Tokens.com (NEO:COIN), a technology company that offers investors an easy, secure way to hop aboard the cryptocurrency train, went public today on the NEO exchange in Canada under the ticker symbol COIN.
In short, this relies on something called proof-of-stake (PoS) technology, which the company says is an environmentally sustainable alternative to traditional crypto mining. Crypto miners, a now 12-year-old technology, are reliant on hardware that uses more than double the energy to mine $1 worth of bitcoin than it takes to mine $1 worth of gold or platinum.
Staking, meanwhile, lets companies and investors make money simply by holding currencies in a cryptocurrency wallet, no electricity generation required.
Tokens.com holds primarily Ethereum 2.0, as Ethereum transitions from mining to staking, and makes money in two distinct ways: First, as the coins it holds are used to validate blockchain transactions (read: like Bitcoin mining would), and second, as those same coins appreciate in value over time.
The money it earns from validating transactions comes from Ethereum 2.0 as payment for its staking services. Meanwhile, Token.com bought its Ethereum at $1,000 per ETH earlier this year, and today ETH is trading for more than $3,400. That’s a double win for the company and its shareholders.
“Tokens was created to really bridge the gap between cryptocurrency and the traditional investor,” CEO Andrew Kiguel told Proactive in an interview. “We raise capital from traditional investors who are looking to buy stocks and bonds and hold it in their portfolio and create a bridge to things that are maybe a little more difficult for them to access in the cryptocurrency world.”
Speaking of raising capital, Tokens.com just raised $25 million in a private placement. And now that the company has gone public, investors can get a piece of decentralized finance (DeFi) and the red-hot NFT (non-fungible token) sector without having to become a crypto miner. RIght now it's the only public company to offer that, Kiguel said.
“That is where Tokens.com comes in and differentiates itself,” Kiguel said. “We do the exact same work that a crypto miner does with the same end result, but we do it without the use of electricity and without the use of hardware. And that's what makes us environmentally friendly, there's no electricity consumed.”
Kiguel knows the environmental impact of Bitcoin can have because he cofounded and was CEO of Hut 8 Mining Corp (TSE:HUT) (OTC:HUTMF), one of the largest publicly listed miners in the world. His desire to find a better way is a big reason he left.
Now NFTs, like the digital art piece that sold for US$69.3 million as Christie’s auction house or the collectible video trading cards offered by NBA Top Shot, are built on Ethereum and other cryptocurrencies. When an NFT changes hands, Ethereum gets paid a fee and, in turn, pays Tokens.com for staking.
“If you think that NFTs are going to win the day, investing in Token.com helps you out,” Kiguel said. “The way to think about us is like the plumbing underneath the house that you don't necessarily see. We don't care which NFT sells for the greatest amount of money. ... As long as NFTs and DeFi continue with their momentum, the things that we’re buying and staking will continue to go up in value.”
As Token.com gets paid to hold cryptos, Kiguel says the company has a portfolio that can double or triple over the rest of 2021. There’s also a lot of room for upside.
Tokens.com went public with a $57 million market cap, but most of its peers in the space are at 5 to 10 times that amount, Kiguel said. Bitcoin miners, other competitors in the sense that they produce the same product in a different way, tend to trade 50 to 60 times higher.
“I'm not saying we're going to go like 50 or 60 times we go public, but there's certainly a lot of room,” Kiguel said.
Contact Andrew Kessel at firstname.lastname@example.org
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