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Crypto tokens and ICOs

Crypto tokens and ICOs

Slide deck for #nordicnext with an overview of cryptographic tokens and crowdsales.

All data is as of June 5th, 2017.

Stefano Bernardi

June 07, 2017
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  1. The first real revolution in VC
    Stefano Bernardi
    Crypto tokens and ICOs

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  2. ABOUT
    VC Startup VC Crypto?
    ?

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  3. What’s a token and what’s an ICO?
    Crypto token
    Digital security
    Digital token
    ICO
    Crowdsale
    Token sale
    Coin
    ITO
    “An ICO is a way to raise money
    for a new cryptocurrency project
    by distributing a percentage of
    the initial coin supply among the
    early supporters and backers”
    Smith and Crown
    “A crypto token can be any kind
    of digital asset or any digital
    representation of a physical
    asset, which is recorded on a
    cryptographic blockchain”
    yours truly
    Crypto asset
    Token distribution event

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  4. Intrinsic tokens
    Asset-backed tokens
    Application tokens
    Types of crypto tokens

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  5. Why does it matter?
    $100B+ TOTAL MARKET CAP

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  6. Why does it matter?
    0
    500
    1000
    1500
    2000
    ICOs Blockchain-related early stage VC Early stage VC
    $2,000M
    $140M
    $350M
    $2,000M
    $140M
    ICOs vs VC

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  7. Why does it matter?
    ICOs vs VC

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  8. Why does it matter?
    0
    1,000
    2,000
    3,000
    4,000
    Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17
    Ethereum-related repos on Github

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  9. Why does it matter?
    Protocols &
    Infrastructure
    Middleware &
    DevTech
    Capital & Liquidity Applications
    Distributed
    computing
    Distributed
    Storage
    External
    Data
    Identity &
    Privacy
    Cryptocurrencies
    Crypto
    Funds
    Asset
    MGMT
    Public
    Blockchains
    Private
    Blockchains
    Market Cap over time
    GovTech
    Legal Tech
    Analytics & Resources
    Exchanges
    & Wallets
    Scalability &
    Interoperability
    By Alexander Ruppert, VC @Earlybird.
    Supplychain & Logistics
    Energy
    DevTech
    IoT & mesh
    networks
    Marketplaces
    Infrastructure
    Attention
    thanks to @alexruppertvc

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  10. Why does it matter?
    CVC
    +
    Major VC-backed companies launching tokens
    and many others coming soon

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  11. Why does it matter?
    $36M
    raised
    24s
    total time (2 blocks)
    <150
    total investors
    $8M
    largest transaction
    $4000
    largest transaction fee
    10x
    price on exchanges

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  12. Value shift
    Fat protocols

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  13. Why tokens? A new tool
    GOVERNANCE
    ECONOMIC
    INCENTIVES
    MONETARY SUPPLY AND
    FISCAL POLICY
    INFLUENCE USAGE

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  14. Value shift
    Tokens: The end of monopolies?

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  15. What’s the difference?
    Ownership model
    VENTURE CAPITAL CRYPTO TOKENS
    Preferred equity shares Cryptographic protocol / usage
    tokens
    Investors Accredited angel investors,
    institutional ventures funds
    Retail
    Capital entry Rolling seed rounds, structured
    venture rounds
    ICOs
    Capital exit Acquisition, IPO, (dividends) Liquid exchanges
    Structure C-Corp, Ltd Anything, usually LLC +
    non-profit foundation
    Lock-up 5-10 years none
    Investor protections Board seats, covenants,
    shareholder approvals, etc.
    none
    inspired by William Mougayar
    Information Private: Deck, business plan,
    KPIs, team, metrics.
    Public: Whitepaper, product,
    team, open source code.

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  16. Difference #1: LIQUIDITY
    A new world

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  17. Lose control of price
    At the mercy of the market from
    day 1, including:
    - pump and dump schemes
    - malicious owners
    - market mood swings
    LIQUIDITY

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  18. Difference #2: PUBLIC and DEMOCRATIZED
    A new world

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  19. PUBLIC and DEMOCRATIZED
    100X bigger investment base
    More distributed ownership
    Engaged and incentivized user
    base
    Substantial upgrade for
    companies outside of VC-heavy
    hubs

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  20. 100X bigger investment base
    More distributed ownership
    Engaged and incentivized user
    base
    Substantial upgrade for
    companies outside of VC-heavy
    hubs
    People will lose their shirt
    No idea on owners identity and
    amounts
    No “very invested”/aligned
    owners
    Value often irrational
    PUBLIC and DEMOCRATIZED

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  21. Difference #3: Basically NO REGULATION
    A new world

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  22. Great experimentation in
    governance structures
    Level-playing field all over the
    world
    NO REGULATION For now

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  23. Great experimentation in
    governance structures
    Level-playing field all over the
    world
    Lots of scams
    Very hard to litigate


    Companies creating tokens just
    for fundraising purposes, with no
    real utility
    NO REGULATION For now

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  24. Difference #4: IT’s NOT EQUITY
    A new world

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  25. PREDICTIONS / TRENDS
    Normalization: Pre-ICO rounds (and funds)
    Milestone-based investments
    Tokenized equity
    Completely new value-distribution models
    A new breed of amateur investors
    Regulation is coming

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  26. A final, crazy prediction:
    In 20-30 years, token exchanges
    will be bigger than the stock market.

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