1 million coins (1%) will be sold for 50k in Bitcoin.
So from an investors point of view, we'd need to believe in a $5m valuation at launch. That's almost top ten territory, market cap wise.
What's the plan for distributing the remaining 99%?
Maidsafe is raising 6 million dollars at 120 million dollar valuation.
Ethereum is raising 30 million at over a 100 million dollar valuation.
Ripple IPOed at over a 100 million dollar valuation.
Skycoin is IPOing at 5 million dollars and only raising 50k. The IPO is oversubscribed. We are doing the IPO at such a low price so that more people can get coins early.
Reasons for the Structure of the IPO:The reason a 50k IPO was chosen was because we have experience with previous coins. We know of people who buy up allotments of coin in an IPO, wait until the price goes up 30x and
then DUMP the coin, completely destroying the equity of the other coin holders. A coin going from a 1 million to 50 million dollar market cap, with 30% of the IPO participants dumping, needs between 5 and 15 million dollars capital inflow just to maintain the price. Skycoin is not a pump and dump and a smaller IPO reduces the impact of speculator dumping and improve price stability.
A majority of the Skycoin will be distributed to the user base within the first five years. We learned the mistakes of Ripple and will not repeat them.
We believe that distributing all the coins at once, hurts the users who came in later and are committed to a gradual, Bitcoin like distribution. Mastercoins and other coins that did a single large IPO, failed to create an incentive for users who came in after the IPO and there was no financial incentive for later users to adapt the coin.
Coin Distribution:We are looking at different models for distributing the rest of the coins and we have a few options.
1. Release 0.1% of the coins per day and taper the release rate over time
2. Give coins away as subsidies and incentives for running mesh network nodes (example: $200 subsidy per mesh network node)
3. Hoard all the coins so we feel rich
4. Developer bounties
We like the mesh network node subsidy, because it requires buying hardware (proof of burn), can be verified and increases the value of Skycoin. We are able to verify the geographic location and setup of the nodes, through third parties.
The official policy is to keep Skycoin scarce and to protect and grow the equity of the existing Skycoin equity holders. This means, that we will give out coins for things that may increase the value of Skycoin, but will not give out coins randomly or dilute the existing stakeholders.
The official policy is to promote price stability and gradual appreciation.
