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Blockchain Finance Financial Services

5 things you should know about the IEO

Is the initial exchange offering, or IEO, the new form of fundraising? Like the initial coin offering before them, they have attracted the blockchain world’s attention. But are they really a sound alternative? In this post, I’ll dive into the technical, fundraising, business, security, and legal aspects of the token offering. Here’s what you need to know about IEOs.

Short for initial exchange offering, the IEO is one of the newest ways for blockchain startups to raise initial funds. But how do they work? Promising to avert some of the worst of the ICO phase, IEOs involve exchanges directly instead of inadvisable methods such as the token airdrop to distribute tokens. First, a startup sells tokens for users to spend as an internal currency or as a voucher to access their platform, and any discounts, services or products. The entire process depends on the demand for the new token, which funds the first stages of startup development.

Key to this model is that startups don’t sell tokens themselves, but rather collaborate with cryptocurrency exchanges who organize and execute the token sale. Exchanges such as Chinese exchange ZB.com are established companies with existing customers, so they can handle the promotion of the sale and secure customer accounts. Normally traders can immediately trade their tokens processing time has finished, but sometimes there are vesting periods for tokens – they are held for a certain time. Considering that IEO is mostly based on tokens with solely a utility/ payment function, rather than security features  (for example, share participation in a company), trading tokens is a method to grant liquidity for the platform, rather than an investment in a traditional and legal sense of the word. 

1. Technical aspects

To explore the technical aspects of IEO, I decided to consult my colleague Marcin Rzetecki, blockchain consultant at Espeo Software and vice-president of the Blockchain Polska Association (in Polish). He is well-known for his vast experience in IT and extensive knowledge of digital currencies.

According to Marcin, IEOs are presently the best way to raise money, especially compared to the ICO and STO. ICOs have lost people’s trust in the last months, as many of ICO-based projects were announced as scams or failures. The IEO is a breath of fresh air in his opinion and has several success stories to prove its credibility, such as BitTorrent, Celer Network and Matic Network, all of which have achieved success on Binance through an IEO. When asked about pioneers in cryptocurrency exchange, Marcin pointed out that, “there is no other exchange that has done its own blockchain, but Binance has achieved it. They have also made their own successful token — Binance coin. It allows you to spend it on the Binance platform.” 

Regarding technical aspects of IEOs, Marcin said, “investors don’t take much interest in a technical approach. For them, the new form of fundraising should be safer than before. I think Binance found the best solution. They have the entire ecosystem to the IEO such as its own blockchain, its own cryptocurrency, and proven publication processes for new projects. Generally, with Binance, things would be the easiest way on the technical background.” 

Theory aside starting an IEO is roughly similar to the ICO. Creating a solid business foundation, therefore, is the biggest challenge to tackle. Sylwia Rogowicz,  Lead project manager and co-founder of Espeo Software, shared what she believes will make IEO projects successful. 

“An excellent business model described in the white paper and well-prepared tokenomics [are essential],” she said. “From a technical perspective, both the token and the sale are prepared according to the business model, so it must be of great quality.”

Meanwhile, Hakan Atabaş, founder of Geliyoo (in Turkish) cites IEOs as a safe method of exchange and recommended it for startups. Of course, cost is something every startup wants to know. One downside to the IEO is the cost. The fees charged by exchange companies can range from $250,000 to $400,000 USD, according to Hakan.

2. Fundraising aspects

After covering the technical aspects of IEOs, let’s focus on fundraising and investment. I also spoke to Ethan Pierse, director of The CryptoAssets Institute, founder of Borderless Ventures to dive deeper into the subject. For him, the difference between IEOs, ICOs, and STOs from the investor and fundraiser point of view is purely about who’s selling the tokens.

“An IEO”, he said, “is just an ICO run directly on the exchange, nothing more. Exchanges run due diligence before accepting the IEO for particular projects.”

While IEOs gives many an opportunity to raise money for interesting projects, it is not 100% secure. It simply offers immediate utility, not future utility, which lets projects gain more visibility. In fact, during the crypto winter, only IEO projects became big fundraising hits. However, Ethan remains cautious. He questions how diligent the due diligence checks are.

“[It’s unclear whether] the exchanges are really doing very thorough due diligence or just taking the money for the IEO,” said Ethan, “including listing on their exchange.” 

Investors want valid projects, rather than pure ideas, which explains Ethan’s doubts. Ethan also points out that many people involved in ICOs and IEOs don’t understand the value of hard capital, because they raise money too easily.

When I asked him whether it is better to choose a big worldwide exchange or a local one, he said it all depended on a project. Local projects benefit greatly from local exchanges, while global projects thrive on the biggest worldwide exchanges such as Binance. 

Investor interest in the initial exchange offering may come from the feeling that they are somehow more legitimate. One huge plus generally is in marketing support. “Exchanges do provide visibility,” Ethan offered. “They’re creating content and visibility for your project and shifting it toward exchanges and your project. It also saves money for the project because part of the ICO fundraising would normally go toward listing the token on an exchange.” 

All in all,  if you aim to raise funds for an existing blockchain project and the token has immediate utility at issuance, an IEO is an option to consider for your business. 

3. Legal aspects

Of course, the elephant in the room for all blockchain projects is the complex, often unclear web of laws and questions of jurisdiction. To learn more about the legal aspects of IEOs, I talked to Pavel Vasilevski, who provides legal advice for the financial industry and has a vast experience in a blockchain stock exchange.

Pavel stressed that the jurisdiction of the platform chosen to conduct IEO on is very important, as “its reputation and regulation will have many repercussions on the performance of the offering.” He said that “from the IEO perspective, any legal entity located in Switzerland or abroad can conduct an IEO with a crypto exchange located in the same or another jurisdiction.” stockup.ch  is the recommended blockchain stock exchange of his choice, as he regards it as a trustworthy and ambitious project. According  to Pavel “the biggest challenge is to find a proper crypto exchange, which is able to conduct the IEO for a startup and willing to do everything compliant to the actual legislation.”

 4. Business Aspects

To learn more about IEO’s business potential I asked Ralf P. Gerteis, an entrepreneur, executive, and blockchain evangelist to share his thoughts on IEOs. According to Ralf, IEOs work out great for “comparably mature blockchain-based ventures, which have built up a lively community, a certain presence on social media and PR, a team that shows all necessary experience, skills and which brings a good level of reputation.” 

He thinks that IEOs make sense for products based on the strong utility of the token, especially if the company wants to develop a healthy ecosystem soon after listing. However, he predicts that the STO’s significance will increase after regulators hammer out all the legal issues. His recipe for initial exchange offering success? A careful plan, an available budget, and business maturity in all relevant aspects. 

5. Security aspects

Security comes first, so when On Yavin, CEO of Cointelligence, agreed to share his insight on IEO security, I was delighted. On says that in an ideal IEO project, everyone benefits from the arrangement: from a project team, which doesn’t have to spend too much time on marketing, through investors, who can participate in IEO projects, to exchange companies, which get their cut of proceeds. 

Nevertheless, conditions aren’t always ideal, and too often exchange companies have too much power in selecting projects and focus mainly on profits. Consequently, they ignore many great projects. On also warns against scammers, stating that “the scams can come from two fronts with an IEO: the project itself, or the hosting exchange.

Projects can be scammed by unscrupulous exchanges that don’t deliver what they promised.” He also mentioned that although exchanges should be doing due diligence, many of them don’t. What is one of the things to look out for when working with IEO? According to On, security. In his view, people “should look into what sort of insurance the exchange has for the funds it’s holding,” as exchanges are often on hackers’ radar. 

Conclusion

As with every new solution, it’s important to exercise caution. Beware of scammers, and always check whether the tool is the best match for your needs. The initial exchange offering is relatively easy to navigate and guarantees great visibility, so it could work if your project has good liquidity. A careful plan, an available budget, and business maturity in all relevant aspects should be enough to ensure your success in IEO projects, but each case is different. Minimize the risks to maximize the potential of IEO and you will discover a whole new world of business possibilities. 

After reaching out to several cryptocurrency exchanges, the cost to list an initial coin offering varies project to project. They tend to calculate based on trading volumes. For the technical review and development process, it’s also important to pick a solid partner. For more information on building and launching an IEO, drop us a line and we’ll guide you through the process. 

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Healthcare Technology

Ways smart tech can help the UAE medical tourism sector

Think medical tourism hotspots and Central America and Southeast Asia come to mind. Costa Rica, Thailand, Malaysia, and Singapore regularly rank among the top destinations for people seeking healthcare abroad. These countries have successfully marketed themselves as medical tourism destinations for decades and have built up a global reputation. This success has attracted competitors. Middle Eastern countries such as Jordan, Egypt, and the United Arab Emirates are tapping into the $60 billion-a-year medical tourism industry.

With ambitious plans to overhaul its healthcare system, the UAE began aggressively positioning as a healthcare destination a decade ago. Ten years on, brand new medical facilities and global specialists attract an increasing stream of medical tourists. AI, blockchain, and IoMT play a large role in this plan, but just how this new tech will expand medical tourism in the UAE is often vague. In this post, I’d like to suggest ways these technologies might take the UAE’s medical tourism sector to new heights.

UAE medical tourism

Motivation to travel for healthcare services varies. Rising costs and increasingly strained domestic health systems spur many to cross borders for better, more cost-effective care. Countries that attract global specialists and equip them with the latest technology can gain a competitive advantage and benefit from the growing trend. The Emirati strategy for the past ten years has been to attract high net worth individuals from neighboring Gulf states as well as countries further afield — especially China and Russia. Khaleej Times reports that 37 percent of medical tourists came from Asia, 31 percent came from other GCC countries, and 15 percent came from Europe. Medical tourists from these regions come to the UAE seeking better specialist care than what’s available in their home countries. Geography also plays a role. Convenient air links are yet another favorable aspect and part of the desert nation’s holistic plan. Dubai’s two airports and Abu Dhabi’s international hub puts the UAE within an eight-hour flight of their target markets.

Investment in new medical facilities is helping to grow the UAE’s standing. Dubai’s Healthcare City is one example of a larger initiative to achieve these ambitious goals. The world’s largest healthcare “free zone” is a magnet for both specialists and patients from across the world. As an internationally-recognized center for healthcare, Dubai Healthcare City is a robust public/private partnership unique in the region. Part of what fuels this medical tourism push is innovative technological solutions that help healthcare companies stand out in an increasingly crowded competitive landscape. A pivot to rely more on private healthcare providers has allowed the market to flourish. An influx of western technology and specialists continues to set the Emirates apart and convince global medical tourists that the UAE is a good destination.

Specialist care

Dubai’s Healthcare Authority, or DHA, reports that more than 300,000 medical tourists traveled to the Emirate in 2016, up nearly 10 percent from the previous year. The industry generated $381 million. The most sought-after procedures are in orthopedics, ophthalmology, fertility treatment, and cosmetic surgery. Each field requires highly skilled professionals and the latest medical equipment. More than simply importing the latest tech, however, the UAE is making it easier for medical professionals to relocate and work in the Emirates. 10-year visas for medical professionals have attracted many from across the world.

Meanwhile, many technological innovations the UAE has employed are software-based. Artificial intelligence and blockchain technology both factor into the government’s goal to help doctors deliver more responsive care. These tools improve the quality of care and allow the UAE to leapfrog legacy systems. A strong commitment to embrace new technologies and bring specialists in who know how to use them, increase Emirati healthcare companies’ global reputation.

Artificial intelligence

Part of the UAE’s larger goals to attract medical tourists is to put the latest technology to good use. This image as a high-tech destination sets the Emirates apart among other medical tourism destinations. One stated goal of the UAE’s healthcare focus is in artificial intelligence. The growing field promises to augment doctor decision making, possibly diagnose disease, and efficiently handle large sets of medical data. Public sector investment and private sector innovation have come together in the UAE to produce high-tech healthcare system. But more than just hype, real strides in the quality of care have launched the Emirates higher in global medical tourism rankings.

Eagerness to adopt emerging technologies sets the UAE ahead of other medical tourism destinations and allows Emirati healthcare to deliver real value to patients. One way AI can aid in the medical tourism sector is to handle lots of unstructured patient data to help doctors make better decisions. Since medical tourists will come from several different countries, bringing medical records with them poses a challenge for existing systems. Leveraging artificial intelligence is already a goal of the Emirati medical tourism sector. This is one of the many ways to put the technology to good use and attract more medical tourists to the UAE.

Blockchain technology

Just as AI plays a role in the UAE’s holistic medical tourism plan, blockchain technology does as well. Both technologies can help the UAE medical tourism market expand and bring in more patients. While AI can handle large sets of unstructured medical data, helping to diagnose medical conditions, blockchain technology can help secure this data, making records easier to transfer between hospitals and clinics within the UAE and with facilities abroad. For patients seeking a procedure in the Emirates, a blockchain-based application could facilitate the transfer of electronic health records. Handling EHR is a common challenge across the healthcare sector, however, medical tourists add additional friction to this equation. Siloed records from hundreds of different health systems cost a lot in time and resources to sift through. A blockchain-based application that puts patients in control of their records could allow them to automatically give or revoke access to Emirati doctors.

Additionally, using blockchain technology in pharmaceutical supply chains would enhance the patient experience, drive costs down, and ensure that the medical tourism sector is well-stocked to handle the influx of new arrivals. User-friendly applications that record the transport and receipt of genuine drugs can help build trust in the Emirati healthcare system and further expand the medical tourism industry.

Internet of medical things

Internet of medical things or IoMT is yet another area for technological innovation in the Emirati healthcare sector. The term comprises a range of connected medical devices that improve patient outcomes and aid patient monitoring. The UAE is already a lucrative market for wearables and is only set to grow. Health devices that track vital signs, blood sugar, or activity are popular consumer goods. Ones that incorporate blockchain or AI can be even more powerful and secure. Enhanced patient monitoring, as well as telemedicine possibilities, make IoMT a promising technology for the medical tourism sector.

Since orthopedics is one of the main focuses of the Emirati medical tourism industry, let’s imagine an IoMT device for monitoring a patient after surgery. Making sure a patient is getting enough exercise post-operation is one way IoMT could come in handy. Connecting patients, doctors, and physical therapists could be greatly streamlined with the use of IoMT devices. These technological solutions can pave the way to delivering better, more data-driven care for less.

Conclusion

Medical tourism in the UAE is a booming business. It’s set to get even larger as the number of medical tourists increases. The government’s ambitious goals to improve care and reduce costs is part of a larger plan to keep the Emirates competitive in the face of growing competition. Technological solutions such as AI, blockchain, and the internet of medical things factor into this larger calculation. Ensuring that there are enough medical professionals who know how to use them, however, is also an essential part. The UAE is positioning itself as a state-of-the-art medical tourism destination. Over the last decade, the industry has grown considerably. With the right moves and equipment, this trend will only continue.

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Blockchain Financial Services

Key takeaways from the Crypto Valley Conference 2019

With the ever-changing world, new technologies — and ways to market them — are in constant flux. Many feel lost about how to actually market and steer a blockchain business in the digital era. This year’s Crypto Valley Congerence in Zug, Switzerland was full of enthusiastic people eager to meet others in the crypto sector. I sat down with Ian Simpson, managing partner of Sionik & Head of Communications of Crypto Valley Conference to hear his tips on successful crypto business management, branding, and marketing.

Originally from the US, Simpson moved to Switzerland in 2017 when the crypto market was just beginning to take off. Zurich, the center of the so-called crypto valley attracted investors, and entrepreneurs alike. Ian recalled that in these initial stages startups pushed boundaries and redefined what’s possible. The industry was booming, ideas became the most common currency, and the city was full of excitement for whatever the future brought.

Ian loved it so much that he decided to move to Zurich to experience the emerging industry with his own eyes. According to Ian, the biggest marketing challenges are people’s closed minds. He says that since the business boom in Switzerland happened so suddenly, it was a revolution to adapt to, rather than an evolution to stop. Such a turn of events let the industry progress surprisingly fast. Though many projects never became the next success stories, Switzerland did establish a reputation as a dynamic business hub in the digital era.

As new industries spring up and old business models fade away, navigating business becomes more adventurous than ever. Blockchain has changed the DNA of industries such as medtech and has helped many make strides in digital transformations. Can we learn to thrive in the digital era if technical revolutions seem to happen almost overnight? Are there any safe hubs for business, when marketing currents constantly change? Simpson suggests certain branding strategies frequently work. What is Ian’s take on the modern market, cryptocurrencies, and the business climate in Switzerland?

Tap into growing blockchain enthusiasm

The revolution in cryptocurrencies has brought interesting organizations to life — ones eager to disrupt existing models. The Crypto Valley Association is one of them. The Swiss non-profit is a multi-stakeholder organization with about 1200 members worldwide, and Ian’s professional base. There Ian handles marketing and event organization. Since the organization’s founding in 2017, people’s interest in cryptocurrencies has cooled after the initial craze, but the numbers of serious, committed business partners have only grown.

On the contrary, Ian said that at the Consensus conference in New York he attended in May 2019 didn’t have as many visitors as the previous year, however, people’s enthusiasm and commitment to blockchain technology seemed to have doubled. “Many see blockchain technology,” he said, “as a basis for the whole economy, and financial instruments.”

Despite the niche fervor, though, one of the factors holding blockchain projects back is a lack of broad knowledge. Without opening a wallet or acquiring a basic understanding of handling crypto assets, investing was too difficult for the average user. Thankfully, since then institutions understood blockchain’s potential and began to build systems to adapt to the new technology. In fact, Ian is optimistic about the future, he recalled people working very hard to bring things forward. Some strides we’re only now starting to see. This year’s Crypto Valley Conference together with Lucerne University of Applied Sciences organized the event bringing the world’s blockchain professionals together in one place.

Switzerland has positioned itself as a friendly place to set up and operate crypto businesses. Nevertheless, Simpson cautions that the Alpine nation can’t start a technological revolution alone. “It takes cooperation and collaboration among people and players all over the world, just like the technology itself,” Ian said. He also added that “Blockchain works because you have a network and because you leverage that network to create a distributed system.” While Switzerland can lead the world towards the digital future, the world has to follow suit.

Consider Switzerland as a base

For years, Switzerland defined itself as a business paradise and continues to attract entrepreneurs from all over the world. Is Switzerland’s future looking bright? Facebook’s recent Libra project — headquartered in Geneva — suggests that the only way for Switzerland is up. Switzerland is booming with potential and shows no signs of slowing. Do countries with flexible business regulations threaten Switzerland‘s strong market position? Not in Ian’s eyes. He says that setting companies in Malta or Gibraltar might be tempting, as these countries have been incredibly flexible in building new laws and frameworks for crypto and blockchain projects, but building a sustainable business should always be a number one goal. This is why in the eyes of investors and future clients, Switzerland is one of the best places for blockchain company headquarters.

While Simpson operates in Switzerland, he thinks there are other clusters of blockchain innovation. Central and Eastern Europe is one such region. He sees a lot of potential in people and their hunger to build and change things. According to Ian, Central and Eastern Europeans and Americans are similar in their disdain for silly regulations and bureacracy. “[There is this] ‘there might be limits, but we’ll find a way around them’ attitude, which is deeply embedded in people’s mentality.”

Believe in your why to find your how

Many business gurus say there is no golden formula for success and one-size-fits-all marketing strategies are nonsense. However, according to Simpson, there is one piece of advice that helps any business thrive. Ian’s recipe for success is simple. “When it comes to communication and marketing,” he said, “with the emerging technologies and innovation, the first thing you have to do is explain what it is and why it is needed. If you can’t do this, you can never sell anything to anybody. You can’t sell something that people don’t understand. The most important thing to establish a value proposition, and establish who is going to benefit from this. A product market fit is the most important thing!”

Make networking a priority

Have you ever skipped an important conference and thought it made no difference? Wrong! Networking helps to build trust and significantly increases your business reach. Ian’s advice is to attend business events and network as much as you can. By attending business events you are raising your own profile. He always tells his clients not to spend money on events that won’t raise their profile and trust level significantly. This year’s Crypto Valley Conference was a great opportunity to meet other visionaries, entrepreneurs, and business reps and build connections with the larger community.

Key takeaways

  1. Be open to feedback to adjust your product to market needs in the early stages
  2. Reach out to people, who have the problem you plan to solve and see if your product is actually a solution
  3. Always get to the people in the industry you are trying to disrupt or support (users, beta testers, etc.)
  4. Narrow your focus, and be very specific
  5. Be selective about markets you are going for
  6. Understand what worked and keep doing it
Categories
Blockchain Financial Services

What you need to know about ERC token standards

Making sense of the ERC token types and what they do can be a bit confusing. Different token standards enable different features. From representing ownership of an asset to making trading easier, tokens are an integral part of any decentralized application. The utility of the Ethereum protocol is that it allows developers to build dApps on top of the underlying blockchain.

Unlike Bitcoin, which primarily functions as a payment system On the other hand, Ethereum opens up other use cases for blockchain technology. Business cases so far have tended to focus on intangibles such as cryptocurrency, transferring medical records or tokenizing digital assets. However, tokens can also stand in for of physical assets, such as real estate and luxury goods, or power supply chain tracking platforms. Each type of digital token serves a slightly different function and understanding the difference between ERC token standards can help you decide which one is best for your blockchain project.

Tokenizing assets is one of the main value propositions of the Ethereum blockchain. Smart contracts need cryptographic tokens to function. Gas — paid in the form of ETH tokens fuels the transactions on the Ethereum network. While the two most common types are the ERC-20 and ERC-721, others are emerging with new features and improvements. In this post, I’ll look at the main types and examine the use cases as well as the pros and cons of each.

ERC-20

Among the most common and functional ERC token types is the ERC-20. These were very popular in ICO projects because they made it easier to create and distribute tokens directly to user wallets. Additionally, end-users can freely trade and use them within token economies.  Simple functions allow developers to limit the total supply — a key consideration in a tokenomics model and allow users to transfer tokens easily. Smart contracts verify user funds and approve the transactions before finally writing the transaction to the blockchain. Inside the system, the tokens are of equal value and users can exchange them freely for other tokens.

These fungible digital tokens enable platforms to issue tokens users need to access a service. Like a kilo of wheat or a barrel of oil, fungible tokens are worth the same as other tokens in the ecosystem. This equal value encourages token users to earn and spend freely. One example Espeo helped develop is the derivatives trading app CloseCross (pictured above) which issues tokens that allow users to place bets on derivatives contracts.

For a case study of the CloseCross project, read more here.

Users pay in a number of tokens to place a bet and receive tokens back when they win. This, of course, provides an incentive for end-users but also helps power the system as a whole. Because it’s a trading ecosystem, we decided to implement ERC-20 tokens in the tokenomics model. CloseCross wants users to win and spend their tokens to access a service and sustain the dApp, not hoard them away.

ERC-20 Pros:

  • Widely used token standard and supported by a majority of exchange and wallets
  • Supported by most exchanges and wallets
  • Good for trading applications where fungibility is important

ERC-20 Cons:

  • High gas costs
  • UX has led some to send coins to smart contracts instead of crypto wallets.
ERC token standards

ERC-721

One of the other common ERC token standards is the ERC-721. Unlike the ERC-20, ERC-721 tokens are non-fungible. In other words, each token has a different value in the system. While ERC-20 tokens are the same value and act as currency on the platform, ERC-721 tokens are not. The point of these is to create unique, rare or editioned assets. ERC-721 tokens allow developers to tokenize assets of different values. The most famous example is the Ethereum dApp CryptoKitties.

Each cryptographic piece of digital art had unique features which gave them value. Some features are more desirable than others. While CryptoKitties got its fair share of ridicule, it demonstrates some of the usefulness of blockchain and of asset tokenization. Digital artists, for example, can use ERC-721 tokens to protect their original work from unauthorized copies.  

With ERC-721 tokens artists are able to tokenize digital work — creating cryptographic scarcity and protecting its value. Several startups such as Maecenas and Artory are already tokenizing physical art to ease provenance studies and facilitate sales. Outside of the art world, other firms such as Streetwire are tokenizing real estate for similar benefits. Essentially, ERC-721 tokens facilitate the transfer of unique assets. Development in

ERC-721 Pros:

In one of our product design workshops for our client Luxtrack, we developed a tokenomics model incorporating the ERC-721 token on their anti-counterfeit luxury goods platform. The token allows users to seamlessly buy and sell second-hand luxury items and be confident that the items are not knock-offs. Luxtrack tokens provide a scalable way for the company to build trust and expand a market rife with abuse. ERC-721 tokens enable the company to reassure consumers that the products they buy are authentic.

  • Allow artist to edition their work
  • Non-fungible tokens enable platforms that rely on scarcity and value to trade
  • Represent ownership of investments rather than functional tokens

ERC 721 Cons:

  • Slow adoption
  • Tricky to get UI/UX right

ERC-223

While this one is not a fully supported digital token, this token type addresses several of the UX shortcomings of other ERC token standards. Many people have sent coins to the wrong wallet address or worse, to a smart contract, losing those coins forever. Though many crusty developers might say it’s end-users’ fault for sending tokens to the wrong address, it could limit broad adoption among the general public. These unfriendly design features might turn non-technical people away.   

In short, the proposed ERC-223 alerts users who accidentally send tokens to a smart contract address and cancels the transaction. Users still pay the gas cost but save their ETH. Amigocoin is one of the only projects currently using the ERC-223

ERC-223 Pros:

  • Proposes friendly UX features that protect users from loss of funds
  • Backward compatible with ERC-20 token standard
  • Half the gas cost of ERC-20 tokens

ERC-223 Cons:

  • Not widely accepted by the Ethereum community
  •  Incompatible with many wallets

ERC-777

Just as the ERC-227 offers bug fixes for the ERC-20 token standard, the ERC-777 digital token proposes still more ways to improve blockchain usability. This digital token adds several more functions to the popular ERC-20 token standard. One of the most innovative is the option to mint or burn tokens, which may be a necessary feature depending on a project’s tokenomics model.  Of all the ERC token types, this one may also make the transfer of tokens much simpler.

Of course, as with the other more obscure ERC token standards, few projects have actually decided to implement the protocol. However, Ethereum applications could benefit from better design and more user-friendly options.

ERC-777 Pros:

  • Proposes improved usability

ERC-777 Cons:

  • Not widely accepted

Conclusion

As more and more ERC token standards emerge, each one will roll out new features and bug fixes for the existing tokens. Choosing which digital token to use in your blockchain project is essential to ensure your platform delivers the most value to end-users. Whether you’re launching an STO or tokenizing medical records, getting the tokenomics right is a vital step to launch a successful product.