Cosmos's story: How to "turn" $17 million into $104 million

This article comes from finance.yahoo, the original author: Leigh Cuen

Odaily Planet Daily Translator: Moni

Source: Planet Daily

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In April 2017, The Interchain Foundation (ICF) successfully raised $17 million in funding to advance the Cosmos network and facilitate dialogue between different blockchains.

After selling the ATOM token, The Interchain Foundation began funding a series of cross-chain development projects, such as Agoric Systems Operating Company (ICF invested in traditional equity) and Tendermint, which they hope will drive the block in this way. The Inter-Chain Communication (IBC) protocol has grown rapidly.

In fact, The Interchain Foundation's goal is very clear, they are to prepare for the future of cross-chain, and for cross-chain technology, Agoric CEO Dean Tribble vividly explained:

“I can sign a contract on one chain and then sell the asset on another chain or sell it to another private consortium on a stack on another platform.”

However, today, cross-chain technology is still not mature enough, but ATOM token sales are in full swing, and investors have also received good returns. Ethan "Bucky" Buchman, Technical Director of The Interchain Foundation, revealed:

“We launched a hedging strategy to hold about half of the cryptocurrency in legal currency. But it takes a long time to complete the liquidation, maybe a year or two, so the appreciation of the token may be very large. Now, in our bank account, the amount of deposits has exceeded the size of the initial $17 million in funding."

From the case of The Interchain Foundation, it seems to illustrate an unknown fact in the 2017 ICO boom, that is, a blockchain with a conservative fund management strategy compared to blockchain companies that seek rapid growth through marketing. The company's performance and sustainability will be better.

Jae Kwon, founder of Tendermint and current chairman of The Interchain Foundation, revealed that ATOM tokens were actually issued after ICO financing, so they are not typical start-up tokens. Although they later issued a large number of documents warning ICO participants could not guarantee that the tokens were received on time, in the end, their tokens were allocated to the project fundraiser as planned.

Arianne Flemming, another head of The Interchain Foundation, revealed that they still hold more than 1,400 BTCs, 50,000 ETHs and 20,000 ATOM tokens. Based on current market prices, the total value exceeds $104 million. Arianne Flemming bluntly stated that even though they invested $25 million in more than 50 blockchain projects as a non-profit organization, the funds in the “pocket” were still adequate.

Want to develop a governance, the foundation must first be laid

Agoric CEO Dean Tribble, who worked at Microsoft, believes that if mainstream developers can more easily write smart contracts using JavaScript, it will promote the popularization of blockchain technology. If Cosmos really wants to be a "highway" that links different stakes blockchains, you must deploy a common development language, which may require them to use a Wrapped Token developed by the Cross-Chain Working Group to support bitcoin-based placeholders (placeholders) ).

According to Dean Tribble and Ethan "Bucky" Buchman, The Interchain Foundation's ATOM token is not a capital, just a token for participating in the Cosmos system. Ethan “ Bucky” Buchman further explained that ATOM is only a participatory tool to motivate Cosmos network governance. The Cosmos network hopes to achieve cross-chain interoperability by 2020. It is currently in beta, but the only function that the network can now do is Distribute ATOM tokens to participants and trade within their network.

According to Zaki Manian, director of research at Tendermint, Tendermint currently holds about 8% of ATOM tokens, but they are not under pressure from Cosmos and are not forced to use specific software development clients. Zaki Manian said:

"The software we've created keeps the Cosmos network in a good position, as it did at the beginning. But whether they will continue to use the software we developed, or the software that others have developed, depends entirely on the network itself."

Zaki Manian said that if the Cosmos network does not use their software, they may seek other software development contracts in the near future. He added:

“I think there are many viable businesses in the Cosmos network, but Tendermint can't support all of these businesses. I think there are some drawbacks to the Zcash solution. They combine the Electric Coin Company brand with open source technology too tightly, you will be in the agreement. I see a lot of things associated with the Zcash brand. So for other companies, it doesn't give them the chance to own this kind of thing."

The “laissez-faire” approach adopted by the Cosmos network seems to be working. At this stage, nearly 30 network certifiers regularly participate in the network upgrade voting, which is much higher than the Maker Foundation's governance system, which has similar voting numbers to Cosmos, but its contract The number of employees is more than twice that of regular users, while the number of regular users is more.

Don't spend money on marketing, but spend on project investment

In addition to its good performance in fund management, The Interchain Foundation has done a great job in investing in transactions.

Most notably, The Interchain Foundation did not spend money on marketing, but instead chose to invest in encryption projects. At present, ATOM tokens have been listed on mainstream cryptocurrency exchanges such as Binance, but both parties have denied “spending money” on the currency. On the contrary, Binance has applied to become the certifier of the network in order to show his support for Cosmos.

Not only that, The Interchain Foundation also provided financial support to researchers at the University of Lugano and the University of California at Berkeley, and invested in three cross-chain development startups such as IRISnet, as well as a donation to the public policy non-profit organization Coin Center.

Basically, through the “layout” of The Interchain Foundation, the connections between like-minded companies in many cross-chain sectors have been further consolidated, and well-known experts who have contributed to Cosmos in many industries have also been motivated. In addition, part of the funding of The Interchain Foundation is spent on the bonuses and legal fees of the hackathon.

Ethan " Bucky" Buchman, Technical Director of The Interchain Foundation, said:

“We received information from regulators in several different jurisdictions and received requests for information disclosure. We are now actively responding to regulators. So far, we seem to be very good with regulation.”

What are your expectations in the future?

In fact, The Interchain Foundation and many cross-chain development projects have been in cooperation for many years.

Regardless of whether Cosmos was first able to be applied to real-world use cases, the network underscores the advantages of separating business models from specific cryptocurrencies.

Founded in 2014, Tendermint is a long-established cross-chain technology development company with a $9 million venture capital investment in 2019. The company's survival does not depend on the price of ATOM tokens, and The Interchain Foundation also does not use ATOM tokens as a long-term source of income.

There are also a number of active participants in the Cosmso network, such as Binance, node infrastructure provider Blockdaemon, Polychain Labs, and Libra Association member Bison Trails, as well as dozens of blockchain industry stakeholders who are not dependent on ATOM generation. The currency does not fully use the ATOM token as its only business model.

Ethan " Bucky" Buchman finally said:

“We are exploring more direct, sustainable profitable solutions… There may be other revenue-generating activities in the future, but not directly within the foundation. The Cosmos network has adopted a very strict policy and will not participate in the exchange. currency."

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