often pay attention to encryption will definitely be familiar with this concept, which is just like stroking your hair!
However, this method has become increasingly difficult recently. On the one hand, many project parties are fighting against witches, and it is becoming increasingly difficult to expand profits through technical means. Moreover, the airdrop rules of some projects are becoming increasingly opaque. For example, the founder of the TAIKO project even refused to disclose the rules:
Source: X
At present, the distribution method of airdrop seems to have more and more conflicts between project parties and users, and it has even evolved into rivalry. The first thing most people do after receiving airdrops is to sell, because they are afraid that they will sell too late and not be able to sell at a high price.
Fairlaunch Fairlaunch
It is precisely because of the increasing antagonism between project owners and users of airdrops that the fair launch model became popular in 2023, and the representative asset is the inscription.
In this way, the project team and retail investors grab chips together, and shout together when they finish.
But this kind of gameplay without any threshold, although fair on the surface, can be said to have been killed by scientists in the end.
A large amount of chips in many projects have been snatched away by scientists, who have become actual dog farms and have even more chips than the project parties.
At the same time, projects using this method cannot raise money, and it is impossible to expect scientists with a lot of chips to build.
Node sales
Time has come to 2024. Recently, more and more projects have issued tokens through the node sales model.
Because a decentralized network itself requires a large number of nodes, in the POW era, users’ mining machines are actually nodes.
However, the project side cannot obtain financing in this way, and the money paid by users to purchase mining machines is actually given to production companies that have nothing to do with the project.
The essence of the node sales model is that by selling nodes, the project official can not only obtain financing, but also users can participate in project construction and obtain income.
This method may become the mainstream method for many encryption projects in the future, and it is better than the methods mentioned before.
Source: Crypto Market Observation
What are the projects currently using node sales?
There are three leading projects this year: XAI, Aethir, and Sophon
XI
This round of node sales can be said to be driven by XAI.
XAI is a project launched on Binance in January this year. This project is the biological son of Arbitrum and is a Layer 3 for games.
Source: Crypto Market Observation
The XAI project sold 35,155 nodes, with a sales amount of 13,080 Ethereum coins, and raised US$40 million based on the Ethereum currency price at the time.
In the token economics of this project, 85% of the tokens released are used for node rewards, which is approximately one billion. Based on the recent market capitalization of US$0.76, the average floating profit of node investors is about 20 times.
Source: Crypto Market Observation
Source: Crypto Market Observation
Both investors and teams have a 6-month lock-in period. After a few months of mining, should node investors get their money back before other investors unlock it?
In fact, it is not the case. After the node mines the token, it does not get the token immediately, but gets esXai. You need to wait 180 days to convert esXai into $XAI. There are two options. If you convert it within 15 days, you can only get it. to 25% of $XAI. Get 62.5% of $XAI in 90 days.
They will go
Source: Crypto Market Observation
The Aethir project should be familiar to everyone. I introduced it before when I introduced AI depin. It is also the leading project in AI computing power.
Aethir began selling nodes externally in March this year and has sold 74,040 nodes with a sales amount of 41,627 Ethereum coins, which was US$130 million based on the price at that time.
The release rules for Aethir are not specified, except that there is a 4-year release period. Node rewards are only 15% of the total amount, and are expected to be around 5% to 7% in the first year.
The fundamental reason for this is that Aethir also reserves a large part of the reward for mining by computing power providers.
Sophon
Source: Crypto Market Observation
Sophon is a modular blockchain project that received $10 million in financing from OKX in March this year.
Sophon has sold 121,261 nodes, with a sales amount of 31,087 Ethereum coins, worth US$96 million.
Did you see that since node sales have become a fundraising method, private equity has become less popular?
The final income tests the project layout
However, node sales are still a nascent issuance model. XAI is the first project to take advantage of this round. At present, the tokens of node investors have not yet reached the 6-month unlocking period. However, based on the 90-day redemption of 62.5% of $XAI tokens, node investors should have recovered their capital long ago.
The tokens of Aethir and Sophon have not been officially issued yet, so this model is still in its early stages, and is essentially the same as private equity. It is just that through the node sales model, the investment threshold can be lowered, and it is also completed construction of project infrastructure.
The node sales stages of the aforementioned XAI, Aethir, and Sophon have all ended. The star project that is still selling nodes recently is CARV. Interested partners can search for relevant information on their own.
The encryption industry has been developing for so many years, and the token issuance model sold by this node this year does seem to be more suitable for encryption than other methods.
The method of launching directly on the public chain is the most primitive ICO, which cannot meet the needs of long-term business construction. Users can easily be cut off by the project party; sending it directly to the user's wallet for free is Airdrop. Airdrop has attracted the attention of users and project parties. Opposition; the threshold for private equity participation is high, which is in line with the characteristics of our encryption’s decentralized and widespread participation.
Only through this node sales model, users can obtain better financing conditions than private equity, and the project party can also complete infrastructure construction. Why not?
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reproduced with permission from: "PANews"
Original author: Crypto Market Observer
