There is never a day without intriguing cryptocurrency developments. Those who can look past the drama and hype may have taken note of a surprising bit of news. It appears there will be IPOs issued on top of the Ethereum blockchain. These tokens will serve both security and utility functions. An interesting development to keep an eye on.
More Ethereum Tokens
Over the past few years, there has been a vast influx of tokens issued on the Ethereum blockchain. Most of these tokens were part of an initial coin offering, or IPO. There have also been a few “mineable tokens”, as well as general utility tokens sued for a wide variety of purposes. Most of these projects are either dead in the water, or will be fairly soon.
Ryan Sean Adams, the founder of Mythos Capital, hinted at an interesting shift. He claims there will be IPOs issued as ERC20 tokens on the Ethereum blockchain. All of these projects will be registered with the SEC and serve as both utility and security tokens. This is a very surprising turn of events. Most companies haven’t paid much attention to non-permissioned blockchains as of late. Which companies will pursue this option, remains to be seen.
Changing the IPO Game
One has to wonder if there is any truth to such claims. More specifically, would it be in the best interest of companies to issue IPO tokens on Ethereum? The answer to that question is anything but straightforward. It is not an option to dismiss easily, but it might not suit a need either. In terms of attracting investors, ERC20 tokens might not necessarily be the best choice.
On the other hand, it is a sign of embracing future technology. Some investors and companies will certainly see merit in doing so. A blockchain-based token is very different from traditional stocks, as it is subject to a lot more volatility across trading platforms. That said, a token can be pegged to an existing IPO stock which is available for public trading. Plenty of options to look into, for those willing to take a risk.
The Future of Ethereum
Assuming there is some merit to this bold claim, the future of Ethereum may look very different. From day one, this has been a project which doesn’t aim to rival Bitcoin. Most cryptocurrency enthusiasts still like to compare the two, despite their obvious differences. Under the hood, Ethereum is more suited for security and utility token issuance than Bitcoin will ever be.
That said, attracting IPOs is not necessarily a good thing. It will bring a lot more scrutiny to this project. Moreover, it will serve as an example for the rest of the financial sector. If things fall apart, there is a genuine chance finance and cryptocurrency will never be on the same level. That is a major pitfall everyone needs to avoid at all costs.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.