Last week we wrote on the Ethereum ICO ecosystem in the lead up to the Gnosis token sale. Gnosis, which aims to revolutionise prediction markets using the Ethereum blockchain and the “wisdom of the crowd”, opted for a reverse Dutch auction for their ICO. To put it simply, this style of auction meant that the faster Gnosis tokens (GNO) sold, the higher the proportion of total token supply would remain with the developers and the higher the price per token – investors were therefore incentivised to wait for a lower price as time went on.
In the previous article, I conservatively anticipated that the ICO would last no longer than a week. Embarrassingly, the ICO lasted no more than 12 minutes, exhausting the full 250,000 ETH target in record time. The result? Thanks to the reverse Dutch auction format, investors now hold just 4.2% of the total GNO supply, with the remaining amount set aside for the Gnosis developers. The total valuation of the Gnosis platform now stands at – quite obscenely – $313M.
To put this into perspective; Facebook with 5.5 million active users in 2005 was valued at $87.5M. More closely related, the competing prediction market Augur, with an established beta platform and an existing userbase, was valued at $130M ahead of the ICO. Interestingly, Augur’s price increased by nearly 40% in the hours following the end of the Gnosis ICO.
With the upmost respect for blockchain investors, this latest ICO has highlighted a craze that may well indicate the beginnings of a “Dot Com” style bubble. Whilst it would be fair to anticipate that this may be some years off (investing and securing coins/tokens eludes the vast majority of traditional investors), such a high valuation of a company with no working product is unprecedented.
Now that the ICO has completed, we are very excited to feature GNO on this site once it hits the exchanges. Stay tuned.