Gems, the recently announced bitcoin-powered, decentralized social network, ended the invite-only portion of its public crowdsale today, raising roughly $111,000 over the two-week period.
The Gems presale is the first crowdsale to be held on Koinify, the decentralized application development platform that raised $1m from investors including IDG Capital Partners, Brock Pierce’s AngelList syndicate and zPark Ventures in September. As such, the crowdsale, which has now opened to the public, is being billed as one of the best supported effort by the bitcoin community to launch a viable crowdfunding platform.
In total, roughly 5 million Gems tokens (XGEM) were sold during the invite-only period at a rate of 17,250 XGEM per 1 BTC (about $0.02 cents per token at current market rates). The first presale period, which started on 21st November, was open to any buyer that signed up to receive notice via the Gems or Koinify website.
Gems tokens will be used to incentivize users to join the platform, enabling them to potentially profit from the increased use of the network as a whole.
Speaking to CoinDesk, Gems lead developer Daniel Peled and Koinify head of media Dario Mutabdzija sought to frame the launch as evidence of consumer satisfaction with the Koinify platform and interest in the Gems project.
“Over 10% of the tokens have already been sold and 700 new Koinify wallets have been opened, we are super excited.”
At press time, Gems had sold nearly 7 million XGEMs over the course of its entire presale, an amount worth roughly $152,000.
The strong early buyer support for the Gems platform is notable given the recent waning interest in initial coin offerings (ICOs) in the altcoin space, an event the cryptoequity community has tried to position as different from a token sale.
For example, the poker all-star backed gambling platform Breakout Gaming raised just $136,000 during the first month of its public sale of its unique altcoin, a factor it attributed to the current weak cryptocurrency investing climate.
Buyers on the fence
Despite the strong initial showing, Peled indicated that he expects buyer interest in the crowdsale to increase as it nears the end of the current “Early Bird” period that allows all buyers to receive invite-only prices on Gems tokens.
Peled cited buyer behavior observed during the crowdsale for crypto 2.0 platform Ethereum as evidence for this belief.
“If you look at Ethereum, 90% of the buys were at the last minute of the best price before it rose,” he said. “People want the best price possible, so a lot of people are getting their wallets ready and watching.”
Mutabdzija continued, adding:
“With crowdsales, there’s a bit of this psychological effect. One of the decisive factors for buyers is to see how many other people purchase and join.”
Koinify claims that an analysis of its transaction history revealed that 300 unique participants had so far taken part in the sale. Unique participants were defined as those who provided unique addresses when purchasing.
The Early Bird period of crowdsale is set to end at 8:00 BST on 3rd December. At this point, the price of Gems tokens will increase to 15,000 XGEM per 1 BTC.
Until then, both Koinify and Gems indicated their resolved to ensure the token sale is “smooth and transparent”.
Gems and Koinify noted that they have been working hard to manage both the technical and commercial sides of crowdsale process, with the Gems team even flying to San Francisco for the event.
Mutabdzija described the crowdsale as a “24-hour enterprise” that finds both teams putting in extra hours to ensure the buying process remains smooth. The Koinify website experienced some downtime during the first hours of the general sale, however, the team said these have since been corrected.
“We’re pretty satisfied with the performance so far. It is our first crowdsale, so we’re tweaking, fixing things, the usual procedures,” Mutabdzija said.
Notably, Peled indicated that Gems had so far received only one request about its lengthy terms and conditions, which require users to attest that they are authorized to purchase Gems tokens in their jurisdiction and that they are experts in cryptocurrency.
At least one prominent community member, dogecoin founder Jackson Palmer, took to Twitter to encourage buyers away from the sale.
Peled, in turn, defended the project and the steps it has taken to promote greater transparency.
“At Gems we have been very transparent with every stage of the project: being public with our identities, having an unmoderated Bitcoin Talk thread, an AMA on Reddit, podcast interviews, a Google hangout and more,” Peled said. “We want to build a community around Gems and the only way to do that is to be as open and honest with our users.”
A Google Hangout discussing the crowdsale will take place at 4:00 am BST today.
Images via Gems