Tokia, a crypto currency exchange platform, is conducting an initial coin offering (ICO) to fund its development.
According to the white paper, Tokia “aims to make Bitcoin payments direct and easy for everyone, everywhere.” The project is a crypto currency exchange platform which would allow users to convert their crypto assets into major fiat currencies.
This piece is an analysis of the facts available about the Tokia ICO sale. It should not be read as offering any advice or a recommendation. ICOs may have quickly become a popular tool for funding new projects but the ICO is high-risk for token purchasers. ICOs currently have an unclear legal and financial status.
Additionally, token buyers may find that their purchase does not offer them any security or equity in the start-up or project because the ICO is more like a crowdfunding initiative than a traditional IPO. As such, any investor who plans to buy tokens during any ICO needs to obtain all relevant independent advice and carry out their own appropriate due diligence.
Tokia plans to offer users crypto currency services including:
- an online crypto currency exchange platform,
a mobile app based wallet and exchange platform,
a debit card that allows users to make purchases using crypto currency and
cold storage facilities
The platform plans to accommodate all major crypto currencies and allow users to convert assets held in their blockchain wallets into other crypto currencies or international fiat currencies using a fast, simple and secure process. Users could also earn interest on their crypto holdings by lending their assets to others as part of a peer to peer lending system.
Like other fintech start-ups, Tokia appears to want to use blockchain based technology to increase efficiency and reduce costs. The idea appears to be that these services would help users to integrate their crypto assets into their normal financial activities. The white paper outlines a longer term ambition to provide crypto currency services within developing economies.
Tokia was registered with Companies House in the United Kingdom in December 2017.
ICO coin came: Tokia Token (Tok)
Token standard: ERC 20 (Ethereum)
Soft Cap: 1,500,000
Total token supply: 50,000,000
Public ICO sale supply: 50,000,000
Initial token rate: 1Tok/ 1USD
The Tok token is a utility token and does not offer any equity in the business to purchasers. Instead, the token would have a number of functions within the platform.
The ICO pre-sale opened on 4 December 2017 and will continue until 30 December 2017. After this, the public ICO is due to start on 31 December 2017. According to the website, the ICO will be arranged as a series of funding rounds with separate hard caps for each stage. The final round is scheduled to finish on 15 March 2018 when unsold tokens will be burnt.
The website lists four team leaders who have expertise in private banking, finance, business development and social media marketing. There are four advisors listed who bring additional experience in fintech, blockchain and crowdfunding.
Minimum viable product
The Tokia platform is in development with testing taking place during 2018. According to the roadmap, Tokia is currently in negotiations with payment service providers. The company plans to launch the exchange platform and mobile app for public use during the third quarter of 2018 with the debit card and cold storage available from 2019.
— TOKIA (@tokia_io) December 3, 2017
The white paper
This 37 page document outlines Tokia’s business proposition, the ICO sale and roadmap for development. The white paper does not go into much detail about the products and features that Tokia intends to offer. Security, transparency and ease of use appear to be key business values.
However, there are many risks with this venture. While crypto currencies have become more popular, their wider adoption is not guaranteed. If the venture is popular, will Tokia have the spare capacity to allow it to scale quickly? What would happen if existing financial institutions decide to offer customers crypto services? What mechanisms will be in place to monitor compliance with anti-money laundering regulations and other laws? What controls will be in place for the peer to peer lending component? The process of integrating crypto assets into everyday financial activities is also likely to be complicated and subject to regulatory oversight.
The Tokia business model is based on a fee revenue model. Tokia plans to charge exchange fees to users who do not hold Tok tokens or who exceed their monthly limit. There will also fees associated with the debit card, the peer to peer lending component and the cold storage facilities. The white paper does provide a lot of information about the planned fee structure except that it will be affected by ownership of the Tok token.
Tok holders would not pay exchange fees subject to monthly limits and other conditions. Token holders would have priority on waiting lists for the debit card once released. The number of Tok tokens owned could also affect exchange fees subject to terms and conditions. As such, it appears that Tok holders would be incentivised to keep their tokens. This would minimise any potential for the development of a secondary market for the Tok token. This could make it difficult for new users to buy Tok tokens and limit their exposure to fees.
Website and digital footprint
The website contains several infographics and a brief video which explain how Tokia’s products would work. In terms of social media, Tokia has a presence on Twitter, Facebook, Medium, Reddit and other platforms. These accounts do not have lots of activity however, this isn’t uncommon for ICOs.
If crypto currencies become more widely adopted, services that help users to manage their assets will become an important part of the ecosystem. If Tokia succeeds in developing its platform, then this may be one option to help people manage their crypto assets.
The Tokia white paper can be read here.