The Death of the ICO and the Rise of the SAFT

If you’ve been following the cryptocurrency landscape, you’ll know that in early 2018, the industry was dominated by ICOs (initial coin offerings). Smaller companies would often showcase their plans for the future and then produce ICOs as a means of allowing just about anybody to invest. In late 2017 and early 2018, ICOs were one of the most exciting parts of investing as they allowed ordinary people to invest in new and upcoming projects before their tokens even reached the exchanges. 

While ICOs still still exist now, in 2019, it is fair to say that the hype surrounding them has dissipated. This is not simply because the markets took a downward turn.

People are more cautious

During the 2017-2018 bull market, there was a worldwide fear that if you did not invent in smaller cryptocurrencies, then you were not going to be a successful trader. This type of sentiment could be seen all over sites with large crypto followings such as YouTube, Reddit, and Steemit. While everybody accepted that Bitcoin and (to a lesser extent) Ethereum were solid portfolio choices, it was generally seen as ludicrous not to also invest in at least one ICO. This was because many ICOs released during the bull market skyrocketed in value.

However, late 2018 humbled almost all crypto investors, and while it was a smart idea to invest in ICOs during the bull market, the following bear market was deeply punishing to many of them. Unfortunately, because of this, ICOs soon became synonymous with risky and unfounded investments. This instilled a level of cautiousness which is prevalent in most investors nowadays. Additionally, it didn’t help that many malicious companies took advantage of the ICO model and scammed unsuspecting investors. 

US regulations

One of the biggest pitfalls with ICOs was that US regulations were largely unapproving of them. The SEC considered most ICOs to be unlisted securities, meaning that companies needed to register them with them if they wanted to continue. Often times, intervention from the SEC led to companies having to change fundamental elements of their projects, and therefore missing milestones on their roadmaps.

The SEC’s regulations and the growing mistrust towards the ICO model forced companies to look for alternative investment methods. Most of which were unsuitable, but there is one method which appears to be perfect for the crypto market.

SAFT Investments

One alternative to the ICO is the SAFT (Simple Agreement for Future Tokens) which is being used by Atronocom. With SAFTs, rather than issuing a token to early buyers instantly at the time of investment, companies instead only issue the tokens at a time when their project is ready for use. This makes Atronocom an impressive investment option as it allows them to avoid the common pitfalls of ICOs. For instance, SAFTs do not have the same stigma surrounding them as ICOs do, making them a more favorable choice among more experienced investors. Atronocom’s SAFT is also compliant with US regulations, which is a huge positive as it ensures that the SEC will not unjustly interfere with them and derail their roadmap. 

While ICOs will likely always be a part of the cryptocurrency landscape, it is important that other more suitable alternatives are explored. Other funding methods such as SAFTs appear to be a massive improvement on ICOs for several reasons, making them greatly desirable. 

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Aubrey Hansen
Aubrey Hansen

I am an enthusiastic freelance journalist interested in crypto world. I studied journalism and I am passionate about writing. More time passes, more I get confident about the idea of blockchain bringing endless opportunities to our future societies.

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