4 Interesting Notes Regarding Milestone Token Offerings
Token offerings come in many different shapes, forms, and sizes.
That is only par for the course, as the cryptocurrency industry continues to grow and evolve at all times. Milestone Token offerings are seemingly the new hot trend, although they are not as common as one might think. Another interesting business model, albeit one with a bit more merit compared to other types of token offerings.
The Milestone Token Offering Idea
Whereas most token offerings are based on selling a large number of tokens in advance prior to launching a project, the MTO takes a different approach. It is somewhat refreshing to see teams explore options which do not require investors to invest in hopium and hype, but rather look at a project and see what has been realized to date. Whether or not this will attract as much attention as Initial, Security, or Exchange Token offerings, is a very different matter altogether.
As the name somewhat suggests, the Milestone Token offering is very different. Teams will only offer tokens for sale once their development reaches a new milestone on the roadmap. As such, the initial development is very little upfront funding, and it pushes the developers to effectively keep working on the project moving forward. It seems to be a more goal-driven token offering rather than a money-driven effort, but it remains to be seen if that will yield more successful blockchain projects in the years to come.
What about Regulation?
By the look of things, milestone token offerings will need to adhere to securities laws in the United States and beyond. It will fall into a few possible categories when it comes to securities, but it is advised any project exploring this option to get in touch with the proper authorities. After all, it is also possible to issue utility tokens through this model, but it seems more likely security-esque offerings will become the norm where this business model are concerned.
One also has to wonder who will be able to participate as an investor. Given how this business model seems to lean toward being regulatory compliant, it is not impossible to expect going through a thorough user verification process. After all, the goal of an MTO is to build a bigger community and attract additional funding based on the past and future developments. As such, accredited investors seem to be a very plausible target, especially for projects which are very serious about being regulatory compliant.
Multi-phase Funding is Possible
It would appear there are some interesting options for companies exploring a milestone token offering. One can organize multiple of these token sales to attract a few dozen new investors along the way. As such, they can split every token sale into different batches if they see fit to ensure as many people can get in on the action as possible. One project currently exploring this option is Storecoin, as they will offer multiple phased pricing rounds. A peculiar option to explore, albeit one that may have some merit.
Is it a Viable Business Model?
That is perhaps the most difficult question waiting to be answered. While milestone token offerings are not exactly the big hype as of yet, it would appear there may be a growing interest in this business model moving forward. Especially for legitimate companies, this is a good alternative to ICOs, STOs, and ETOs. Gaining traction with this token sale model may be very difficult at first, as these new models tend to get scrutinized quite a bit. That is to be expected, as token sales do not enjoy the best reputation in the cryptocurrency industry.
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