Q: Which blockchain protocol are you using?
We are using the Ethereum blockchain.
Q: Why are you using Ethereum?
There are 3 primary reasons why we chose Ethereum.
- Continuous development of Ethereum - Every year, the Ethereum foundation hosts DevCon where the founders, engineers and supporters of Ethereum discuss the future developments and applications of the blockchain. In addition, the formation of the Ethereum alliance (composed of more than 200 member companies) are investing resources to solve real-world problems using the world's only smart-contract supporting blockchain.
- Liquidity - With a market capitalization of more than US $38B, Ethereum is the 2nd largest blockchain network in the world. More applications are being built in the blockchain, creating demand for Ether and liquidity to the network.
- Scalability - Ethereum founder Vitalik Buterin and his team are working on implementing "Casper" which aims to make transactions more efficient. Development is also underway to implement "Sharding" to allow Ethereum to handle more transactions per second (currently at 15).
Q: Are ICOs Legal?
ICOs fall within a grey area that is not specifically regulated or illegal in most jurisdictions. In the UK token emission does not fall under any regulated activity. There are legal risks with cryptocurrencies, whether utility or asset backed, as they can be determined after they are launched to be securities, or new regulation may retroactively impose new rules to this arena.
As companies have raised more money in 2017 by doing ICOs than by other traditional fund raising means, regulatory interested is bound to come with force in the near future.
Q: How do ICOs work?
ICOs is an event where a company generates and sells digital tokens in exchange to obtain capital from the public. The token represents a right of the holder, which can vary from access to a specific application or a set amount of monies. The amount raised in an ICO may vary as a target amount will be determined by the company issuing token.
Currently it takes us an average of 3 weeks to launch, including time to create token using our own code. We are spending development work to shorten this launch time to 1 to 2 weeks. The time varies depending on the customization needed for the pre-sale and sale smart contracts. However this timeframe does not include the time spent by the issuing company with PR, marketing and talking to pre-sale investors.
Q: What are the cost involved in an ICO?
There will be various costs associated to an ICO. Apart from the cost of issuing tokens, companies will need to put efforts into marketing, legal fees, ETH purchases and other related expenses.
CapchainX charges an upfront acceptance fee and commision which is a % of the amount raised during the token sale.
Q: What other services do you offer clients?
Currently, our main product is providing companies tools to launch their ICOs. We engage our customers in a personal level where we discuss with them their product, help pen their white paper and provide the technology solution.
We are currently working on developing a self-service platform for token creation and a digital wallet where our customers can store and trade their tokens.
Q: Why should I do an ICO through CapchainX?
We help companies issue CryptoEquity, a sustainable token which is fundamentally sound. Tokens are backed by either company shares or debt. Using this model, raising funds and transferring ownership are more cost-effective in real time.
We work with our clients throughout the whole process, from writing an excerpt in their white paper to creating tokens. In between, we check if the economic structure of the token is in place, and guiding our clients on how to back their tokens.
Q: How are CryptoEquity tokens redeemed? How are they enforced?
The token holder contacts the emitting company, who will then take the necessary steps for the token redemption. In addition to handing the token back to the emitting company, other steps may be necessary depending on the jurisdiction. However, a basic KYC should be expected.
The promise to exchange tokens is made and bound by the Laws of England and Wales, and therefore it can be enforced in those courts.
Who are your clients?
We work with legitimate companies at various stages of their lifecycle. Some of our previous clients and their testimonials can be seen at our home page.