Trading Tip `The Wall´ – Drop Tokens That Suffer From Overtokenization

Trading Tip `The Wall´ - Drop Tokens That Suffer From Overtokenization

It’s said that 90% of all startups fail, and that we should expect nothing more from ICOs. But 10% success rate is still overly optimistic for ICOs, perhaps not for the reason you may think. You’re probably aware of examples of ICO “founders” who turned out to be a bunch of made up Linkedin-profiles. You’re probably also aware of the risks that comes with sending money to people on the Internet you never met, in an asset or token impossible to freeze.

Also read: Disappearing Premiums Signal Bearish Mid-Term Outlook

Drop The Tokens That Suffer From Overtokenization

You’re probably also aware of the industry-specific risks, apart from straight up scams, which include:

  1. ICOs violating securities laws
  2. ICOs using complicated legal structures in order to avoid violating securities laws and having it back-fire
  3. ICO fundraisers using Ethereum smart contracts and imploding (this actually happened to the Ethereum co-founder himself)

In this post, I’m going to discuss a much more daunting problem that very few seem to grasp; overtokenization.

Let’s be clear: ICOs as a concept is not at all a bad way to fund the development of a new cryptocurrency. However, the ICO space today is overwhelmed by projects that are not even cryptocurrencies. ICOs have moved from covering cryptocurrencies, to apps that use an existing cryptocurrency as its platform, to regular companies doing something cryptocurrency related, to regular companies doing nothing related to cryptocurrency at all. What many ICO investors seem to forget to ask is: why exactly do these projects need to have a “token”? Somewhere along the way, everything suddenly having a token became normal, and no one barely questions it anymore. This is going to cause a huge problem in the future, and I’m going to explain why.

There are very few cryptocurrency projects that legitimately necessitate a coin or a token from a technological perspective. The known examples that do are the following: actual cryptocurrencies (e.g. Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Monero), and certain protocols involving some kind of game-theoretical token usage (i.e. staking).


One of the few projects from the latter category I can come to think of is Augur. Augur isn’t a cryptocurrency, but a product that uses a cryptocurrency as platform. It’s a decentralized prediction market (currently in beta-stage), consisting of as a set of smart contracts on the Ethereum blockchain. In Augur, its REP token (an ERC20) is integral to the process of resolving bets. It provides Augur with a way to financially reward and punish the actions of honest and dishonest actors, and creates incentives for a specific category of users (REP holders) to be proactive on the platform.

Augur Project

Augur perhaps isn’t a project without flaws, but what we know is that it isn’t practical to try to create Augur without a token. The token is–from the ground up–integral to the functions of the platform. The token itself is also defensible as an investment: as the popularity of the platform increases, the more revenue will there be for REP holders to earn on fees from resolving bets. I would argue that these ingredients are pretty unique to Augur (and perhaps also similar projects like Gnosis). In fact, there are an extremely limited number of cases of non-cryptocurrencies where a token is both technologically necessary and useful as an investment.

But the allure of launching a project like Augur is tantalizing; you don’t have to plan to create a whole cryptocurrency to launch an ICO, you just need a product that somehow utilizes a token that in some manner economically motivates people to hold it. If you figure out that, then you can launch an ICO too.

Because of the insane amounts of money investors poured into ICOs, every entrepreneur in the industry has quickly decided that whatever project they’re working on should probably  involve some kind of token. Because not all projects are launching a new cryptocurrency, and they do not involve game-theory or staking that necessitates a token like Augur, most projects have settled with a model where a specific token is required to utilize its services.

Trading Tip `The Wall´ - Drop The Tokens That Suffer From Overtokenization

Golem plans to build a decentralized market for computing power.

A Token-Critical Perspective

This is where the industry is running into a problem. Instead of an ecosystem of services being built around cryptocurrencies, you will now have to first purchase a specific token in order to utilize those services. Whether its storage space for rent, processing power for rent or something else, you won’t be able to pay for those things directly in your favorite cryptocurrency, you’ll have to use the specific token they’ve restricted their service to accepting, in order to raise money from you in their token sale.

This restriction severely diminishes the utility of the service they are creating. In the Golem example, its participants will be forced to accept payment in GNT rather than bitcoin for instance. It’s very unlikely that GNT is going to be as liquid as bitcoin, and therefore it is much more likely that the value of GNT will fluctuate spectacularly in comparison, which isn’t very convenient for its users. Furthermore, some sort of micro-economy will have to evolve around the GNT token, that relies on GNT tokens to purchase services later resold to the market. That opens up a whole new attack surface of the service, where the entire platform could essentially be hijacked in a coordinated act of market manipulation. This is why absurd constructs such as Bancor have appeared, in order to solve this ridiculous problem.

This doesn’t necessarily mean that Golem and the likes of it will be useless; however, there’s a very real chance that something else eventually comes along and builds a platform where computer resources can be rented in the currency of its users choosing. Such a competing platform, without the friction of being restricted to a specific token, has a very big edge on its ICO-launched competitor. In the end, while it may be true that an ICO could be the thing that gets a project off the ground that wouldn’t have otherwise, it may also be the thing that kills it.

My trading tip this week is to go through your portfolio and evaluate your investments from a token-critical perspective. Get rid of those tokens that add no benefit to the product or service they are providing, and in many cases are a down-right handicap.

What are your thoughts on market manipulation? Let us know in the comment section below!

Images via Shutterstock, Twitter.

Disclaimer: Bitcoin price articles and markets updates are intended for informational purposes only and should not to be considered as trading advice. Neither nor the author is responsible for any losses or gains, as the ultimate decision to conduct a trade is made by the reader. Always remember that only those in possession of the private keys are in control of the “money.”

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PR: World Blockchain Forum Brings Global Blockchain Elite to Dubai

World Blockchain Forum Dubai

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. does not endorse nor support this product/service. is not responsible for or liable for any content, accuracy or quality within the press release.

Dubai, UAE

Following the historic response to sister event The North American Bitcoin Conference, held in Miami earlier this year, Keynote has released details of their World Blockchain Forum in Dubai, 16th and 17th April.

Known as a global centre for innovation and investment opportunity, Dubai provides an inspirational backdrop for the 3rd annual World Blockchain Forum. Visionary leaders, economic pioneers and enterprising investors from around the world will come together for one of the most exclusive events on the global blockchain calendar.

As the longest-running crypto-technology conference in Dubai, WBF will delve into the innovative possibilities of blockchain technology, the impact of cryptocurrencies on global financial markets and the shifting landscape of ICOs.

With more than 500 Bitcoin and blockchain innovators and investors expected to attend, WBF – Dubai builds on the success of similar events in London, Los Angeles and Chicago as part of the World Blockchain Forum. The two-day event focuses on the future of finance and investment, successful past and future ICOs, regulation & governance, and considers how decentralization continues to disrupt the banking sector.

“We are thrilled to host another meeting of brilliant minds in the heart of the UAE and look forward to welcoming leaders of the crypto community from around the globe. Since 2015 we have been committed to bringing more companies and dedicating more resources to the UAE, to bring His Highness Sheikh Hamdan’s blockchain strategy and vision to life,” said Moe Levin, Founder and CEO of Keynote.

World Blockchain Forum Program Details
Held at the stunning Madinat Jumeirah overlooking the Gulf, this year’s internationally-acclaimed event speakers look at the ways in which vanguards, executives, and entrepreneurs can innovate the future of a new world economy.

Past WBF Speakers include:
Vitalik Buterin – Co-founder, Ethereum
H.E. DR. Aisha Bin Bishr – Director General at Smart Dubai
Patrick Byrne – CEO, Overstock & t0
Star Xu, CEO – OKCoin
Roger Ver – CEO,
Eva Kaili – Greece, Member of European Parliament
Charlie Shrem – Bitcoin Pioneer
Gabriel Abed – Founder, Bitt
Ola Oudin – CEO, BitOasis
Gabriel Kurman – Co-founder, RSK Labs
Ryan Taylor- CEO, Dash Core
Jason King – Co-founder, Academy
Moe Levin – Founder, Keynote
Ruslan Gavrilyuk – Co-founder,

For a full list of speakers visit:
Tickets can be purchased at:

About Keynote
Keynote was launched in 2012 by blockchain strategist Moe Levin. For further information and details about Keynote and the WBF – Dubai event, visit

For media inquiries, please contact Amandah Hendricks, Keynote’s Chief of Communications at

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This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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Switzerland Lays out Guidelines in Support of ICOs

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Switzerland’s financial watchdog, the Swiss Financial Market Supervisory Authority (FINMA), recently published initial coin offering (ICO) guidelines that reveal the regulator will oversee the fundraisers and regulate them either under anti-money laundering laws, and as securities. The guidelines show FINMA is looking to clarify how token issuers should proceed in the country, as the regulator

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PR: ITT – Here to Discover, Decipher and Deliver Actionable Crypto Trading Alerts for All

ITT - Crypto Trading Alerts

This is a paid press release, which contains forward looking statements, and should be treated as advertising or promotional material. does not endorse nor support this product/service. is not responsible for or liable for any content, accuracy or quality within the press release.

Introducing Intelligent Trading Technologies (ITT), an innovative platform created to assist crypto enthusiasts of all skill levels navigate the alluring yet perilous waters of the crypto world. Access to a large volume of high quality information is essential to the maintenance of a “winning edge” in every market, but the lack of any semblance of “safety net” coupled with the bizarre world of multiple exchanges, arbitrage, ICOs, forks, airdrops, and with the transient nature of the sector as a whole, amplifies that need acutely. This leads to a paradox in which information is desperately needed but any attempt to find such information results in a deluge of information the filtering of which is impossible for all but the most brilliant of traders. Barring those savants, most traders quickly reach a point at which they can no longer process the torrent of data presented to them and therefore cannot make informed, fully rational, decisions. The ITT platform is poised to become the calm in the center of the storm, a beacon of knowledge and confidence for anyone overwhelmed by the sheer enormity of the crypto markets and their associated information (i.e. everyone).

Investing in cryptocurrency is not a decision one should make lightly. The promise of easy money can blind a person to the very real, and statistically larger, potential to lose money. A lot of money. The pull between the reward and the risk, the fear of missing out on a bull run and the fear of failing to recognize the signs of a bear sell off, the excitement for the promise of distributed ledger technology/directed acyclic graph technology and the fear of glitchy code that can erase millions of dollars in the blink of an eye, coupled with the lack of information or fear of misinformation is enough to keep people on the sidelines and can paralyze even the most seasoned veteran. Fundamentally there is an unparseable mass of conflicting information and the risk of the known unknowns and the unknown unknowns is a risk shared by everyone. Until now. By pairing traditional trading concepts with cutting edge pattern recognition, the ITT platform is able to continuously scan, examine, and interpret information from the crypto markets, taking a firehose of information and turning it into a manageable data set , giving traders as close to a perfect execution strategy to optimize successful trading.

The Inspiration for Intelligent Trading Technologies
Intelligent Trading Technologies was inspired by the needs of its creators. More than a year ago, they began to actively trade in the cryptocurrency markets. They were quickly overwhelmed. Crypto was nothing like they had experienced before and they found themselves spending far more time attempting to isolate the signal from the noise in the crypto markets than they had in any other market they traded in before. The fact that at least one new crypto seemed to pop up each day, the formation of which resulted in numerous loud opinions, many from influential market participants, touting the new currency’s benefits or viciously pointing out its faults didn’t help matters.

Creating the ITT platform was simply their solution to their own struggles and frustrations that stemmed from the ever-expanding cryptocurrency market and their desire to trade in it; but, as is usually the case, necessity became the mother of invention, and they soon realized that the ITT platform was a useful service that could aid cryptocurrency traders across the globe.

“Intelligent trading requires a perfect union between man and machine. Our algorithms run millions of computations per second to deliver only concise and actionable alerts to you.” – Tom Counsell, Head of Engineering and Innovation.

The People Making Intelligent Trading Technologies a Reality
The ITT team is comprised of professionals in artificial intelligence, asset management, capital markets, trading, algorithmic trading, quantitative finance, securities law, and software development. ITT strives to maintain a lead over any competitors by staying up to date with the latest technological advancements in the mechanics of trading, the underlying theories of technical analysis, and progress in the field of AI, and attempts to integrate any such advances into its platform. That being said, Intelligent Trading Technologies do not shy away from forming mutually beneficial partnerships with established companies in the industry if the partnership can enhance or benefit the ITT platform in meaningful ways. This kind of collaboration allows Intelligent Trading Technologies to optimize the ITT platform for its users. In other words, when it comes to improving the platform, the ITT team doesn’t let ego gum up the works. Perfection is the goal, and they are committed pursuing that goal no matter what.

How Intelligent Trading Technologies Can Help Individuals Trade More Effectively
In theory, creating trading alerts seems like an easy task. One simply employs a few savvy traders to analyze existing data and use whatever conclusions said traders have arrived at to determine the perfect time to buy the right cryptocurrency. Unfortunately paying traders with the requisite skill set for such work is cost prohibitive for anyone other than institutions. At the same time, even the most experienced trader at the most elite hedge fund would likely falter when first introduced to the crypto space. Bitcoin has existed for less than a decade, and how many “elite traders” even knew that there were cryptocurrencies other than Bitcoin until at the earliest two years ago? The industry didn’t really explode until 2016. which means that the majority of people actively trading have less than three years experience in cryptocurrency. It is safe to say that what is an easy task in theory is nearly impossible in an industry as new, as big, and as volatile as cryptocurrency is, at least when you rely on humans alone. These are the reasons that the ITT Team has spent countless hours and hundreds of thousands of dollars perfecting trading techniques and developing an AI to isolate the signal from the background noise. The combination of AI and market trading algorithms is the only truly effective way to manage a market as complex as this one.

A Tangible Example of what the ITT Platform Can Do
Inexperienced traders may do their homework and discover a cryptocurrency of a company whose tech they like but they probably haven’t considered that buying crypto isn’t as easy as buying a stock on the NYSE, they have to find the right exchange to purchase said crypto–which may necessitate a transfer into one or more different currencies–until they can even place a trade for the crypto they wanted to buy in the first place. It is highly likely that the distraction of joining new exchanges, trading into intermediary currencies, and waiting for block confirmation of currency transfers will keep such traders from properly accounting for currency risk, the local time in which such an exchange (or even the target company) itself is located in, or the proper route to use to get profits made, if any, back to their native fiat currency. They are simply not going to know the perfect time to make the purchase. Obviously this is highly inefficient, not to mention frustrating, and leads to emotional trading decisions instead of logical and rational ones. ITT’s platform helps individuals trade better by indicating the ideal entry points for a given Crypto, and can help them to time and execute entries and exits. This way they will be able to make sound investment decisions based on analytical reasoning instead of emotional reactions.

Experienced investors benefit as well because they will instantly understand the efficiency of the ITT platform as it decreases the amount of time that they must spend observing various markets, calculating execution times, conversion routes and block confirmations each day, freeing them up to look for new targets. The ITT platform is more than just a simple trading assistant; it’s a means to encourage success in the cryptocurrency markets.

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About Intelligent Trading Technologies:

Intelligent Trading Technologies (ITT) is developing an artificial intelligence-powered trading assistant for the cryptocurrency markets. ITT’s Platform pairs traditional market trading concepts with today’s cutting-edge pattern recognition and machine learning capabilities. These technologies allow the software to continuously scan, analyze, and interpret the massive amount of information available, delivering game-changing trading ideas to you to execute

If you’d like to get in touch with ITT, you can do so on any of the following channels:

• Facebook:
• Twitter:
• Github:
• Reddit:
• Telegram:
• Youtube:

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The information provided herein does not constitute investment advice, financial advice, trading advice or any other sort of advice and you should not treat any of the content as such. ITT does not recommend that any cryptocurrency should be bought, sold or held by you and nothing in this article should be taken as an offer to buy, sell, or hold any cryptocurrency. Do conduct your own due diligence and consult your financial advisor before making any investment decision

Contact Email Address
Supporting Link

This is a paid press release. Readers should do their own due diligence before taking any actions related to the promoted company or any of its affiliates or services. is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in the press release.

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