Over the past weeks, we have been intensely scrutinizing the conditions, requirements, and approaches of exchanges to conducting IEOs, as well as the experience of other projects involved in similar undertakings.
We have observed substantial disinformation, fake trading volumes, and intense price manipulation. As a result, token buyers and the entire community suffer substantial financial losses. Tokens sold during most IEOs often lack a structural lower demand bound after being listed, which leads to substantial price drops or, given low liquidity, opens the possibility for manipulation.
We are grateful to the representatives of all the exchanges with whom we had negotiations regarding IEOs and for the relevant information on the market condition.
Considering the above market conditions, PrepayWay announces new terms and conditions for its InBit token sale.
1. The new hard cap is 5 mln EUR. PrepayWay has reduced its token sale hard cap 10 times – from 50 mln to 5 mln EUR. After the first tier of token sale, we see this as the current market-determined goal for PrepayWay’s token sale.
2. The total supply of tokens to be distributed is reduced 10 times. Please see the table below.
*Including private and presale discounts. Unsold tokens intended for sale will be burned. The other numbers are fixed (not decreased proportionally).
NB! The number of tokens already allocated in the airdrop and past bounty campaign will not be reduced at all or will be reduced twofold at the most. The final decision will be made after the end of the main token sale. The final results of the token sale as well as the interests of tokens buyers will be taken into account .
3. The second round of the sale will not be held as IEO. PrepayWay has approved the schedule for the token sale. Please see the table below.
* The amount for the main sale can be less, depending on the results of private sale.
One of our primary goals is to preserve the interests of members of our community, buyers of tokens and investors, and therefore we see:
1. It is beneficial to launch the token when a real demand for the tokens materializes; speculative selling should not be the main driver. The demand for issued tokens should be based on actual use. Otherwise tokens may quickly depreciate in value.
2. It is necessary to strive for listing on a reputable exchange with real users – this is the only way to create a sustainable and healthy market around the token.
We invite everyone to join us today and participate in the upcoming presale tiers to receive InBit tokens with an early bird discount. You may also choose to wait for the Main Sale Event in December 2019. By that time we expect to already have two working products, Elleeo and SmartArb, which will provide the necessary demand for the InBit token. Also, we are considering the possibility to sign an agreement with an exchange by that time, so our community will have a clear path towards exchange listing.
Q: What are the main reasons not to hold an IEO?
After analyzing the experience of the current IEO general practice, we reached to several conclusions:
a. Most of the tokens listed following an IEO have been observed to have varying demand and little liquidity. As a result, substantial price losses and volatility are the rule rather than the exception.
b. Often, the price of a token is pumped artificially right after the IEO. This can attract new buyers who will end up losing their money, because project or exchange trading against them. The above-mentioned excess volatility, most of the time the result of the lack of organic demand and real trading interest, eventually leads to loss of trust in the underlying project’s idea – regardless of its merit. Furthermore, the chances of listing on other reputable exchanges get compromised.
Q: How do you address the above problems met by other projects?
To reduce these risks, we are currently focused on building the technology solutions needed for our selected use cases. In particular, we expect to launch our crowdlending platform Elleeo in a few months. The opportunity to acquire tranches of issued loans, backed by real estate, using InBits is an excellent demand driver for InBits at the first stage of its adoption. Also, we have reduced the total supply of the tokens 10 times while maintaining its usage targets. We are carefully scrutinizing our partners for the listings and refrain from engaging any kind of outlets supporting price manipulation.
Q: I have participated in Token Presale Tier 1 only because I was sure that you would be doing IEO. Now, you are switching from an IEO to a classic token sale. Does this come at the expense of the community?
The Main Sale will be held as planned – at the end of 2019. Airdrop and bounty hunters will receive tokens after Main Sale – as it was announced at the beginning, there are no changes in the timeline. The aspect that has changed is the approach of selling and listing on an exchange. You can read the reasons for our strategy change in the answer above.
We believe that not adapting to the observed rapidly changing market conditions leads to inefficient outcomes for the community and team as well. Note also that our answer to the observed conditions leads to decrease of total issuance.