BUYER BEWARE! DO NOT PURCHASE ANY EOS TOKENS UNTIL YOU READ THIS!!!!
So as you may know, there is a lot of hype and momentum building up around the EOS ICO that begins in 31 hours. You've read a few posts about what it is, and even how to purchase EOS Tokens during the ICO. But are you aware of what you would actually be purchasing if you participate in the ICO?
After reading through the through the EOS Purchase Agreement ( https://eos.io/purchase_agreement ), here are the reasons why you should be very careful about buying any EOS tokens:
- The price you will receive for your EOS Tokens depends on the TOTAL Ethereum received by ALL ICO participants!
- The EOS Tokens for sale will serve NO purpose at all !
2)The Tokens will NOT be transferable, 48 hours after the 1st of June 2018
1)Expanding on point one above, the price you will pay for EOS tokens will be calculated as per the following screen shot from the EOS FAQ's webpage:
In a nutshell, the price you will pay for EOS tokens will be calculated as follows: the Total EOS tokens available for that day/period, divided by the TOTAL Ethereum contributed by all participants, multiplied by the amount of Ethereum that you have paid during the ICO. From an ICO participants point of view, this bad because if there is a huge some of money allocated to the first few days, and then a drop off in interest from the markets after a week or two, the market price per token could drop dramatically.
2)Below is a screen shot of EOS's Purchase Agreement stating that EOS TOKENS WILL HAVE NO RIGHTS, USE OR ATTRIBUTES, SERVE NO PURPOSE , AND ARE NOT TOKENS OF THE EOS PLATFORM:
- Tokens will become NON transferable 48 hours after the last ICO issuance on the 1st of Jun 2018
This basically means that after the 30th of June, if you hold EOS Tokens in your private wallet, you won't be able to transfer them to anyone, or use them as a currency at all. And also, any EOS tokens on exchanges will remain on those exchanges, and will NOT be able to be transferred. which is the opposite of the definition of a currency. A currency is easily portable.
So to conclude, EOS tokens are NOT tokens of the EOS platform, they have NO value, NO rights, NO Attributes, serve NO purpose, will potentially be overpriced, and will NOT be transferable after the 1st of June 2018.
General Note: Beware of any ICO's that do not have a funding cap! (There are a lot of articles on the internet about this) The way the EOS ICO is designed, there will be a huge influx of money over the first few days/weeks, and then as the weeks and months roll on, there will be much less money going into each daily ICO being held. and therefore EOS tokens will become cheaper to buy at the end of the 341 day long ICO being held. Keep in mind that holding an ICO for 341 days consecutive days long is not in the best interest of ICO participants. EOS is doing this in order to exhaust the market of as much money possible. So what this means is that EOS tokens will potentially be priced very high initially due to speculative demand, and then will possibly drop off as time goes on, and the "hype train" loses momentum.
So if you do decide to participate, I hope you do very well for yourselves as at the end of the day, most of us are here not just to have fun, but also to make money.
Peace out everyone
Disclaimer: This is in no way investment advice, just my own point of view
Part of the confusion here is that the ICO is really distributing an ERC-20 "EOS" token on the Ethereum network, which is DIFFERENT from the actual tokens on the EOS network. These tokens will be exchanged, in a sense, for the actual EOS tokens. For example, when it says the tokens will not be tradeable after a certain date, it is talking about the ERC-20 EOS tokens on the ETH network, not the REAL EOS tokens, which do not even exist on the EOS network. This is one of the confusions of running the ICO on the ETH network, but it allows an auditable process.
But shouldn't the purchase agreement then mention that the ERC-20 tokens will give you the right to EOS tokens? I have only skimmed the terms so correct me if I'm wrong, but so far it seems like the ERC-20 tokens give you no rights at all.
Hey, sorry I can't be more help. I haven't read the terms in detail. The whole idea is that they are selling an ERC-20 "EOS" token on the Ethereum network, which is effectively just a placeholder. The distribution of those tokens will then be used to distribute the actual EOS tokens on the EOS network. That's why it is important to register your public key, because you will use a private key on the EOS network to claim the real EOS tokens. The placeholder tokens are basically useless, and trading will be frozen once the full ICO ends, so that the final state of token distributions on Ethereum can be used as a snapshot to generate the distribution of real tokens.
No because block.one won't perform that task, anyone can with our open source software.
In stocks, we have seen IPOs that start out with outrageously high valuations due to the pump and irrational exuberance of new investors. I think it is true that EOS is being designed as a platform with many new and improved features. I also believe EOS will achieve impressive valuation in the long term. However, it is ALSO true that the creators and promoters are fully aware of the marketplace and just how much they can sell this ICO for. I will be letting the dust settle on this one before looking to get in. Thanks for the article!
You simply have to trust Dan/block.one on this one. There is no other way.
Great thread. I was about to start a similair discussion. Buy low, sell high, it seems so simple but most investors still don't seem to get it :-) This is quite an interesting website I found: https://www.coincheckup.com Since I use this site I make so much less basic investment mistakes. For example: https://www.coincheckup.com/coins/Eos#analysis For a complete Eos Detailed report