Ok, so the title may be a little grandiose, but read the article anyway, you may find yourself buying some EOS tokens after you do.

Over the last twenty-five years I’ve built, bought and sold several businesses. I’ve also had my series 7 and 63 licenses and I’m pretty good at analyzing opportunities. It’s how I have made my living. So, I am looking at this opportunity from a financial and business perspective only, not the tech. There are plenty of other sources you can review for that. I am assuming the tech will work as outlined in the white paper and as presented by the founders in several interviews and presentations. Based on my research, announcements made by large adopters, and the hundreds of millions in joint, private equity deals Block.one has signed with Mike Novogratz and Eric Schmidt, I have every reason to believe the tech is great. Mike is a billionaire hedge fund manager and Eric is the ex-executive Chairman of Google and one of the richest people in the world. I think it’s safe assume they did their homework prior to making their financial commitments.

So, what makes this investment so interesting and potentially profitable? Well, several things, but let’s start with the team. Yeah, I know, everybody says “The team”. Skip this part if you want to, but all three; Dan Larimer, Brendan Blumer and Brock Pierce have built successful platforms and businesses in the past. Mr. Larimer, the CTO, built Bitshares and Steemit, both top 50 coins based on Market Capitalization and very successful in their own right. Dan is widely regarded as a visionary programmer and he is the developer of the block-chain technology Graphene, which powers both his previous projects. Mr. Blumer and Mr. Pierce have also built several successful businesses, details of which can be found online. Trust me, both are impressive, but I don’t want to waste time singing their praises. Just look at the information below and you will see they have already made some brilliant moves.

“A woman holding a white mug with a “like a boss” print” by Brooke Lark on Unsplash

Brilliant move number one. 341 Dutch Auctions. Whoever decided to do a Dutch Auction type ICO should be rewarded with an additional pile of tokens. Google is the only other company I can remember doing this, but they only did it for one day. It essentially allows Block.one, the developers of EOS, to receive a higher price for their EOS tokens as they prove out the tech and increase awareness. What’s the impact of this type ICO? Cash! mounds and mounds of cash! This provides Block.one with an, almost, absurd amount of liquidity and has made it the most successful ICO EVER! They are still selling 2,000,000 tokens every 23 hours for $18-to-$20 million at the current price. To date, they have had 240 auctions and have another 110 to go. Auctions end June 1st. I estimate they have already raised $1.5 billion dollars[1]. I believe they will raise another $2.3 billion before their auctions are over[2]. Oh, and let’s not forget about the 200,000,000 tokens they sold for five days prior to the daily auctions; that’s another $185 million, which is almost chump change at this point.

Another important point to consider is that Block.one only accepts Ethereum as a form of payment for EOS tokens. ETH was $288 a token when they started raising money. Let’s assume they have only sold the amount of ETH they’ve required for business needs, development purposes, marketing and G&A. That means the money they’ve raised, and will raise, could be double, or at least much more than, the 4-billion-dollar amount estimated just based on the appreciation of their Ethereum tokens. They could, potentially, be sitting on $7-to-$10 billion dollars’ worth of Ethereum at the end of their auction. Talk about compounding profits! Ethereum was trading above $900 today and it’s been as high as $1,400.

“A close-up of woman's eyes through her hands surrounded by fairy lights.” by Rhett Wesley on Unsplash

What does this mean? Power! — Block.one is building a competing platform to Ethereum and could, potentially, be sitting on 5 to 10 million ETH tokens with no real need for them[3]. If you are holding a lot of ETH this should scare the shit out of you! Block.one’s headquarters are in Hong Kong and they were formed in the Cayman Islands, so their Ethereum tokens could potentially be converted to fiat tax free without much fuss. Or, maybe they prefer to hold BTC going forward. ORRRR what if they buy EOS tokens with their ether after their platform launches and their own, native, token is live? They could, significantly, raise the price of EOS tokens, it’s market cap, the profile of the company, and kill the price of ETH at the same time. Maybe Block.one wants the number two spot on Coin Market Cap for EOS. It sure would raise the profile of the founders and benefit them in their future business ventures. We’ve all seen how easy it is to move the market over the last 30 days and how little money it actually takes. Block.one has billions! On top of that, it’s not that far-fetched of an idea. If they think their platform is the future, do you really think they want to keep all their money in the token of their biggest competitor? One they think they are going to be better than and potentially crush. I mean, why would they keep their money in ETH tokens? The answer is they wouldn’t. It would actually be foolish to do so. I’m not the first person to worry about erc20 token ICO’s potentially affecting the price of ETH. It’s been a concern for a while. Block.one’s EOS token sale has been so big, that I think it’s time to really consider what it means to ETH.

““We like you too :)” written on a white brick wall” by Adam Jang on Unsplash

So, what does all this money provide? Influence, and a lot of it. With this kind of money on the books, the best of the best, in employees, partners, developers, influencers, and just about anyone else that can add value to EOS can be very well compensated and incentivized to work for Block.one and on EOS. This gives them tremendous power in the block chain market and the potential to pull solid talent from other, undercapitalized, projects. They’ve already hired Richard Jung, former CEO of Bithump and a former senior executive at Alibaba to lead development in Korea. They’ve partnered with Mike Novogratz and Eric Schmidt to invest in promising DApps and ventures and bring them, exclusively, to the EOS platform. They’ve also, through Galaxy, invested $30 million in Everipedia. All this, and the EOS platform has not even launched yet. Think about what will happen when the platform launches in June and does everything they said it was going to do. It’s going to be explosive growth and announcement after announcement, after announcement.

Another nice benefit to EOS token holders will be the Airdrops. I don’t know that this is how all of them will be handled, but Mike Novogratz’s, Galaxy Digital fund, a joint venture with Block.one, and others, invested $30 million in Everipedia. In lieu of an ICO, EOS token holders will receive an airdrop of Everipedia tokens. Can you imagine the dividends received by EOS token holders if this becomes the method of distribution for Block.one’s invested projects? This could be an enormous benefit to token holders and really encourage them to HODL. It will also be amazing press for EOS and Block.one. It’s a win, win really and they have to do something with all that cash; you can only buy so many Lambo’s! It looks to me like they are going to invest in DApp’s for EOS and benefit the token holders, which in turn, benefits Block.one, the largest token holder of them all.

Soon, the daily dilution of existing token holders will end; on June 1st to be exact. Right now, two million EOS tokens are being added to the market every 23 hours via their auctions. This is not the same as inflation because the existing token holders receive no benefit; they are just diluted. After June 1st, if you want to buy EOS tokens, you will have to buy them from an existing token holder on an exchange. If demand stays the same, then the price will have to go up; simple supply and demand.

So, I have read posts about Block.one just running with the money. This is absurd! Block.one owns 100,000,000 million EOS tokens so they have a vested interest in EOS’s success. Their interests are aligned with the token holders and they have already invested in high profile employees, partnerships and DApp developers. The higher the price of the EOS token, the more their 100,000,000.00 tokens are worth. Plus, I get the impression they all have something to prove. A lot of mud gets thrown around in the crypto world and I think they would like nothing better than to knock one out of the park. Nothing like success to send out a big, fuck you!

Lastly, do I work for, or have any association with EOS, Block.one or any other associated affiliate? No, I do not. Am I being paid to write any of this? No, I am not. Do I own EOS tokens? Of course, I do, along with a few other promising projects. Would I be sharing any of this analysis and research with you if I didn’t? Probably not. I’m comfortable and a little lazy too… so doing all of this work just to write an article is not my style.

“A piggy bank on a white surface” by Fabian Blank on Unsplash

In closing, never rely on someone from the internet to make decisions for you about investing. Do your own research, ignore the FUDsters that only like their coins and the shills that pitch their coin of the day because it’s about to shoot to the moon! And never, ever invest money you cannot afford to lose. I repeat, never, ever invest money you cannot afford to lose. You are still early, in the world of crypto investing, and there are many fine projects out there. Find a few you believe in and hold on for a while. I think you will be nicely rewarded.

Happy investing and may all your dreams come true!

Todd

[1] 2 million tokens x an average price of $3.10 per token over this period x 240 periods.

[2] 110 periods x $10 average price x 2,000,000 tokens for each period remaining

[3] 900 million EOS tokens sold x an average price of $5 for each token with an average ETH price of $600 = 7.5 MILLION ETH tokens.