Even though the ICO industry gets a lot of flack, there are some positive developments to take note of regardless. In the case of Relex, the team has taken a very unusual course of action. Removing the majority of tokens allocated to team members for the benefit of investors is a pretty interesting decision.
The Relex Decision Creates a Precedent
In a lot of cases, initial coin offerings are a big risk for investors. So many ICOs only issue around half of their tokens to investors, whereas the remainder are held by the team itself. Although this usually doesn’t affect investors all that much, it is still a worrisome aspect which most people tend to overlook.
In the case of Relex, the team has decided to do things a bit differently. While this is not an official “legitimization” of this initial coin offering whatsoever, the team has decided to cut the total token supply in half. Rather than reduce the number of tokens issued to investors, Relex decided to remove the team’s tokens from its upcoming airdrop. As such, the supply will be reduced, and only the team’s holdings will be impacted.
On paper, this seems to be a rather interesting decision. A reduced supply will inflate the current value of the new tokens. Additionally, a lower supply will create scarcity which was not present beforehand. Since all current token holders were going to receive the new token at a 1:1 ratio, the supply was originally supposed to double to 4 billion.
That plan has now been scrapped, as the Relex team wallet will not have its holdings duplicated because of this airdrop. This is positive news for existing holders, although one could also argue the team has little confidence in their new health token. After all, they will not lose any value by not receiving the new tokens, but existing holders may not see their holdings appreciate because of the airdrop.
It will be rather interesting to see what the future holds for Relex and its new token. It would be good to see more ICO teams that issue an airdrop or create a new token to reduce the supply held by team members. Since these projects usually raise millions of dollars already, there’s no reason for them to control a large portion of the coin supply.
All of this suggests that initial coin offerings and airdrops may undergo some big changes moving forward. Although the decision by Relex may prove to be an exception rather than the new rule, it is still a positive change in the long run. Whether or not it will bring more legitimacy to the project and its upcoming airdrop is a different matter altogether.