A newly concluded token offering on Binance is bringing hope to proponents of the initial exchange offering (IEO) model that this method of issuing new coins and tokens to the market is still working as it used too – after an initial pump, the price is dropping.
At 2 AM UTC time on April 23, a new token by the name Cartesi (CTSI) – the latest IEO from Binance Launchpad was listed on the exchange. Today (13:27 UTC), CTSI trades at USD 0.058 and is down by 15% against USD and 18% against BTC. However, the price is still up almost 290%, compared to the issuing price of USD 0.015. The startup aimed to raise USD 1.5 million in its IEO, while Binance claims that all CTSI tokens were sold.
Cartesi is a layer-2 infrastructure, which aims to enable complex and intensive computations to run in a Linux environment, outside the blockchain, without compromising decentralization, according to Binance.
CTSI price chart:
Following the launch, some members of the crypto community took to Twitter to voice their concerns, with opinions clearly divided on whether the surge was natural or a result of price manipulation.
The new listing comes after IEOs saw a wave of popularity last year, with many new tokens coming into circulation in this way, handsomely rewarding early investors. However, in December 2019, BitMEX Research said that all 11 IEOs they looked into in their May report have seen significant declines in price since, despite BTC appreciating in value.
Despite the lack of enthusiasm from some users, however, Binance CEO Changpeng Zhao has taken the opposite approach, and continued to publicly defend this way of raising capital. Most recently at the BlockDown 2020 conference last week, the CEO said that he is “still very confident in the IEO market,” given that that blockchain technology for the first time in history has enabled projects and companies to raise money globally.