The Gateway to Investing in Crypto Startups
Everyone knows investing in startups is risky. Fledgling projects and companies can run out of runway or fail to attract users, or the technology may prove to be obsolete. But get it right and the returns can be spectacular, with ROIs in the thousands of percentages. The key is to pick the winners, but this is easier said than done.
One way might be to look at where the startups are listing. But getting accepted onto an exchange isn’t enough. Investors and traders need to find startups that are listed on exchanges with specific and dedicated platforms for startups. This ensures the startups have a sustainable future and won’t just burn out.
Gate.io Startup is a blockchain assets discount offering platform that allows early-stage blockchain projects to access funding from Gate.io’s over 10 million users. Gate.io Startup backs both the developers of the projects and their investors with an array of support mechanisms. This makes it easy for users to invest in these new projects with confidence.
The first level is a screening process undertaken with the experience that comes from being one of the oldest crypto exchanges in the world. A professional evaluation is done for each startup project to ensure its viability and innovation. First, Gate.io evaluates the practicality of the project and the founding team, and then compares it with other projects to assess its ability for healthy and steady development. Second, the collective wisdom of Gate.io’s user base is brought to bear: If the project fulfills its Startup fundraising goal within 24 hours, it will be listed on Gate.io.
Collateral and discounts
Gate.io Startup has two further mechanisms that help support the new projects listed on its platform and the users who back them: collateral and discounts. In May 2020, Gate.io established a 100% collateral system to provide collateral for each user backing projects on its Startup platform.
Gate’s determination to be responsible to users is further seen by the discount scheme it offers. Users qualify for Startup participation based on their GateToken (GT) holdings over the preceding 30 days, or the VIP level associated with their accounts, with a requirement of a VIP Level 1 or higher. There is a limited number of tokens offered by projects listed on Startup. When there is a higher level of commitments from users than the project’s fundraising goal, users are charged and allocated a number of tokens in proportion to their total commitment from the fundraising.
Here’s how this works in practice: The maximum subscription limit for a single user is 1,000 shares. Further, the relationship between the VIP level and the maximum subscription allocation is that the maximum number of subscriptions is the square of the VIP level multiplied by 10. But note that this is not the final actual subscription number. For example: VIP2 users can subscribe up to 2 x 2 x 10 = 40 shares, while VIP3 users can subscribe up to 3 x 3 x 10 = 90 shares
The returns that have been generated on Gate.io’s Startup platform are some of the highest in the industry. Returns differ from project to project, but once listed some projects have seen a surge of up to 10,000% in the first day of trading. Over time and in aggregate, users have been able to generate returns of five to seven times their money. The strict vetting process makes sure that only viable projects are offered to users, who are then supported by collateral and by discounting. This is a win-win for the next generation of crypto projects, for both the project developers and Gate.io’s users.
DISCLOSURE
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written by: CoinDesk Staff
