New Alchemy is laser focused on helping companies with their ICO plans this year. We are working on everything from "soup to nuts" tech and regulatory work to just audit.
I wanted to call out a few things that I think are noteworthy, and worth thinking about in general with this new crop of ICOs.
For those not in the know, a "stable coin" is a Blockchain token that is designed to not fluctuate in value.
Probably the most ambitious angle on a stable coin is MakerDAO's dai which tries to track the value of a basket of goods by offloading volatility into a separate coin (called MKR), but there are a number of different angles on this published or discussed, and more coming.
Stable coins are the sort of thing that non-Blockchain types want immediately when they start looking at Blockchains. They're horrified by the volatility in Bitcoin or Ethereum, and I suppose rightly so.
On the other hand, I find that especially Bitcoiners don't typically understand these needs -- they got into Bitcoin in part because of the volatility, aiming at making money on the price increases. It doesn't compute why someone would want to opt out of these kind of dynamics.
In the rest of the world, volatility is bad, it makes investment decisions harder. So I welcome any attempts to get stable-value tokens onto the Blockchain. I think we'll unlock significantly more investment and innovation with stable value tokens out there.
ChronoBank's Labor-Hour concept is interesting. I can't opine as to how well it will peg to actual labor hours in the different countries yet, but I think it's an approach worth trying. We will need more of these schemes put out and tested to get a feel for the ins and outs. So bring it on, team!
Team Size and Approach
ChronoBank put a lot of effort into team building and recruitment, and has gone at this in a consortium model; pulling together strategic, technical and business resources to launch the project.
Until the ICO technology stack and consumer market is well explored, I think this is a recipe for success. Perfect business models aren't known. Smart contract coding is very difficult. Very, very few people understand the technology stack and the strategy stack at the same time.
ICOs are often the first way an uninformed public gets to engage with a project, and I think in general the ICO market would do well to look carefully at what ChronoBank felt was necessary to do when launching.
Small teams can be great. They are more capital efficient for one, and capital dynamics from ICOs are an area of rapid "practical" research right now, so there's a lot to be said for maintaining efficiency.
At the same time, this is a large effort, spanning multiple countries. The Blockchain solves many problems that were previously intractable, but it is not magical pixie dust that solves all operational needs. And business experts almost definitionally don't know the ins and outs of the smart contract space.
Overall I think we'll see a mix of large and small team offerings in the ICO space this year. But small or large, I believe we'll see a lot of teams tapping external technical talent to make these ICOs happen in a safe and expedited manner.
Holistic Approach, Some Thoughts
Finally, I think the holistic approach is an interesting choice. In particular, integrating debit cards is a good choice. I really like Blockchain projects that are opening new markets, and integrating with existing banking systems is a part of that puzzle.
Any business or startup has to decide how they are going to tackle their market, so I could imagine complaints about having such a broad view.
Anecdotally, ICOs with "big plans" seem to play better than very focused ones in the public market. I'm not a huge believer in the wisdom of crowds, but I do listen to broad-scale market opinion like this, and I think it's worth taking note for those who are prepping their ICOs.
I will probably update my thoughts as some of this first tranche of ICO companies get operating. Fundamental business analysis shouldn't take a back seat to market sentiment.
But, for the entrepreneurs or businesses who want to engage in the market, I think the message is pretty clear right now -- Blockchain investors are thinking of this as a greenfield space with a TON of headroom to carve out new models, so they are feeling expansive.
I feel the same way. It's going to be a great year for the Blockchain, and particularly for Blockchains to finally start breaking out of the initial silo carved out by Bitcoin.
About New Alchemy
New Alchemy provides strategy, technical and audit services supporting the ICO and smart contract market. We also invest directly in interesting projects. Get in touch at [email protected]!