Telegram would change the cryptocurrency world
Private messaging app Telegram is planning to gatecrash the cryptocurrency world with a blockbuster ten-figure initial coin offering.
The company, which reaches more than 170 million monthly users, is looking to raise at least $1.2 billion from a token sale which would include a private sale set for February 2018 and public sale in March, as Business Insider reported.
Telegram expects to raise $600 million in both sales. At $1.2 billion, it would be the largest token sale ever, beating the $257 million raised by Filecoin, a network of decentralised cloud storage providers, in September last year.
The fundraising method, which is best thought of as a cryptocurrency twist on the initial public offering process in which companies issue their own token to investors in exchange for bitcoin or ether, took off in 2017 with seven companies raising more than $100 million last year. Analytics provider Autonomous NEXT estimates more than $4 billion have been raised via ICOs.
Telegram is best known for a messaging app, which the company claims in the documents is used for community communication in over 60 percent of ICO projects, but its own ICO is more extensive than monetizing that chat service.
Not only is the amount raised ambitious. The project aims to become the digital asset that will finally be adopted by the mainstream for payments, and it includes the construction of multi-blockchain architecture that can withstand transaction volumes and speed to compete with Visa and Mastercard, according to offering proposals.
“Someone like Telegram or WhatsApp is needed to bring crypto into the mainstream. Telegram already had the entire crypto audience,” said Iqbal Gandham, a managing director at trading platform eToro.
Investors in the private sale will receive tokens with a discount that exceeds 50 per cent of the initial public sale price. The private sale closes next month, while the public sale begins in March.
ICO participants would be investing in what’s known as a Simple Agreement for Future Tokens, or a contract that secures the right to receive tokens once they’re listed in cryptocurrency exchanges. Telegram expects its tokens, which will be called Grams, to be listed in January 2019, or end of 2019 at the latest, after which participants in at least the private sale will be refunded, according to the documents.
After the tokens are listed, investors in the private sale will have to hold on to their coins for a lock-up period of as long as 18 months.