A new trend is becoming more apparent in the world of cryptocurrency and blockchain technology. Although initial coin offerings are still the go-to method of raising additional funding, it seems Initial Asset Offerings are also worth keeping an eye on. These projects are slightly different, as they primarily fund products and services.
The IAO Concept Explained
An initial coin offering can be used to fund any type of blockchain project or venture. In most cases, such companies are essentially creating securities, which can cause a lot of legal problems. Moreover, the ICO model doesn’t fit every project. This is especially true when it comes to managing in-game items, collectibles, and so forth.
The Rise of Digital Assets
Over the past few months, there has been a growing focus on digital assets, especially those issued on a blockchain. Various trading card games are embracing this model as of right now, and it seems to be only a matter of time until this affects the way in which funds are raised for such projects.
Initial Asset Offerings can make a big change in this regard. They are designed to allow for the sale of currencies which can be linked to any blockchain project, but these currencies have actual use cases. Since each currency will be used in-game and sold on in-game marketplaces, it serves a purpose. This allows developers to shift their focus to the assets they are trying to bring to the world.
These IAOs target companies that want to offer a working product or service, rather than create hype for a new cryptocurrency. War of Crypto is the first project to embrace the IAO, which was conducted using the ERC-1155 standard. The firm offered exclusive access to in-game assets for investors, rather than only selling a new digital token.
The Road Ahead
With the interest in blockchain collectibles on the rise, new standards will need to be created. The ERC-1155 Initial Asset Offering option is well worth exploring for all kinds of companies. This concept transcends purely tradeable items, as they can only represent digital assets which are backed up by tangible items. ERC-1155 collectibles are free to create, and they can be extracted once the item in question is destroyed.