2023: The Year Crypto Erases ICO Boom's Blemishes

• Perceptions of Crypto and the Rise of Initial Coin Offerings
• A Brief History of ICOs
• The Transformation of Digital Assets
• Tokenization and Its Impact on Crypto Perception
• Democratization of Access
• The Next Major Step

Perceptions of Crypto and the Rise of Initial Coin Offerings

The introduction of Initial Coin Offerings (ICOs) in 2017 led to a considerable number of people associating crypto with scams due to the prevalence of dubious projects during this period. However, it is anticipated that the coming years will bring about significant changes in the perception of the crypto industry. Ryan Gorman, the founder of RGPR, a Web3 consultancy and the head of strategy at Uranium3o, talked about the past and the future of crypto.

A Brief History of ICOs

During the ICO boom, there was an abundance of project founders who made dishonest claims about their partnerships, intentions, products, and some turned out to be scams from the get-go. There are even instances of an exchange founder allegedly faking his death to escape with millions in stolen crypto. This period was like the Wild West, leading to fair criticisms. Born to counteract what many perceived as the profiteering of traditional financial firms, the crypto industry seemed to have become something even worse.

The Transformation of Digital Assets

Since then, digital assets have become more professional. Real builders have come up in the recent crypto winter who create genuine opportunities for both crypto-natives and non-crypto-natives. A new focus on Real World Assets (RWA) and real-world use cases has emerged. Recent projects offer more utility than most ICOs, illustrating the difference between creating actual value and just adding the term blockchain to a brand to increase its stock price. The RWA market is huge, with tokenization only just beginning, which will forever change how people view and access investments.

Tokenization and Its Impact on Crypto Perception

The success of tokenization can significantly change the general perception of crypto. Tokenizing assets can lead to improved price discovery and accurate pricing, creating a spot market where none existed before. It also allows for better tracking across supply chains, authenticating the genuineness of collectibles and commodities, limiting counterfeits, and allowing holders to better maintain and understand the value of their items.

Democratization of Access

Historically, many illiquid assets were only accessible to a privileged few who could benefit from their price action. Tokenization eliminates these entry barriers, permitting virtually anyone to invest, even on a fractional basis. This process can also enable the creation of entirely new asset classes that did not previously exist. However, it is essential to invest in tokens backed by real, tangible assets. This ensures that investors can redeem them for the actual asset itself or their cash value, providing better outcomes than those realized in ICOs or NFTs.

The Next Major Step

The concept of tokenization of art and real estate has been a topic of discussion since 2015. However, these projects have not gained significant traction due to various reasons, including lack of interest and actual RWAs to tokenize. The tokenization of liquid commodities like gold or silver offers a proof-of-concept that assets can be brought on-chain. This provides new opportunities to create new markets and unlock access to assets in ways not previously possible. The potential provided by RWA tokenization extends to all investors and market participants, providing a new, accessible, transparent, and efficient opportunity.

Edited by Jonathan Stoker