IOTA Introduces the ISO: A New Crypto Crowdfunding ModelOct 16, 2018, 7:52AM
IOTA's TomTom is changing the way crypto projects carry out fundraisers by introducing Initial Service Offerings. Will this benefit investors?
IOTA's community member TomTom has plans to put its own spin on fundraising in order to promote project development on the Tangle. The new fundraising scheme has been named IOTA-ISO, which stands for "Initial Service Offering." Under this model, IOTA fundraisers will resemble an ICO combined with a Kickstarter campaign.
Unlike ICO-funded initiatives, IOTA projects will not introduce their own tokens. Instead, participating projects will have to use IOTA's native MIOTA tokens, which have an established value. This restriction will avoid some of the obstacles of ICOs. Currently, the SEC heavily regulates ICOs due to their highly speculative value and frequent fraudulence. As such, IOTA-ISO will enable projects and startups to more freely solicit funding.
The IOTA-ISO model will also benefit independent investors. Whereas ICO investors receive tokens in exchange for funding a project, ISO investors will instead receive free services, hence the name "Initial Service Offering." If a project fails, the investor will receive IOTA tokens as compensation. This means that users do not have to worry about a crypto project failing, which is fairly common.
IOTA is an experimental platform that has always done things differently; it eschews a traditional blockchain, and basic features like smart contracts took a long time to arrive. Fortunately, IOTA's innovative ISO model may soon provide a safe and useful feature in a legal landscape that makes ICO investment an otherwise difficult task.
Don't forget to check out our IOTA series for a more in-depth understanding of the platform, its applications, and more.
Disclaimer: information contained herein is provided without considering your personal circumstances, therefore should not be construed as financial advice, investment recommendation or an offer of, or solicitation for, any transactions in cryptocurrencies.