Blockchain VR Startup Raises $25 Million on ICO

Decentraland, which is building a virtual world based on the blockchain announced it had raised $25 million during its ICO (initial coin offering) in mid-August 2017.

In the past year, ICOs have become a popular way of raising funds selling cryptocurrency to the public. Due to their unregulated nature, some commentators have voiced concerns over potential risks, cautioning the public to do their homework before making an investment decision.

According to Decentraland blog post, the ICO had seen over 2,000 unique buyers purchasing more than 86,000 Etherum (ETH).

Ethereum is a public, blockchain-based platform providing a cryptocurrency known as “ether” used by many of the companies to carry out ICOs.

The total value of the crowdsale reported by Decentraland would mean that the average single contribution was worth 43 ETH or over $12,500 based on the ETH price at the time of the offering.

According to unconfirmed claims the company had prevented a significant number of participants from buying into the offering, locking them out of the ICO.

The company also confirmed a lot of transactions hadn’t gone through during the ICO.

“Due to the overwhelming response to the project, almost 7,000 transactions did not go through, which resulted in a lot of disappointment. We anticipated this issue, and looked into alternatives to deal with this. One possible solution was removing the cap, which was not in our contributors’ best interest”, said Decentraland in a blog post published on its website.

The company’s platform allows users to develop and buy virtual assets like land and other goods. The tokens issued during the ICO are due to become transferrable on September 15, 2017, and token holders are expected to be able to claim land “a few months from now” as reported by the company.

According to ICO Watch List, as of 2017 Etherum accounts for more than 50% of the crowdsales but is prone to a number of phishing scams, hacks and frauds, as reported by various specialized publications like Coin Telegraph.

Earlier in July, Bloomberg reported that there had been at least 90 ICOs in 2017 worth more than 1 billion, exceeding early-stage venture capital funding.

The significant activity prompted regulators, including U.S. Securities and Exchange Commission, to take a closer look into the novel form of financing. Recently SEC published a report on ICOs concluding that some of the offerings might fall under US securities law.