TOKENIZATION - The Future of the Platform Business Model.
From NFTs, Web3 Domains to Crypto Tokens
Hello Web3 domain investors,
In this month’s short newsletter, we will share the latest premium HNS extension sale, and what we think about the .S/ acquisition.
We will also talk about the next alphabetic order and premium extension, which is .TOKEN.
Why we love it so much and believe it will become one of the most sought after Handshake blockchain extensions of all time.
Last week, during HandyCon 2022 the CEO of Namecheap, Richard Kirkendall was the mysterious bidder who secured the .S/ for a massive $750,000.
Congrats to both buyer and seller 💰💰💰.
If you have not already secured your .TOKEN Web3 blockchain domain, you will miss out on: The Future of the Platform Business Model.
Between myself and Doctor brand I believe that we own the most premium .TOKEN collection in the world. We will let you be the judge.
Platforms create value by connecting the participants in a marketplace, making it easy for them to transact and enabling them to innovate together. In the broader context of ever-increasing digitization this feature has led to the ongoing rise of the platform business model.
Why is Tokenization the future of VC, self funding NFT Projects and Web3 Projects?
According to Deloitte, they claim that Tokenization (and we agree 100%) is the future of the platform business model.
Sustainable growth through blockchain-based incentives.
Tokenization and the two types of network effect:
There are two types of network effects. Direct (same-side) network effects occur within one user group, such as the users of a messaging app. Indirect (cross-side) network effects occur between multiple groups of users, such as between taxi drivers and passengers on a ride-hailing network or sellers and buyers on an ecommerce platform. In platforms that leverage indirect network effects, there is usually a group of producers and a group of consumers who have been connected through the platform, allowing them to make transactions.
Tokenization has an exceptionally high potential for indirect network effects, which often face greater issues as they must maintain and coordinate the activities of two or more different userbases. In the direct context effect, the token would mostly be limited to a payment token. In the case of indirect network effects, tokenization can be used to incentivize producers to participate through collaborative value generation on the network.
Token sales and platform business fundraising strategies:
Initial Coin Offerings (ICOs) are the blockchain- industry equivalent to the Initial Public Offering. During an ICO, cryptocurrency or fiat money is exchanged for the tokens issued by the platform business. Unfortunately, this mechanism was misused to defraud unsophisticated investors and many projects illegally issued securities. Nevertheless, it was a breakthrough from a financial innovation perspective and legitimate tokenized platforms such as Ethereum and Chainlink also raised funds via ICO. A multitude of ICO variants such as Initial Security Offerings and Initial Exchange Offerings have also been developed.
In 2017, the top ICOs averaged $26.4m in early- stage funding, significantly more than the $11.4m raised by early-stage VC rounds, with 12.4% of tokens going to the developers. Average ICOs, however, only managed to scrape together $3.5m in funding while retaining 18% of tokens for their developers. A big difference between the two came from prior VC-backing. Over 30% of top ICOs had previously received seed capital, compared to only 9.5% of average ICOs and none of the failed ICOs. This suggests that platform models should use traditional methods of angel and seed capital in conjunction with tokenization strategies for the most effective fundraising and growth.
Tokenization is a revolutionary paradigm shift for platform business models.
A must read PDF: