Since there was a discussion on funding, I wanted to share this because we recognize capital is a big pain point for Koinos.
28 Jul 2024, 19:36
Since there was a discussion on funding, I wanted to share this because we recognize capital is a big pain point for Koinos. What it comes down to is this... VCs want tokens. That is their exist strategy. While they may own shares of a business, they aren't interested if there are no tokens. Furthermore they are looking for massive upside. 100x, 1000x, or even more! Because Koinos fair launched, KG does not have nearly as many tokens as other chains do. VCs are often looking for 5-20% of a token supply.
A VC is going to want most, if not all, KG's KOIN at below market rate. Probably 25-50% below market rate. We have around 10M unspoken for KOIN. We need that for market making, grants, exchange listings, etc. So we can't sell all of it. In fact, half of it would hurt a lot, but we could part with it if we needed to. So we are now only giving 5% of the token supply to a VC at say 25% below market, which is a total value of 1.2 million dollars. At our best, that is the most we can realistically raise because of the fair launch. That really isn't enough to move the needle significantly, especially when we are up against projects that are raising 10s or 100s of millions.
So what options do we have? We can have a large token event, give the tokens to KG and then sell those to VCs. But that is exactly what the federation proposed, so that's out.
We could launch a new chain and airdrop of the tonens on KOIN holders. The effect is essentially the same as a token event, but Koinos lives on free from this mess. But then we would have investors in the new chain, not Koinos, so those funds would need to go the developer grants on the new chain, not Koinos. Sure, some value would eventually work its way back to Koinos, but it is not guaranteed.
We don't think either of these ideas are ideal, which is why we have chosen our current strategy of laddering up on exchanges, market KOIN, and increase ease of access and visibility to draw in new users and capital. Setting vision is 100% a part of that. We are ironing out the details of that currently and will share more as soon as we can. We are working with many projects already on Koinos to align incentives and preparing to onboard new users en masse.