Gnosis trading has opened at both Kraken and Poloniex with the token tripling in value, now trading at around $90, up from its ICO sale price of $30 which gave the project an evaluation of some $300 million.
Many thought that was far too high, but the market, at least for now, seems to think it was way undervalued, sending the token instead to a market cap of almost $1 billion.
Coinmarketcap is counting only the issued tokens, some 1 million GNO, giving it a market cap of around $100 million. But, the token sale used a Dutch Auction method in combination with a cap of around $12.5 million. Most of it was reached in seconds, with all of it going far faster than even hot cakes can dream of.
That means Gnosis still holds some 9 million tokens, making it 10 million in total. They say they have locked up those 9 million for one year, with only around 1 million now available in the market, giving us some pedantic discussion on what exactly should we consider its market cap to be.
The GNO token holders probably don’t care, but is any of this fair? That’s because for anyone to say you have any chance of getting these tokens at the sale price would be like saying you can outrun Husain Bolt.
It’s just impossible for many. The first two transactions, for example, were for some $5 million dollars. Beat that. They can now play the market as they please if they wish, crash it if they like or pump it up and up.
These sales need to slow down considerably and take far more than just ten minutes to complete, but no one knows how. A somewhat intuitive and perhaps obvious method might be to just cap how much any one address/person can buy. Say, at $10,000. Sure, they could get around it (maybe make it IP based?). They could divide that $2 million into 200 $10,000 addresses or get many VPNs, but that must be slower than a one off $2 million, thus perhaps allowing others to get in as well.
That’s because there is clearly much demand here and the reason for that demand is probably because these things keep going up and up. Golem, for example, has gone up 4x on top of eth’s own appreciation of some 7x.
Those gains don’t come often, but is it all a bubble or is it a new gold rush? Is this the dotcom craze or the oil barrons’ race for asset gains?
These projects are creating new things that have never existed before. The ICO model itself is brand new. Some of them will fail, we should think, but there is clearly here a new generation which dares dream and is willing to part with their money for it.
It has a 90s feel, one of the few spaces in the world which does so. It’s booming with optimism. The party is at full swing and the champagne is flowing. So everyone is dancing while it lasts because the headache might hurt whether you took part or not.
On a slightly more serious note, ancient wisdom says diversify and reserve only the smallest amount of your savings for highly risky investments such as eth, and even less for even more risky investments, such as tokens.
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Last modified: May 21, 2020 9:54 AM UTC