Bgogo is an exchange which isn’t listed in the top 100 exchanges by adjusted volume. They reported an impressive $500+ million in the past 24 hours. Adjusted volume on CoinMarketCap.com discounts exchanges with no fees or that utilize transaction mining. On the regular “reported volume” section, which has some otherwise-no-name exchanges in the upper echelons, Bgogo is #28.
ICO-Based Exchange Goes Full IEO
Bgogo funded via an ICO, which resulted in the creation of some 10 billion tokens currently worth about .003 USD each. The exchange does “transaction mining” — people get a rebate based on their token holdings and the amount of trades conducted on the platform. Incidentally, this is why they’re not listed on CoinMarketCap’s “adjusted volume” rankings.
Now Bgogo is using its “Apollo” project to launch other tokens and exchange offerings – whether they like it or not.
Algorand Has Not Endorsed This Offering
Algorand is a blockchain platform out of Boston that has yet to announce a token sale of any kind. They will be a decentralized, blockchain-based trading platform, but they’re still very early in the development phases. Nevertheless, Bgogo has promised to launch an “initial exchange offering” for Algorand on April 12th. They write:
Bgogo Apollo will offer allocations of Algorand token, ALGO, with limited price to project’s community, later multiple entities from the community will join as initial token traders, including but not limited to project early stage users and private investors, etc.
They’re setting the opening price on ALGO tokens at 5 cents. The problem is that no such tokens yet exist, and Algorand has been clear about this;
This means that Bgogo is issuing IOUs for Algo tokens. Anyone who participates in trading of the token won’t actually be able to withdraw it. They have a supposed stated value on the exchange, but there are obvious problems with this.
How IOUs are Different Than Trading Bitcoin Permissionlessly
Bgogo uses some complicated methods to create the market. Users must hold exchange-native tokens to participate in the trading, but they repeatedly inform the reader there is no need to “snap up.”
The whole thing seems counterintuitive to the ethics of decentralization and “be your own bank.” Not only must you trust Bgogo, but you must trust that Algorand will deliver a token worth whatever you decide to “invest” in this IOU trading. Seems bonkers, right?
To justify the situation, Bgogo says it’s no different than exchanges trading Bitcoin without Satoshi Nakamoto’s permission:
CCN.com has reached out to Algorand for further comment, and we hope they take the opportunity elucidate how they feel about the actions of Bgogo. From here, we can state without exception that listing Algorand before the token sale has even been announced is nothing like exchanges trading Bitcoin without the approval of Satoshi Nakamoto. The major difference, of course, is that exchanges who trade BTC are expected to actually have possession of the coins being traded.
Last modified: March 4, 2021 2:44 PM