A decentralized cloud storage network, Filecoin, has raised almost $188 million in the first hour of its Initial coin offering (ICO).
Filecoin is a blockchain-based storage network with a native token Filecoin, which miners earn by providing open hard-drive storage to clients, while users spend these tokens to store their data in the decentralized network.
Last week, the company conducted a pre-sale, raising a total of $52 million. The project was supported by around 150 investors, including Andreessen Horowitz, Sequoia Capital, Union Square Ventures, and Winklevoss Capital, and nearly 100 prominent Silicon Valley investors.
The ICO, however, didn’t go smoothly as some users faced problems with accessing the platform shortly after the sale was launched. Besides, there have been problems with displaying Filecoin ticker that tracks the total sum raised. At the moment, the ICO is temporarily paused. Still, despite the problems, it became one the most successful ICOs by far.
According to the company, 70% of tokens will be held for miner rewards, 15% will go to a new foundation, another 15% will go to to Protocol Labs, which created Filecoin, and 10% will go to ICO investors.
Some have also criticized Filecoin for its advisor sale, saying there is a big difference between the price per token paid by advisors in a pre-sale and the price paid by investors in a public sale. Contributors in an advisor sale paid a maximum of $0.75 per coin and could also choose discounts based on the amount of time the coin would vest. Unlike public investors, advisors faced less risk as they knew what the price of the token would be all the time.
The company, meantime, commented the issue: “The advisor sale involved an amazing group of technologists, researchers, entrepreneurs, engineers, designers, industry leaders, and investors. All of these people and organizations (a) have been working hard with us for years to make IPFS and Filecoin successful, (b) have fully committed themselves to work hard with us and for the Filecoin Network for many years to come, and/or (c) offer tremendously valuable advice, hands-on help, knowledge, skills, resources, connections, and more.”
“And all of them are committed — vested — to work closely with us to make the Filecoin Network as valuable as they can, for years to come. Hence the discounted price.”
Besides, there also were concerns about the growing price feature, which according to Filecoin was designed to “price out” participants. Under the ICO terms, the value started at $1 per token and increased by a dollar for every $40M USD raised, with a cap amounting to $6 dollar per token. This, in turn, urged people to invest as fast as possible.
The crowdsale was conducted through CoinList, a platform that was developed by Protocol Labs and AngelList to streamline ICO processes, and was available only for AngelList accredited investors with an annual income of at least of $200,000. Filecoin became the first company to use CoinList’s system for an ICO.