Dubai-based cryptocurrency exchange BTSE intends to use the Liquid Network Bitcoin sidechain created by Blockstream to raise $50 million.
In what seems like a plus for the cryptocurrency community, Dubai-based cryptocurrency exchange BTSE has decided to raise $50 million of its token come March 2020. Sources also further indicated that the exchange plans to issue a total supply of 200 million tokens in the due course of time at $1 each and then to buy them back and burn 100 million.
The pitch deck for the offering reads:
“Funds raised will be allocated toward user acquisition to increase overall platform revenue, platform development, and liquidity, as well as expansion into lending, OTC and mining markets. The minimum investment size is $150,000 USD,”
This further indicates that the models for fundraising within the crypto space are constantly changing. It also further shows that the industry is growing with models that are normally used for startups and now are also applied for the raising of funds for cryptocurrency projects as well. This is because the offering will bring onstream new and innovative projects that can change the future of the crypto space.
This could also potentially alter the future of the industry as it could preserve Bitcoin dominance by introducing BTC sidechains as “Ethereum killers”. Sidechains allow for all kinds of off-chain operations which are determined by the use-case scenarios for which they were created. They also allow greater flexibility than the other Ethereum tokens which are driven by smart contracts. This could potentially reduce Ethereum’s dominance in the decentralized apps space.
Sidechains gained traction a few years but lost them due to the introduction of Ethereum as an all-in-one solution. However, that is all set to change as Liquid which is a Bitcoin sidechain is going to be linked to the BTSE platform (at least the Blockstream version of the sidechain). Sources further indicate that both the Bitcoin versions and the USDT versions will be integrated into the BTSE platform.
Lina Seiche who is the global marketing director at BTSE noted:
“The Liquid Network provides a reliable platform for token issuance that benefits from bitcoin’s stability and security characteristics.”
“Issuing tokens on Liquid is further much less complicated than on Ethereum, which mitigates the risk of smart contract bugs and makes exchange integrations easier as well,” added she.
While BTSE is the first and the largest offering so far to be made on the Liquid sidechain, it isn’t by no means the only one there. Others are Pixelmatic which plans to raise $16 million and Puerto Rican financial institution Zeus Bank which is working on its private placement. The buyback is intended to buoy demand after the burning of the 100 million tokens. The process is going to be initiated at least three months from the token launch.