ICO Analysis of Blockport – Liquidity Issue
Cryptocurrency ICO, News 2018-01-23As I write Blockport (website) is preparing for its crowdsale ICO.
The website is very good and the whitepaper is of a high quality. The team look trustworthy. The product looks good.
Note included in the Whitepaper is a Token Disclaimer which says,
2. Warnings
You acknowledge, understand and agree that ownership of the Blockport Token does not grant
you or any other user the right to receive profits, income, or other payments or returns arising
from the acquisition, holding, management or disposal of, the exercise of, the redemption of, or
the expiry of, any right, interest, title or benefit in Blockport, or the Blockport Platform, or any
other of Blockport’s property or any part of it. It is significantly more likely that you will lose all of
value that you or third parties attribute to the cryptocurrencies provided to Blockport in exchange
for Blockport Tokens than any value you may gain.
Blockport believes that, amongst other based on the famous Howey test and the definition of
securities in the (recast) Markets in Financial Instruments Directive, the Blockport Tokens
should not be deemed as securities or a collective investment scheme:
(i) the Blockport Tokens do not grant you any voting or ownership rights;
(ii) the Blockport Tokens do not grant you any return on investment;
(iii) the Blockport Tokens do not grant you any profit and passive income from the ownership of
the Blockport Tokens;
My bold.
It is a pure “utility token” (read about these here) and the only way that you can make any return on investment is from capital appreciation of the token.
BUT THEY DO NOT COMMIT TO LISTING ON ANY EXCHANGE THERE IS NO LIQUIDITY
My own personal reading of the token economics suggests that since they use the token as collateral for their open market trades they will not be able to make it liquid for many years. I could be wrong and I will keep a close watch on how this comes out.
- I will not be investing
However it looks like a great product for users and I look forward to using it future.
<update 2018-01-23>
In the Telegraph forum they claim that the tokens will be unlocked and traded on Etherdelta from tomorrow. This will potentially provide some liquidity if there are buyers who expect the token to be listed on a popular exchange at a later date.
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