The field of cryptocurrency and blockchain technology is experiencing the emergence of novel concepts with each passing day. Just a couple of year back, the concept of initial coin offering (ICO) came into the market. This scheme to issue tokens is along the same lines of initial public offering (IPO). The year 2017 was particularly proved to be a massive hit for the ICOs as cryptocurrency shot into the fame with Bitcoin reaching almost the level of $20,000. However, in the following year, i.e., 2018 crypto winter set in and ICO started losing its sheen. The government regulations and stringent control from the authority further took its toll on ICOs. After ICOs, we have witnessed the growth of initial exchange offering (IEO) especially in this ongoing calendar year where many exchanges have provided a facility for the launch of new crypto tokens in the market. And now, the crypto market is moving towards an even more novel concept of initial future offering (IFO). IFO can be safely considered to be one step ahead of the ICO and IEO as it builds its selling proposition on the idea of future offering.
CoinFLEX and DOT
IFO has just come into prominence thanks to the CoinFLEX, cryptocurrency exchange based in Seychelles. The concept behind the IFO is to provide exposure to the cryptocurrencies, which are still to be launched. The launch of these tokens will take place sometime in the future though promoters are trading them as illiquid Simple Agreement for Future Tokens (SAFTs). The first IFO from the CoinFLEX will be initiated with the help of Polkadot’s DOT token. Just so you know Polkadot is a blockchain which offers the interoperability platform. The chief executive officer (CEO) of CoinFLEX explained that this is for the very first time that the exchange in going forward with an IFO and trying to create a market for a token which is still to be launched in the market. The IFO will help to determine the price of the token before its launch and helps to rationalize its value even before the existence of the digital asset.
Polkadot and DOT
As stated above, the IFO will be conducted for the DOT tokens of Polkadot. The process had already begun on July 15 when the exchange started pre-registering buyers and offered the DOT at a discounted rate of $75 for token. However, in order to ensure that the popularity of FLEX tokens (a native cryptocurrency of CoinFLEX) remain intact, all the future participants in this IFO will have to purchase FLEX for the participation in the process.
Merits of IFO
There are many advantages associated with the IFOs. According to the head of the business development of CoinFLEX, Emmanuel Alamu, the IFO is an innovative method for the crypto market. It ensures that the right kind of price discovery can take place for a token and also act as a barometer to check the progress of blockchain. It also provides exchanges with the dual-margin proposition and ultimately bodes well for the business. It will be interesting to witness how much traction the concept of IFO will gather in the coming time. Given the novelty of the concept, it might be possible that other crypto exchanges and investors may have their doubts about the concept as well as the process although the IFO seems to have the ability to become next big revolution in the crypto field.