The Tezos fundraiser is underway. If you plan to make a contribution, you can do so by going directly to Tezos.com. Be sure to type the URL directly into your browser. And use incognito mode! Good luck!
First of all, don’t call it an offering. Call it a contribution. All funds raised are going to a Swiss foundation - The Tezos Foundation.
Contributions to the Tezos’ foundation’s fundraiser are not “investments”. The foundation will recommend allocation of tokens in the genesis block based on contributions. Much like a fundraising campaign on Kickstarter, donors make donations with the expectation that the project leaders will progress the project and deliver the benefits in good faith.
The same is true for ICOs in general and Tezos in particular. We can expect that the foundation will give donors Tezzies in return for their donation, and those will be given at the exchange rate quoted, but Tezzies by themselves are only a value store, and don’t represent the real value that the Tezos blockchain can create.
Think of of the Tezos fundraiser as a way of funding the birth and growth of a new type of ledger system that has the opportunity to fundamentally transform how records are kept, agreements are made, and results are monitored. The value of the Tezzie will be eventually reflect the success of that ecosystem.
When is the fundraiser scheduled?
The fundraiser has been announced for commencing July 1st, 2017 and running for approximately 13 days.
How much does it cost?
A contribution of one bitcoin (1 XBT) will lead to an allocation of five-thousand tezzies (5,000 XTZ) plus a time dependent bonus. This bonus is meant to incentivize contributors not to delay their participation. The bonus starts at 20%, meaning that a contribution of 1 XBT will yield an allocation of 5,000 X (1 + 20%) = 6,000 XTZ and decreases progressively to 0% over 5 periods lasting 400 Bitcoin blocks each.
So making a 1 BTC contribution during the first 60 hours will yield 6000 XTZ. At an exchange rate of 1 BTC = $2200 USD, this would price each Tezzie at $0.37
How do I contribute?
The Tezos Foundation will accept funds through a special website which will open only when the fundraiser opens. As the Slackbot is fond of saying - Beware of phishers. The Tezos foundation or the Tezos team will never contact you directly asking for bitcoins or ether. Check all official communication on https://www.tezos.com or https://www.tezos.ch. The team has referenced crowdfund.tezos.com as the official site where the fundraiser will reside, but that currently points to Tezos.com.
What currencies will be accepted?
If you want certainty of exchange rate, contribute with BTC. If you choose to contribute in ETH, the equivalent BTC amount will be estimated based upon the timestamp of the Ethereum block in which the transaction is included and the median of the the last trade price on Poloniex, Kraken, and GDAX. This is offered for the convenience of ETH holders and on a best-effort basis. Alts will be accepted at the same website via ShapeShift. Contributions in fiat currencies are also possible through Bitcoin Suisse AG, though be advised to check their rates and the legal permissibility of that course of action within your jurisdiction.
How much will be raised?
There is no cap on the amount of contributions that will be accepted by the Foundation. Speculation is rampant on the potential size of this ICO with predictions from $20M - $1B. The founders have chosen (wisely I believe) to go with an uncapped ICO so that all investors (big and small) will have an opportunity to participate. The fundraiser will have a fixed period in which donations will be collected. That period is the time it takes the Bitcoin network to mine 2000 Bitcoin blocks. As of the end of May, blocks are being mined approximately every 9 minutes, which puts the duration of the fundraiser around 13 days.
Besides the contributors, who else will be allocated Tezzies as part of this ICO?
OK - stick with me on this. The founders of Tezos operate a company called Dynamic Ledger Solutions, Inc. (DLS), and the IP associated with Tezos is held by DLS. Over a 4-year period, the Tezos Foundation will acquire DLS, in return for 10% of the total coins outstanding following the ICO.
DLS raised seed capital of about $900k, and has further obligations of about $400k. This $1.3M will be converted into coins during the ICO and paid out to the debt holders. It is not clear if the seed investors will retain equity in DLS following debt repayment (which would reduce founder stake, but not change the overall balance of coins).
The foundation will also retain a 10% stake of coins created during the ICO. These coins will be used to further fund development efforts beyond the funds raised in the ICO.
What happens to the funds raised?
The Tezos Foundation will use funds raised (plus the 10% stake being vested over 4 years) to extend the capabilities of the Tezos engineering, marketing, legal, and outreach. The team has published a roadmap based on funds raised:
How do I get my coins and what can I do with them?
The Tezos team has not been specific about the timing and method of coin distribution following the ICO. a TGE - Token Generation Event will happen once the Tezos blockchain is ready to be instantiated. All of the tokens secured through the fundraiser, plus those being distributed by the Foundation for various other activities will be part of that Genesis Block. We don’t know when that TGE will be, but the team has mentioned a late 2017 timeline. We expect that details will be provided in the near future.
The Tezos team has stated that initial token distribution will come through a paper wallet that will be generated during the contribution process. They have further published an overview of their technology development and a wallet / client is in the works. This wallet will store keys, coins and track contracts among other functions.
From an exchange perspective, it’s a long road from ICO to being listed on Coinbase. Most likely, Tezzies will be tradable on small to medium sized exchanges like https://shapeshift.io/. The team has made no commitments yet on the timing or liquidity of coins received in the ICO.
Do you have additional insights or questions? Post them below!