Exclusive: Why IEO is More Sustainable for Crypto Exchanges?
Exclusive interview with Ricky Ng, CEO of Bitsdaq
IEO has been a heated topic among crypto exchanges in 1H 2019. However, is IEO sustainable?
We are pleasured to speak with Ricky Ng, CEO of Bitsdaq to share with us why he thinks IEO is the future of crypto exchanges. Ricky also commented on the latest STO regulation by the HKSFC and the future of decentralized exchanges!
How Bitsdaq is founded?
In Ricky’s blockchain journey, Ricky first founded IHT and launched the I-House token in facilitating the tokenization of the real estate market. During the listing process of I-House token, Ricky realized that Asia has a very huge market potential for crypto exchanges. He then decided to make heavy investments in building the technology team and started the exchange business: Bitsdaq in Jan 2019. Ricky believed that the cooperation with Bittrex provided a massive boost to Bitsdaq in terms of backend technology such as security and book matching. In return, Bitsdaq becomes the official partner of Bittrex in Singapore, Macau and Canada.
Can you share with us the current state of Bitsdaq?
We are rapidly growing since our establishment. Over the past 4 months, we have over 2 mn registered users and over 100,000 community members on Telegram! According to Similarweb, our web traffic ranked 3rd (second only to Binance and Coinbase) among global crypto exchanges, with a total of 11.4 mn monthly visits. We just launched our BQQQ token for IEO and Bitsdaq Launchpad currently receives over hundreds of IEO applications!
What is your view on Initial Exchange Offering (IEO)? Do you think IEO is a sustainable fundraising model compared to STO?
The key element to an IEO is to partner with an exchange, or multiple exchanges, to function as the distributor of tokens. Project developers mint the tokens and conduct the sales directly through the exchange, which then sells the tokens to individual contributors for the corresponding pair. While STOs are now viewed as the more regulatory-friendly way to sell tokens, STOs are branded explicitly as securities, with various SEC-sanctified registration exemptions. In practice, STOs are almost always restricted to accredited investors.
Bitsdaq has recently completed a $5 million private sale IEO of its platform token, BQQQ. Bitsdaq has also created labs to cultivate startups. Bitsdaq approaches an IEO not just as a fundraising model, but as a way to build a vibrant blockchain ecosystem. Our new platform, Bitsdaq Launchpad, will offer a complete suite of services for digital asset projects like business model assistance, marketing and promotion, and providing encryption tokens for blockchain startup teams. Projects can be listed directly on Bitsdaq Launchpad, allowing them to circumvent the ICO process while improving international market visibility and transaction liquidity of high-quality projects. Bitsdaq's team is committed to building a better digital asset ecosystem for project parties and users.
We know that Bitsdaq has been actively launching IEOs. What is the vision and mission of Bitsdaq IEO Platform?
Bitsdaq officially launched the IEO Launchpad in April this year to promote the development and accelerate the adoption of quality project by providing efficient listing processes, innovative trading models and customized project services. We're committed to building a world-class Asian blockchain asset trading platform by providing global investors with a safe, convenient, professional, and honest trading environment. Bitsdaq has been exploring to redefine the user experience of IEO. BQQQ is the first project on the line, and Bitsdaq will then provide IEO services to more blockchain startups. Our vision is to be a pioneer in the new era of blockchain industry through the establishment of a sound IEO platform, and strive to become a global mainstream IEO provider.
We know that Bitsdaq is going to launch the first project BQQQ on IEO Platform on June 9th, what is the market potential of BQQQ?
It’s been great for us so far and we see a lot of market potential there. The launch of BQQQ in Bitsdaq Launchpad marks the beginning of the three main utility; Namely value-added services, BQQQ trading pair and IEO platform services. The essential value-added services include transaction fee discounts, exclusive access to third-party airdrop tokens that launches on Bitsdaq, priority subscription rights for Bitsdaq Launchpad Projects, Bitsdaq ICO Project subscription participation rights, professional industry research report reserved for Bitsdaq VIP, and chance to participate in BITSDAQ offline community activities. As stated in the white paper, BQQQ will become one of the vital cryptocurrencies for IEO and ICO of small and medium-sized blockchain startups funded by or to listed on Bitsdaq, which could further enhance the liquidity and utility rate of BQQQ in the Bitsdaq ecosystem. Currently more than 2 mn active wallet addressed hold the candy token of BQQQ: BXBC.
It is worth noting that we have launched the buyback-and-burn mechanism for BQQQ on 12 June. This is essential in building our ecosystem because holders of BQQQ can enjoy discounted trading fees and other privileges stated in our whitepaper. They can also participate in our ecosystem such as consensus decision making and investments etc.
We will buy back BQQQ with 20% of its quarterly profit until the total supply is 1 billion. We will also publish the buyback record as soon as it is done. The BQQQ buyback can be verified through the blockchain explorer. We also launched the trading reward campaign of BQQQ on 15 June.
What do you think about the latest STO regulation by the HKSFC? How Bitsdaq is going to adopt this new regulation?
We see regulation as incredibly beneficial to the cryptocurrency space and welcome the latest STO regulation by the HKSFC. We think that giving more guidance around STOs for virtual asset managers, fund distributors, and platform operators will create a less volatile investing atmosphere and help bring more institutional investors into the space. We plan on fully adhering to the new regulations.
The Quadriga CX scandal at the beginning of 2019 dampened public confidence in crypto exchanges. What have you learnt from this incident? How important is the role of a custodian solution to the exchange participants?
The Quadriga CX incident was unfortunate and detrimental to the whole industry. It’s the exchanges' roles to act as stewards of their users’ trust and every time an incident like this occurs, it’s bad for everyone. Cryptocurrency is supposed to be a more secure decentralized alternative for people, so insecure exchanges are an institutional problem. I don’t think these kinds of scandals will ever fully stop people from trading crypto, but it is a sobering reminder for users to do their due diligence when deciding what exchanges they want to use.
What do you think of decentralized exchanges? Do you think centralized and decentralized exchanges can co-exist instead of mutually exclusive in future?
I think there’s room for both kinds of exchanges. One of the beauties of a young market like this is there’s room to take many different paths to achieve similar goals. This also gives users more options to decide which kind of exchange they prefer. I do believe we’ll see more consolidation of exchanges in the future, but I don’t believe that centralized and decentralized exchanges are mutually exclusive.
Credits to Susan Wu for her support of the interview.