Huobi Prime + Reserve: Is it an airdrop, IEO, or DPO?

in #blockchain3 years ago (edited)

The Crypto space is home to myriad innovations that go beyond technology and stem into marketing.

As projects have had to fiercely compete for the Crypto community’s attention, marketers in this space have been forced to think out of the box. One of the most common approaches undertaken by projects—particularly new ones—is the issuance of airdrops.

Airdrops started off as a successful means of attracting interest, but the use of this marketing method quickly became saturated. Today, airdrop lists are often comprised of hundreds of projects offering varying amounts of free tokens on a number of blockchains. The result is that offering an airdrop no longer attracts the degree of attention it would have in 2017. However, airdrops don’t seem to be dead; rather, successful airdrops might be resurfacing in a new format.

Major Exchange IEOs: Just an Airdrop

Initial exchange offerings are the evolution of initial coin offerings. However, this is primarily true for projects that are raising the larger portion of their capital needs via an IEO. There’s a growing trend in which projects launching on major exchanges, like Huobi, have already raised the major portion of their capital needs in private rounds. These projects issue a small, low-priced allocation through an IEO.

For example, Huobi’s last IEO & DPO, Thunder Token, raised over $50 million in private funding rounds. Its launch on Huobi Lite was a mere $500,000 sum—just 1% of the sum raised through private funding.

The Thunder Token IEO & DPO sold out in an instant and opened on the secondary market to a near three-fold increase in price compared to the IEO/DPO round. Such price hikes on Huobi’s IEOs & DPOs have become the norm. Retail investors quickly swarm at IEOs on the highest volume cryptocurrency exchanges with the intent of making a quick profitable flip.

Huobi's next Prime offering (IEO & DPO) might further strengthen the theory of Huobi’s DPOs being simply a new shell for free Crypto gains, ergo airdrops.

Reserve Token IEO/DPO—or is it an Airdrop?

Reserve Protocol, is a project that has recently caught fame amongst the wider Crypto community due to its IEO & DPO on Huobi. Reserve is creating a decentralized stablecoin and the project’s mission is supported by major Crypto firms like Coinbase and well-renowned Silicon Valley entrepreneurs like PayPal co-founder Peter Thiel.

The vast portion of Reserve’s capital was raised during the project’s seed and private rounds, and thus most of the Crypto space was not a part of the project's community. This is evidenced by the project’s meager Telegram base of less than 1,500 people.

Exchanges like Huobi have millions of active users. Their IEOs/DPOs provide more than a capital raise; a token offering on such a large exchange is the most impactful marketing campaign as a massive portion of the Crypto space gets an immediate insight into the project that’s about to be launched on Huobi Prime. However, to garner as much interest as possible, Huobi has set Reserve Protocol’s launch price at a far lower rate than the project’s private sale price. This is absolutely unprecedented but it has the remarkably positive impact of driving retail investor interest due to the potential opportunity this IEO & DPO may offer to the masses.

There is, however, a caveat.
While Reserve's private sale investors were able to buy tokens valued up to $500,000, the projected average buy value of the IEO & DPO participants is between $100 to $200. Thus, even if the project kicks off its trading pair with a several-fold gain, the average earning of IEO & DPO participants will be limited to a scale of earnings more typically associated with a good airdrop.

The New Airdrop

While some projects look at IEOs as a new means to raise capital, others have amped their marketing potential by leveraging IEOs as a tool to reach the mass market.

To make the most of its token sale on Huobi Prime, Reserve has made the IEO & DPO price far lower than the private sale price, but has greatly limited the amount participants can buy. Thus, Reserve Protocol might be the first project to execute an airdrop in the format of an IEO & DPO

This new form of airdrop remains rewarding to the public but organically screens out those participants who are interested in just free money. Since an initial capital expenditure is required, participants are inclined to actually learn about the project, thereby converting a much greater portion of retail investors into supporters as opposed to the conversion rates of a typical airdrop.

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IEO is not an airdrop man... its fully opposite

What makes airdrop called an airdrop is because it's free not purchased.

And it could not be shifting to just being highly overpriced as that price barrier forces people to do at least some due diligence.

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I know it's not an airdrop in the classical sense, but consider that Reserve's IEO price is magnitudes lower than its private sale price. It essentially comes off as a means to give retail investors a low-priced entry point in return for attracting mass interest. Same functionality as an airdrop.

IEO was how almost every asset were launched in like 2013
Asicminer iceDrill satoshidice.
I guess it's new again now

Wow, didn't know that.
Seems trends are cyclical.

Since last year IEO/ICO are risky.

On the contrary, the market's responded with rather bullish sentiment to IEOs this year.

Maybe i will try one.

The main exchanges' IEOs sell out within seconds so it's quite the race.

Yes when it is a good IEO.

Good topic. Thanks for sharing.

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Yep they certainly are!

Haha good to see some agreement.

The problem actually is how to find the real one. I once engaged in one and it later turned out to be a scam

You'd have to go by the reputation of the exchange. Huobi, for example, is very well-established.

Okay. If you say so

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A very interesting assessment to new airdrop. Thank you for this valuable post

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Hi @hatu

And as we do mortals, example someone like me to be able to have these The New Airdrop

@hatu its really a valuable Post

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good point, I hope it is 100% real

Very awesome article!
Thanks for the update!

Reserve Rights Token (RSR) is not an airdrop but an IEO, which we covered for beginners in our last Q1 Report

We've also on close watch of RSR to publish its price as soon as trading is made public.

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