Overstock And The ICO Market: “tZero Will Be Fun To Watch”br>
Overstock and its blockchain subsidiary, tZero, have been in the news thanks to a $375 million investment from Hong Kong’s GSR Capital.
tZero is an intriguing story. Overstock was one of the first big retailers to recognize the power of blockchain and cryptocurrency, and launched an ICO for tZero last December. Combined with the investment funds, tZero is now valued higher than its parent.
Aleksander Dyo, president/co-founder of Token IQ, talked with Block Tribune about Overstock and the general ICO market.
BLOCK TRIBUNE: What is the significance of Overstock? The fact that it’s a major company doing the ICO route?
ALEKSANDER DYO: Overstock has evidently done a great job of spotting the opportunity and effectively capitalizing on it; very much what they have done by selling surplus and returned merchandise on an online e-commerce marketplace back in late 90’s. The fact that the company successfully executed on a financing stack through an ICO makes them stand out once again. This is an outstanding example that the blockchain has arrived on the scene as a legitimate platform for enterprises to harness. Because of this, it would only make sense that similar first mover philosophies carry over to the new economic paradigm which is in front of us, and it’s clear that Patrick Byrne embraced, once again, what the market needs most. tZERO will be fun to watch in the coming months as it will provide companies an example of best practice principles to aspire to, and arm consumers with confidence to overcome their unsureness as they contemplate their place in the new economic world.
BLOCK TRIBUNE: Most companies offering turnkey ICO solutions are looking at minimum startup costs of anywhere from $50k on up. What are yours?
ALEKSANDER DYO: Ours costs are actually pretty commensurate with others you are finding out there right now. That being said, the suite of boxes that our technology checks, in comparison, is more comprehensive. One of the major differentiators we lead the pack with, for instance, is that our most critical value drivers are abilities our platform has to perform on token. Critical features like KYC/AML Validation, token lockup and recoverability, or asset ownership creation are all functions built in to eliminate risk and reduce friction. It’s important to eliminate as many 3rd party providers as possible if a truly objective and secure environment is to be created, and most of other companies similar to ours have not figured out how to remove those providers from the equation. Referring this back to costs, these dimensions that we don’t need to rely on 3rd parties for, provides us an uncontested advantage to scale costs down more effectively, if needs to, as we grow and improve upon our technology.
BLOCK TRIBUNE: Presuming someone meets that financial threshold, what is the time-frame to launching an ICO with Token IQ?
ALEKSANDER DYO: Our tokenization process completes in 2-3 weeks, assuming that the issuer has checked off all other due diligence boxes (ex. Legal framework, tokenomics, business plan, pro-forma, etc.). This turnaround will only get better over time, partially because of the intrinsic power of blockchain and partially because of the logic that we’ve embedded to our core token functionality. In addition, as we learn more about the industries we serve, the rules that define them and regulators’ view of fundraising on blockchain would make the process further be streamlined.
BLOCK TRIBUNE: Are established public companies a better vehicle for an ICO than a start-up? Why or why not?
ALEKSANDER DYO: It depends on what values we are trying to measure – philosophical or economical. Logically, established public companies have most of the boxes checked off and may utilize an ICO to finance their sizable and complex projects on a non-diluted basis. They not only have an existing audience, raving fans and pool of sophisticated investors, that would be considered as hot potential buyers, but also media outlets that can fuel the progress further. It is probably a no brainer success. So, if it is almost guaranteed, would that make an established public company a better candidate for an ICO? Probably, yes, if we look at an economical value.
Now, if you choose to place philosophical values higher, established companies do not afford the same level of abstract potential as you’re likely to find in a start-up climate. By nature, those involved in these projects have bold ideas that hope to provide a whole new perspective on various problems. Often, it’s that perspective which allows uncontested value to emerge, because when transformative solutions are developed, they take some time for others to replicate or impede upon. As long as grand concepts are met with effective deployment, the return for creating unobstructed value is immense. This is a powerful effect, and you see it now in the blockchain space, where the fervor of hundreds of projects spinning up all at once only intensifies this potential energy. This is more of a ‘right brained’ way to look at judging ICO vehicles (vs the ‘left brained’ outlook of established companies) but they both have their place, as is clearly evident.