The industry of token-based projects in 2018 Q2 saw development along a variety of axes, as projects continued to raise funds, build their applications, and work within regulatory regimes. The space is more robust than an initial view of the aggregate funding or overall market trends would suggest, a conclusion supported by the prominent trends in the diversification of smart contract platform development, token sales in a variety of market sectors, and initial integrations with existing financial structures through Regulation D/SAFT registered offerings. This article takes a deeper look at 2018 Q2’s most significant developments, and considers why these themes point towards a maturing market in certain respects.
Introducing “Understanding Digital Tokens: from the Chamber of Digital Commerce’s Token Alliance and Smith + Crown
Developed to be a key resource for the emerging industry surrounding the generation and distribution of tokens using blockchain technology, the Token Alliance develops community-driven guidelines for the responsible proliferation of tokens.
Decred is a cryptocurrency designed for P2P payments in a similar vein as Bitcoin, albeit with a focus on governance through a hybrid PoW/PoS consensus architecture. While not a fork of Bitcoin, Decred utilizes several of its design elements and explicitly aims to improve upon Bitcoin’s perceived shortcomings. Decred emphasizes governance input for all stakeholders through an on-chain voting and public proposal system; it was the first blockchain to implement an on-chain, token holder-approved hard fork.
Tether, the most widely known stablecoin in the cryptocurrency markets, remains the subject of considerable concern and skepticism and while these questions may well remain unresolved, Tether’s lasting legacy is likely to be associated with its role as the initial stablecoin project to develop a large market presence, in effect serving as an important proof of concept in a space that has attracted considerable attention.
Gnosis is an open-source, Ethereum-based platform that enables users to aggregate information via prediction markets, a mechanism that incentivizes information sharing and rewards participants for sharing predictions on issues ranging from sports betting, political polling, financial forecasting, to risk assessment.
The topic of stablecoins has occasioned a flurry of discussion and activity in late 2017 and early 2018, not unsurprising given the potential of stablecoins to allow the expansion of the crypto community in a number of important ways. This articles considers two developing stablecoin projects that fall within the seigniorage shares category of stablecoins, exploring the particulars of their constructions, their relative positioning within the market, and significant challenges each is likely to confront.
Litecoin is a cryptocurrency emphasizing rapid transactions and low fees, released in 2011 by Charlie Lee as an early fork of Bitcoin. Lee modified three key parameters of the original Bitcoin design: reducing the target block confirmation time to 2.5 minutes, increasing the total supply to 84 million LTC, and implementing the memory-hard PoW algorithm Scrypt. This consensus algorithm is ASIC-resistant, reducing the risk of centralized mining infrastructure. In other respects, the Litecoin network is similar to Bitcoin. Litecoin is designed to be used as a rapidly processed medium of exchange for everyday transactions, and was one of the first major cryptocurrencies to implement Segregated Witness in mid-2017.