In a recent blog post from Brayton Williams of Boost VC—he has announced that the San Mateo – based venture capital firm will start investing in Intitial Coin Offerings(ICOs). Boost VC has invested in more than 180 companies and being deeply involved in Blockchain technology for over 4 years and they plan to find low level protocol stack to help build out decentralized Internet, then to developer a new encryption currency with low volatility. They also try to develop tools for running distributed autonomous organizations, and develop new governance models.

ICO(Initial Coin Offering), starting from the initial digital encryption currency as a return to the way to financing. In essence, ICO is belonging to “Public Offering”, and turning the issue subject from the stock into digital encryption currency. Of course, so far ICO has only been invented for a brief time. But we also should take care of ICO, a project in its inception has many flaws and we can see the following major risks.

Free from auditing and custody. Nowadays, a standard ICO only need release a white paper and then ends when the project is launched. There still lack of the certain rules. Recently, people are crazy for ICO to collect money, and more and more currencies have been developed.

Over-commitment. ICO is some ideas and plans that written in paper and then people need to pay real money. Of course, questions remains with its materialization.

Over-pricing. There is no detailed or convincing pricing mechanism so far. And the price is determined by their own understanding or based on the project need. Therefore there might be issues for over-pricing.

Too optimistic investors. Most investors are too optimistic to the growth of ICO and pay more attention on them. However, it couldn’t sustain the stable growth in the long run.

Risk-control measures. It is difficult for investors to control the project. The future for ICO is uncertain. And there is no financial institutes to control the risk, meanwhile, the developers are not sure for the future developments plans. So the investors are in a dangerous form without risk-control system.

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