A new cryptocurrency trading platform launched by former Telegram director of special projects Anton Rosenberg seeks to help blockchain startups stabilize their token prices.
Mikado, a crypto derivatives trading platform, will provide a solution for projects planning an initial coin offering (ICO) but which want to avoid the price collapse that occur when an open sale begins and early investors drop their tokens, Rosenberg announced Tuesday. He told CoinDesk that "many companies who are doing ICOs are trying to get investors' attention by big bonuses and discounts without a understanding how it will affect the price after the ICO."
Unlike traditional financial markets where underwriters and market makers are helping companies to structure their IPOs, ICO markets don't have institutions and mechanisms to plan a gradual release of liquid tokens, so Mikado will do this job instead, Rosenberg said.
Mikado is going to issue a derivative for any tokens that are locked up, such as bonus tokens for early investors or tokens that are distributed among the project's employees to stimulate their work. The project can transfer these locked tokens to a specially created escrow account, and investors will receive derivative Mikado tokens (MKT) instead which can be sold. After the lock-up period is over, the MKT tokens will be burnt and their holders will receive equivalent amounts of the original tokens they invested in.
"Locking up coins is a convenient tool, but not very efficient," Rosenberg said. "They can plan several lock-up periods, gradually release their tokens and control the trading volume. Mikado is promising a tool to create a "stable commodity-based economy" on the crypto market.
Mikado does not plan to launch a public initial coin offering for its own token, in order to avoid having MKT classified as a security, said chief executive Andrey Nayman. That being said, the firm intends to conduct a closed token sale. Right now the project is applying for a distributed ledger technology (DLT) license in Gibraltar. After, the company plans to register with the U.S. Securities and Exchange Commission.
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