OTN Foundation skips ICO and launches token

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* Price & chart conversion through BTC
 

Background

Today, the term Initial Coin Offering (or ICO) has become almost synonymous with “scam”. From institutional figures such as Jordan Belfort AKA “The Wolf of Wall Street” to hardcore Bitcoin maximalists like Saifedean Ammous, the industry opinion thinks the ICO route is a huge red flag.

The Open Trading Network which recently launched the OTN token is of the same opinion. OTN is backed by mainstream trading platform, IQ Option.

In brief, the OTN token is intended to serve as a utility token for the current IQ Option trading platform, as well as the future expansion towards a decentralized cryptocurrency exchange (DEX). Aware of the reputation that ICOs have gotten, the OTN team have chosen an alternate route to distribute their tokens. In fact, their homepage astutely acknowledges the multiple shortcomings that ICOs have been tagged with:

  • Lack of regulation and transparency

  • Lack of motivation to innovate and produce after funds have been gathered

  • Lack of expertise backing the project, failing to justify the huge sums raised.

In response, the OTN platform claims that they are already operational with 550+ professionals working on their trading platform, almost half being developers with main office in Cyprus (here is their contact us page for the full address) and another base in Russia. Additionally, the issues of network effect (or lack thereof when launching a new token) are mitigated by the fact that IQ Option boasts over 20,000,000 users.

Functionality

The most important question is: what function does the OTN token serve? The primary functions are three-fold: they can be used to pay up to 100% of IQ Option trading commissions, holding OTN tokens will generate returns through commission revenue and finally they can be used for the payment of transactions in the OTN network.

While these are the main functions currently, a quick look at the OTN roadmap shows plans to build an entire ecosystem around the network which are intended to increase the tokens functionality. Normally future promises should be met with well deserved skepticism, and rightly so. But, considering the OTN platform is not making any huge call to investment, interested parties are free to accrue tokens through trading on IQ Option, or to simply watch developments unfold with no fabricated FOMO pushing them to make hasty investments.

Distribution model

As opposed to an ICO, the Open Trading Network Foundation is trying something more akin to an airdropped token. Using an alternative example to begin, in the case of Byteball, users can link their BTC to the platform and are distributed byteball tokens at a rate of 1 billion “bytes” (1 GB) per 16 BTC, with an additional 0.1 GB per billion bytes linked.

In the case of the Open Trading Network, OTN tokens are airdropped, or “gifted” to users of the platform, from wallet users to token holders and finally IQ Option traders.

There will be a total of 100 million OTN tokens. It’s important to understand and consider the exact distribution when considering how to move forward. It is as follows:

  • 42 million to be gifted to users of the of the OTN platform (holders, traders and wallet users)

  • 28 million distributed amongst shareholders and IQ Option team members for building and funding development of the OTN platform

  • 30 million to remain with the OTN foundation for future distribution and to attract strategic partnerships (emphasis by the platform that these tokens are not to be sold)

Competitive landscape

For anyone interested in the nitty gritty details, the OTN platform’s whitepaper doesn’t shy away from acknowledging and doing a compare/contrast exercise to competitors. Examples considered include Waves, OmniseGo, Ethereum, and BitShares. Further details on their competitive landscape analysis can be read up on page 24, sub-section “13. Comparison with other projects”.

To highlight some interesting parts of this competitive analysis, the OTN team claim that they will make use of good solutions already applied in existing networks, citing Merkle Tree validation in the blockchain for all order matching operations as implemented by Ethereum founder Vitalik Buterin in the Plasma protocol.

Takeaway

OTN is currently trading on Cryptopia and Livecoin. Its price as well, as new trading venues, can be checked live via Coinmarketcap. Liquidity appears to be fairly low currently, so take the figures displayed with a grain of salt until the OTN platform is further along its development path.

Overall, the launch of the OTN token through a joint effort of the Open Trading Network Foundation and the IQ Option trading platform is another step towards mainstream adoption of bitcoin and cryptocurrencies as a whole. For anyone interested in learning more about the platform, business model and other in-depth details, you’re encouraged to check out their whitepaper. There is a plethora of information available, from the technical design of the OTN system to further details on why the team eschewed the ICO route.

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