EOS’s Misunderstood Korea Announcement

Did the market not get it?

On January 13th EOS a decentralized applications “dapps” platform competing with the likes of Ethereum and Neo, hosted an announcement event in Korea that seems to have been a complete flop. A fifteen-minute-long announcement with a segment in Korean, did not impress the market; EOS token price hit all-time highs in the hype before the announcement and soon after witnessed a significant drop. The Korea announcement has been misunderstood and ignored in my opinion, the market seems to have missed the significance of the announcement.

Misunderstandings have been a recurring theme for EOS, their ability to communicate their sophisticated and complex solutions as well as the details of their blockchain has always been poorly received by the market even though EOS is probably one of the most promising projects in the crypto market.

The Korea Announcement

One of the biggest concerns of EOS is their terms and conditions as well as their ICO structure. Block.one is a for profit company based in the Cayman Islands which is creating the EOS software and launched the EOS ICO. In its early days EOS was considered by some in the crypto community to be a dangerous investment due to its harsh terms and conditions specifically the part that states “The EOS Tokens do not have any rights, uses, purpose, attributes, functionalities or features, express or implied, including, without limitation, any uses, purpose, attributes, functionalities or features on the EOS Platform.” EOS’s reasoning behind these terms is that they are being very careful not be labeled as a security by the Securities Exchange Commission (SEC). The ICO structure was created as a token distribution mechanism, so that the coin is distributed to the highest number of people before the launch of EOS in June 2018. The EOS ICO runs for a year and currently distributes 2,000,000 EOS tokens daily until June 2018. The money earned from the ICO is booked by Block.one as revenue and not an investment. This had the crypto currency community baffled, confused and very skeptical. What guarantees do EOS token holders have that the money raised in the ICO will in fact be used for the growth of EOS?

The answer came in the Korea Announcement. Block.one announced that they are committing one billion dollars of the money raised in the ICO to fund future dapps built on EOS and the creation of EOS VC as the unit responsible for distributing, managing and growing the fund. In addition, EOS announced the first project that EOS VC will invest in, which is Everipedia. Everipedia is a for profit fork of Wikipedia that is planning to migrate to the EOS blockchain. As a result of this investment, Everipedia announced that they will not be doing an ICO rather they will airdrop their token to EOS token holders. This airdrop it was announced, will set a precedent for future projects funded by EOS VC. In other words, any project that EOS VC invests in there is high probability that EOS holders will receive a percentage of that token as an airdrop.

Conclusion

The EOS Korea Announcement was misunderstood and its implications ignored by the market. A billion dollars of the money raised from the EOS ICO is now officially committed to projects on EOS, the projects funded get airdropped to EOS holders as the mechanism for token distribution instead of ICOs. These airdrops will start factoring into the value of EOS as more and more projects get funded and more airdrops occur. The uncertainty of “how the EOS ICO funds will used?” has been cleared, confirming that the EOS ICO funds will be used to grow the EOS blockchain.

The question remains can EOS successfully educate the market and ease their concerns in the coming months or will the market realize the potential of this blockchain only after it is launched in June?

Disclaimer: The intent of this article is for information use only. This is not intended to be investing or trading advise. Please do your own research, Crypto Currency Market is extremely volatile.

I own a portfolio of cryptocurrencies including mostly Ethereum, Bitcoin, EOS and Neo. I am big believer in blockchain platforms as an industry.

Sources:

EOS technical white paper

EOS website

Epicenter Podcast