Paytomat and CoinLoan Have Made It Possible to Invest in Tokens Without Spending Cryptocurrency
The surge in popularity of the initial exchange offering model has had an extremely beneficial impact on the tokens issued by the cryptocurrency exchanges that either already host IEOs or have announced plans to do so in the future. Other exchange-issued tokens have reaped the benefits as well.
Coinloan and Paytomat want to become the first IEO offering the possibility of borrowing funds instead of spending investor’s crypto assets. Borrowers get money without selling cryptoassets. Investors offer loans and earn competitive returns. Overcollateralization ensures full repayment on time.
Investing in up-and-coming blockchain startups is now possible without selling your own cryptoassets. CoinLoan lending platform has announced a case on how to acquire tokens while HODLing due to the coming IEO token sale of Paytomat, a cryptocurrency payment solutions company.
The token acquisition model proposed by the Coinloan platform offers all the participants an option to borrow fiat funds instead of spending their own cryptoassets. Due to this, the investor remains insured against an unforeseen drop in token price, which often happens in the digital asset market. Such reinsurance may well restore investor confidence in token sales and revitalize the market.
The selected token distribution model – IEO or Initial Exchange Offering – is also more beneficial for the investor than the ICO. It speeds up the process of acquiring tokens and delegates a number of risks from the buyer to an exchange.
Unlike ICOs which assume listing of the token post factum, IEO allows participants to start trading immediately. While the ICO releases tokens when funding gets completed, the project running its IEO first generates the tokens and then sends them to the trading platform. The platform, in turn, becomes an additional factor of investor confidence. It cuts off scams by making its own research on risks, startup’s financial conditions and market position.
The main goal of the Coinloan and Paytomat cooperation is to become the first IEO offering the possibility of borrowing funds instead of spending investor’s crypto assets. If the investment does not justify itself or is below expectations, the user’s BTCs or ETHs remain intact.
“Let’s say you have 0.5 BTC currently traded for 2,000 USD,” suggests Alex Faliushin, Co-Founder and CEO at CoinLoan. “Selling it, you can buy 407500 PTI. Or borrow 1200 USD against this crypto to buy 244500 PTI. The second option doesn’t look convincing, but let us rather calculate.”
“In an optimistic scenario, when in one year both BTC and PTI doubled in price you still have 0.5 BTC worth 4000 USD now and 244500 PTI estimated at 2400 USD. It’s 6400 USD altogether, minus 1320 USD you’re to repay for a loan. Net profit is 5080 USD while selling your BTC you’ll gain 4000 USD only,”Alex Faliushin adds.
Every week we see more Security Token Offerings announced. Notably, the number of non-blockchain businesses who opt-in for STO is increasing. Be it independent musical promotor like StreetLife International,…
More and more companies are taking advantage of asset tokenization and raising funds through selling security tokens that represent a stake in their businesses. Security Token Offering, as opposed to the…