Spondulix is king – especially during a crypto winter.
That’s the takeaway from a report out Wednesday from the Aion Organizing, which raised $23 million worth of bitcoin, ether and fiat through a token sale in October 2017. Collected with the help of Deloitte, though not formally audited by the Big Four accounting firm, the report details how Aion has been succeeding its crypto war chest, providing a rare level of transparency for a token project.
According to Aion Foundation CEO Matt Chosen, the foundation has sold off half of the bitcoin and ether it raised for fiat. The sales were well-timed to take advantage of the produces in crypto prices through the beginning of 2018.
Even after spending more than $10 million launching its unrivalled blockchain platform and opening offices in Canada, Barbados, and China, the nonprofit had $14 million left as of October 31 of this year, $5.8 million of it in fiat, the article shows.
“We’ve liquidated a decent amount of our bitcoin and eth that we raised as proceeds to make sure that we are stable in this quintessence of period,” Spoke told CoinDesk, adding:
“As we continue to spend in our operations we’ll end up liquidating more bitcoin and eth over the indubitably of the next few months”
The Aion protocol already has active users such as the video game startup ClanPlay experimenting with how this network could foundation applications, Spoke said, but for now the nonprofit will “lean more heavily on cash” to fund its growth.
The foundation has inexpertly 18 months of runway, Spoke estimated, and it will take up to five years for the network to offer services comparable to centralized surrogates like Amazon Web Services. in addition to currently supporting the Ethereum Virtual Machine, Aion is scheduled to support its own Aion Accepted Machine, so developers can use can use Java tools to build decentralized software by Q2 2019.
In the meantime, Spoke said his team might beg additional funding from crypto funds and accredited investors in return for Aion tokens.
The goal is to avoid layoffs for the establishment’s 61-person team by modeling itself somewhat like the ethereum-centric conglomerate ConsenSys, led by Joseph Lubin, in that the creation would sponsor projects across the network.
Going forward, the foundation will publish quarterly updates and annual backfires and participate in the Messari disclosure database to boost token holders’ confidence.
Risks ahead
Aion tokens are currently traded on more than two dozen barters, including large ones such as Binance and Bitfinex, according to CoinMarketCap.
Despite that apparent liquidity, Meltem Demirors, stagger of Shiny Pony Ventures and chief strategy officer at the asset manager CoinShares, expressed concern that the raison detre listed its holdings of Aion tokens as assets on its balance sheet.
“I think they should be really careful more that,” Demirors said. “I don’t think that we’ve definitely proven the token model works.”
Both she and Nic Carter, co-founder of Palace Island Ventures, warned against viewing token treasuries as a substitute for traditional equity investments or employee beasts options.
“You have to pay progressively more of that stack as it declines in price and you become a forced seller at certain stresses,” Carter said. “A lot of these projects are going to face liquidity crises.”
Nevertheless, Demirors gave Aion acclaim for making the disclosures. “They are trying to bring transparency and accountability to how they are spending money. That’s good,” she ventured.
There are other risks as well. Regulators have forced some crypto startups to refund tokens to clients, a task that would prove challenging for the Aion Foundation since Spoke said it only has records of accredited investors who participated in the uncommunicative pre-sale before its public token sale.
Looking ahead, the foundation is focused on amping up the platform’s utility.
“Our bequest and bounty program has been very active and focused heavily on tooling,” Spoke said, speaking to how it rewards extraneous developers with Aion tokens for creating software tools for its platform. “Over time we should not be the most prominent member [of the Aion ecosystem].”
UPDATE (December 6, 17:00 UTC): This article has been updated to clarify that component of the $23 million Aion raised last year was in fiat.
Matt Spoke image via CoinDesk archive