EOS.IO ICO and Trade Value FUD
There is a lot of posts about EOS ICO here and some have covered what I think about Block.one ICO model. I am not going to criticize or question it as doesn't matter what, it is decided. I'd cover what I think best in term of investment strategies. Value of the tech and value of a trade should go together, which is something we don't have in chaotic cryptoland with countless pump and dump of shitcoins. When value of a trade is more than value of a tech, a coin is overly bubbled and full of speculation. In this thread, I will write about value of a trade as EOS is a new young technology with potentials but not yet verified.
There is no coin, including BTC or ETH, has a full 24 hours without FUD, let's break down the FUD & FOMO circumstance.
Here is the information about the ICO (which I believe most people read)
The EOS Token sale will be conducted on a continuous distribution model for 1 year. 1,000,000,000 (one billion) EOS tokens will be minted at the start of the sale. These tokens will be split into different rolling windows of availability. The tokens for a window will be split proportional to all contributions made during the window period.
20 EOS are available during the window
Bob contributes 4 ETH
Alice contributes 1 ETH
Bob contributed 80% of the total contributions and gets 16 EOS
Alice contributed 20% of the total contributions and gets 4 EOS
At the start of the sale, 20% of the total minted tokens (200,000,000 EOS) will become available during a 5 day window.
The remaining 800,000,000 EOS will then be split evenly into 360 one-day windows of 2,222,222.222222 EOS tokens each._
Now ... 1ETH is $350, if you want to buy EOS without having ETH from $7, prolly you should not participate in ICO dist time. It is too late for you and not designed for you ... late birds which woke up late to the dawn lol.
The matter is NOT how many ETH you put into the pot during 1 day window because it does not give you the ratio of 1eth = x EOS. It is pure luck gamble and uncertain blind dutch auction.
On day 11st of ICO, you send 100ETH, but the total ETH they receive is 1000ETH, you get 10% of 2.22M EOS (i.e. 222,222EOS) and assuming ETH price is $350, meaning you pay 35,000USD for 222,222EOS aka 15c each EOS. However assuming ETH go to $400 and you still send 100ETH but total ETH they receive is 2000ETH, you will get 5% of 2.2M EOS (i.e 111,111EOS). It will cost you 0.36c (aka net negative -73%)
It is full of uncertainties ...
Now talk about Fear
Cryptoland is in bubble mode, we just don't know when the music ends. Not everyone lose money when bubble bursts, only ones with the last bag cry to the pillow ... How many times we read title of "ICO Scam", "Beware XYZ ICO", etc.
EOS is known as ETH killer but ETH/USD is riding on the back of EOS ICO to go up, just like what we have seen with BAT token. This time, it will be 369 days of ETH pumping ... or not.
If you reflect your trade profit in term of crypto, i.e. 1ETH is 1ETH not 1ETH to $350 and don't mind 1ETH drop to $7 then you are on. EOS ICO does not care how much you paid for your ETH but 1ETH is 1ETH. It means ETH earliest adopters who know well ETH is broken ... will able to unload their ETH at the highest possible cost to late bird while buying most of EOS at cheapest price. This will leave late birds handle the fear of bubble burst as they end up with the least possible EOS token when buying with the highest possible ETH price.
It is double profit for ETH earliest holders but triple kill for late birds as you have to handle the crypto/fiat hedging bubble. Mind you that most ETH are not in circulation but being locked in other earlier ICO as well. Time wise value of money ... if you buy ETH now to enter EOS ... you walk on a very thin ice with ticking bomb underneath.
And lastly, DOUBT.
It will be drama, a lot of drama for a technology to be successful. First they have to prove how solid the tech is ... but also the adoption rate. Even BTC, been there done that with 8 years working without a single failure as it was designed not to failed but the scalability issue raises the doubt in people when investing ... EOS will not escape from this fate. Doubt is inevitable in cryptoland.
When you enter into EOS ICO as a late bird, dealing with above fears and uncertainties ... your doubt will be more than others.
So ... what should I do?
IMHO EOS is a good disruptive tech with ability to make ETH obsolete so I don't have doubt now unless a black swan red flag is waved. I'd wait for the second market to remove hedging risk, uncertainties and fears to protect value of a trade.
And my final thought on EOS ICO auction model ...
except you don't get the gal but still end up paying for the price you bid :D
Oh, adding ETH time value of money ... a bad baby ICO from ETH but from along time ago when ETH was $7 raised 100,000ETH aka $700,000 at the time is now 36M USD ... so adios.