After raising $1.5 million in a pre-sale last month, blockchain-based online marketplace CanYa officially launched its initial coin offering on Sunday night, raising more than $710,000 in 24 hours with more funding rolling in every minute.
The startup was founded in 2015 with the aim of facilitating an easier way to spend cryptocurrencies such as Bitcoin and Ethereum, and today hosts over 4000 service providers for things such as gardening, childcare, moving, and others. The service has over 8000 users across Australia and has ambitions of rolling out the offering overseas.
Speaking to StartupSmart, CanYa co-founder John-Paul Thorbjornsen says the days leading up to the ICO launch have been crazy, with the team preparing for six weeks with various advisers and marketing campaigns before finally hitting the go button.
“We’ve had a flurry of activity so far, and we’re moving along nicely and we’re on track to hit all our targets,” Thorbjornsen says.
Get business news first
Sign up to SmartCompany’s daily newsletter
The new funding method also offers significant transparency for punters interested in getting involved, or just curious about the amounts raised. Using a blockchain explorer such as Etherscan, users can actually see the funds being raised in real time.
At the time of publication, CanYa’s contract wallet contains 1,177 ether, valued at approximately $732,000. By selecting the internal transactions tab on this link, all the contributions from investors can be seen.
While some coin offerings implement “soft caps”, or minimums for the amount raised, CanYa’s ICO does not have a soft cap due to the product already existing in the market, and the team using the money for expansion rather than to develop a product from scratch.
The project does have a “hard cap”, or maximum amount raised, which sits at 29,333 ether, or around $18 million. Thorbjornsen says it’s “too early to tell” if the ICO will reach its hard cap, believing it’s entirely dependent on the overall sentiment of the market.
“Sentiments for cryptocurrency investment ride with the wave of Bitcoin and Ethereum prices. Right now the market is bullish, so it unlocks a lot of people’s liquidity,” he says.
“If it keeps going bullish I expect a healthy amount of contributors, but if it becomes bearish it could lock up.”
Currently, one Bitcoin is worth approximately $12,700, and one ether is worth around $630.
Some recent doubt has been cast on the future of ICOs as a funding method and cryptocurrencies in general, with a panel of Australian VCs questioning if the current companies offering blockchain solutions need to be blockchain-based in the first place.
JP Morgan’s chief executive Jamie Dimon previously called Bitcoin a “fraud”, and recently, a former US Securities and Exchange Commission regulator labelled the funding method as “the most pervasive, open and notorious violation of federal securities laws since the Code of Hammurabi”.
Currently, CanYa’s CAN tokens are not available for trading on secondary markets, and will not be until the ICO finishes. The team is looking to discourage an immediate sell-off of the token — which is commonly seen from ICO speculators — by introducing an incentive for users who don’t remove their tokens from their digital wallets.
Called the “HODL club” — based on a misspelling of the word “hold” from an early-days Bitcoin forum since immortalised in meme form — users with over 5000 CAN tokens will receive additional tokens periodically for free, provided they don’t move them from the genesis address.
“Unfortunately there’s a lot of speculative movement from people who get into ICOs just to exit when it hits secondary markets,” Thorbjornsen says.
“We want to build a strong community, and give people benefits for being long-term believers in CanYa. This model’s never been done before so we’re finding our feet, but it’s gotten some incredible reception.”
The founder also believes Australia will see a number of strong ICO offerings in 2018, which will be based on companies with real products and already existing user bases, claiming that a number of projects this year received funding off “nothing but a whitepaper”, leaving a number of users “disappointed”.