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Update at 7:25 a.m. Pacific: This ICO has been canceled: “EXMO is calling off a planned crowdsale to the wider investing public due to full supply of its own funds for margin loans and other product launches.” The original story is below.
With the market of Ethereum and other tokens growing by 300,000 percent on average year-on-year (or by 6.7 times monthly) since January 2017, initial coin offerings (ICOs) are poised to become one of the most disruptive investment tools in the digital era. But investors need to be cautious.
Evaluating all the possible associated risks and opportunities is a complex task, and plenty of projects that get financed through ICOs never grow up to see the implementation of the initial plans outlined in their white papers.
EXMO aims to change that with the launch of the EXMO Coin to attract additional investment capital. Their crowdsale is designed to support a variety of growth strategies, the company reports.
Half of the investment raised through the crowdsale will be leveraged to meet the increasing demand for margin loans; another quarter goes to overall cryptocurrency exchange development. The rest will go into establishing the margin loan insurance fund, acquiring the necessary licensing for simplifying the fiat money transactions, ensuring early investors’ bonuses, and marketing expenses.
“The collected investments will be used to expand our dedicated margin loan fund,” says Sofia Neduzhko, EXMO’s PR manager. “Instead of being a platform for peer-to-peer lendings, we are going to provide loans to our customers in crypto and fiat currencies. This will allow us to provide a leverage for more traders to boost the development of EXMO.”
Because EXO tokens are issued by a business both in operation for five years and already profitable, investment risk is considerably reduced, says Ivan Petukhovsky, EXMO founder. The value of EXMO Coin will correlate with EXMO`s overall performance, as well as exchange rates of other currencies on the platform.
The EXMO platform has been operating since 2013, and has almost 1.5M registered users globally, and an average daily trading turnover of 10,000 BTC. In 2017, buoyed by the increased market interest in cryptocurrency, they saw a 188 percent surge in their client base, along with a $1.1 billion trading volume.
Following the sale, the EXMO Coin will be traded on the EXMO Exchange along with other currencies in pairs such as EXO/BTC and EXO/ETH, with the goal of adding other altcoins, plus currencies like USD and EUR. EXMO has announced a token buyout guarantee, with a warranty outlined in their crowdsale white paper.
Once the company raises $250–$300 million, they also aim to start acquiring their competitors in order to increase the capitalization and scalability in new markets, enabling EXMO to list the EXMO Coin on several exchanges simultaneously.
The crowdsale will allow EXMO to provide more margin loans, which lets traders earn more on currency fluctuations by borrowing extra funds — enabling them to trade cryptocurrencies at an even larger scale.
EXMO will offer 1:2 leverages in a margin loan on BTC, ETH, USD, and RUB currency order books, with more options to come in the future as demand increases. And investors will receive 50 percent of the revenue derived from margin loans, distributed as monthly dividends, based on the size of each token holder’s investment.
The company says that EXMO token value depends on factors such as the popularity of margin trading on the crypto market, as well as the speed of overall EXMO exchange platform development. And to allow investors to check up on the value of their tokens, they helpfully offer an online EXMO Coin Calculator.
Profitability for investors, they claim, will come from the monthly dividends accrued on top of existing tokens as a part of the platform’s profit from margin lending, as well as the increasing value of the EXMO coin.
“In margin trading, we believe that the trend of using leverage to trade on a bigger scale is becoming more and more popular,” says Petukhovsky. “It is logical for the cryptocurrency world to adopt the mechanism as well.”
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