A new ICO-based alternative to debt-based ILP (Initial Loan Procurement) shows its application prospects and hopes to be applied soon. It combines the trading qualities of ICO tokens and the ability to fund blockchain technology without government regulation, but it also adds extra security and interest returns, which may make it the future of blockchain investment.
ICO’s have always been a stable foundation for the cryptocurrency market boom. According to Crypto New Media, most of the blockchain-based companies have switched from traditional venture capital models to ICOs, and ICOs have raised more than 350% of venture capital.
ICOs are critical to the development of many cryptocurrency and blockchain technologies, but the process is often heavily criticised for its own problems and shortcomings, which have led to regulatory measures in more and more countries. In many jurisdictions, the future prospects of ICOs are unclear, while investors and project parties are concerned that ICOs may be classified as securities, and some countries have implemented some tax measures for ICOs. In addition, the ICO has little protection for investors , and virtually half of the ICOs have failed. The CEO of Ripple even said that when participating in the CNBC program, most of the ICOs on the market were fraudulent.
A new investment structure called First Loan Acquisition (ILP) can solve these problems to some extent and slowly begin to adopt. ILP is actually a universal digital loan agreement that uses knowing your customer (KYC) smart contract technology, a way to target a company rather than a specific cryptocurrency . A loan agreement means that investors can receive interest on company performance and trade these loans in a manner similar to cryptocurrency. Because ILPs are more secure and because they can be sold to other investors like stocks, they provide investors with a safer way to invest in new cryptocurrency or blockchain companies.
The best practitioner of ILP is Blockhive. This is an Estonian blockchain incubator that issues the ILP protocol instead of the traditional digital currency. The pass obtained by Blockhive’s investors can be used as a creditor agreement, which means that these agreements can be traded like other digital assets, but they can also allow investors to jointly own 20% of the company’s profit ownership.
Following China’s ICO ban late last year, this new technology could be the next step forward for China’s role in blockchain.