Foreword

The only way to relieve your anxiety might be to get rich. If you bought stocks of companies such as Facebook, Amazon, Apple, Netflix, and Google in the early days of the Internet and have been holding them till today, you must have gained considerable returns by now, if not achieved financial freedom. If you subscribed for an Initial Public Offering (IPO) of a company, the growth in assets was even more impressive, almost tens or even hundreds of times bigger. The companies sell the stock equity to public investors to raise funds, which will then be used to expand their businesses and realize visions while rewarding investors with returns.

However, it is not easy to participate in such early fundraising subscriptions in traditional financial markets. Generally, investors will need to hold several investment accounts and abide by local laws and regulations, while providing proof of identity and assets as required. To go public, a company will undertake huge expenses in dealing with legal affairs, accounting, underwriting, public relations, etc. As most of the expenses are required for a longer term, small-sized startup teams are hence refrained from raising funds through such methods. In addition, it takes a long time (generally a decade or longer) for investors to obtain satisfactory returns.

Fortunately, the emergence of blockchain technology has revolutionized all of these. Blockchain is decentralized and permissionless, which breaks many restrictions in fundraising and stock subscription that the traditional financial system imposes. You can become an early investor in different projects by participating in the Initial Coin Offering (ICO) anywhere as long as you have a cryptocurrency wallet. For example, ETH witnessed its price rising over 10,000 times, from $0.3 in the crowd-raising round, within just 7 years. It was definitely a great hit and highly talked about. To find more projects with high potential, Gate.io launched its Startup platform, allowing users to unearth the profitable ones and become angel investors in this emerging industry.

What Are Startup Offerings?

The Gate.io Startup Offering is Gate.io’s Initial Exchange Offering (IEO) platform. Similar to the ICO on the blockchain, Gate.io Startup allows users to find emerging projects and cryptocurrencies to be listed. If they feel that the team and cryptocurrencies have more room to grow, they can subscribe for some shares before they are listed on exchanges and available for trading on the secondary market.

In order to reward its users, Gate.io launches airdrop activities on the Startup section at irregular intervals. Gate.io VIP users may participate in Startup projects for airdrop tokens, for which users do not need to pay actually, but they still need to ensure sufficient USDT in their spot accounts. Tokens will be airdropped to eligible participants after the subscription when the snapshot is taken.

The number of shares that users can subscribe for depends on their VIP levels. The higher the level, the more they can subscribe. At the time of writing, over 500 projects have been launched on Gate.io Startup, with the total value exceeding $80 million and the total number of participants reaching 9 million. Gate.io reviews every Startup project carefully, including its team members, project details, the blockchain technology applied, token allocation, use cases, etc., aiming to reduce any potential risks. Many Startup projects on Gate.io have brought very generous rewards to early investors.

Why Do Blockchain Projects Need An IEO?

The blockchain industry is undergoing rapid growth, with a variety of projects and protocols springing up one after another. The industry is not regulated by traditional financial systems and government laws, allowing any startup team or even an individual to issue and trade cryptocurrencies on the blockchain. On CoinMarketCap, there are more than 20,000 cryptocurrencies known currently, excluding those that are not tracked by the website. This is a number that far exceeds stocks listed and traded in all countries around the world.

Compared with the traditional complicated IPO process, it is much easier to issue a cryptocurrency in terms of difficulty and entry barrier. But this does not mean that project teams can easily raise funds. The unregulated blockchain has resulted in a slew of scams in the industry. Even those honest teams who are dedicated to developing excellent blockchain projects are unable to attract investors without enough traffic and promotion, even if they have a pool of talented team members and innovative ideas.

Given the competitive environment for ICO fundraising on the blockchain, it would be a better choice to conduct IEO with the help of well-established exchanges that already have liquidity when it is listed on the exchange for trading. In addition, if the project develops well, the exchange can also get improved trust from users. It would be mutually beneficial to both the project team and the exchange.

For investors, IEOs on exchanges are more secure than ICOs on the blockchain: the blockchain is inundated with many anonymous teams and cryptocurrencies with no actual use cases; the lack of transparency of information creates an unequal relationship between investors and project teams; it sometimes happens that the project team run away or abscond with the funds after attracting many investors. Considering all these disadvantages of ICOs, exchanges require project teams that seek an IEO there to have viable business models, experienced teams with all members’ identities verified, and provide the whitepaper to demonstrate their determination for long-term development. By doing so, the project could gain more traffic and a considerable user base.

Well-known Startup Projects

Gate.io Startup has assisted the fundraising of more than 500 projects, among which several cryptocurrencies have seen their prices increase by more than 100 times after being listed. Also, there are about 100 cryptocurrencies that see a 20 times increase compared with that of crowdfunding. According to CryptoRank, Startup projects have the room to grow up to 15 times on average. We will introduce some outstanding Startup projects that have made astonishing performances.

1. XCAD Network (up to 90x increase)

XCAD Network is a project built on the Zilliqa blockchain. It is characterized by the creator economy and the Watch-To-Earn model. It incentives content creators with creator tokenization in a decentralized manner while helping smaller creators benefit from YouTube’s algorithms to develop their channels.

XCAD Network also has its own NFT marketplace, which is designed to help creators connect more closely with their audiences, empower their fans and establish additional revenue streams. In addition, XCAD Network has an educational platform, which offers a series of guidance and courses produced by famous YouTubers to onboard aspiring creators who have no idea of where to start.

1. KardiaChain (up to 109x increase)

KardiaChain is a blockchain platform designed to be fully interoperable and “non-intrusive”, meaning that other blockchain networks can connect to KardiaChain without changing their own protocols. KardiaChain uses a dual-node structure to maintain connections between its own ledger and other blockchains and provides developers with sharding for scalability and smart contracts.

The native token of KardiaChain is KAI, which can be used for staking, paying transaction fees, participating in services, and deploying smart contracts. Created in the bear market in October 2018, the project has a history of 4 years, making itself an established project in the blockchain world.

1. GateToken (up to 32x increase)

GT (GateToken) is the crypto asset of GateChain and the native token of the Gate.io exchange. GT holders enjoy various rights, including upgrading the VIP level, participating in the voting of coin listings, paying transaction fees, subscribing to Posts on the platform, participating in a variety of bonus activities, etc.

GT is used to pay transfer fees on GateChain. It is the PoS mining reward of GateChain. The platform buys back and destroys GT on a regular basis. GT is now fully deflationary. In the future, Gate.io will leverage its market position to improve the intrinsic value of the GT by providing it with real-world application scenarios.

GT does not have an eye-catching performance in terms of its price. However, in the current bear market (at the time of writing), it still maintains an increase of over 10 times compared to the time when it was initially issued. It is regarded as a long-term investment tool to survive both the bull and the bear markets, as many other projects are now 1% or lower of the issue price, many of which even collapsed soon after.

For further information about GT, please refer to What is GT? on Gate Learn.

How to Subscribe to Startup Projects?

To subscribe for a token on Gate.io Startup, users must:

(1) Register a Gate.io account and log in.

(2) Provide identity information and complete KYC verification.

(3) Ensure sufficient funds for the supported coins in the Gate.io spot account.

(4) Sign the Purchase Agreement on Startup before placing orders.

If the account you are using is eligible, you’ll see a checkmark for each requirement in the “Requirements for participants” section. As the subscription page does not display your spot account balance, users must manually check whether there are enough funds. Due to laws and regulations of different countries, users in some regions may be restricted from signing the Purchase Agreement. If you are in such regions, you may subscribe with an account belonging to a trusted friend or relative that has no such restrictions.

The amount that each user can subscribe to varies according to the VIP level and the number of assets the account holds. If you are a VIP0 user, you must hold assets equivalent to more than 500 USD in the spot accounts to be qualified. The formula of max subscription share: max subscription share = the square of the VIP level * 10. For VIP1 users, the max subscription shares are 1 x 1 x 10 = 10. For VIP2 users, it is 2 x 2 x 10 = 40, and so on. For VIP0 users, it is 2.

In order to provide all VIP users with equal opportunities to participate in Startup subscription, Gate.io limits the maximum subscription shares for all users, even those holding more than one account, to 1,000. Gate.io will only validate one order of a single user, provided he/she placed multiple orders via different accounts. Participants should ensure sufficient balance, greater than the subscription value, in their spot accounts within two hours after placing an order. Otherwise, the order will be disabled. The platform will count all eligible subscription orders when the subscription ends each day, and distribute the tokens according to the ratio of each user’s subscription shares to the total subscription orders. The final result will be announced before trading starts.

Step-by-step instructions (on the web)

1. Log into your Gate.io account and click [Startup] on the navigation bar.

2. Select a project that is [In Progress], and click it to enter the subscription page.

3. Check the requirements for participation and sign the Purchase Agreement. Each completed requirement will be displayed with a tick mark.

4. Click [Place Order]. If you meet the subscription conditions, you can place an order within the specified period.

5. Input the order amount (should not exceed the maximum subscription limit) and click “Place Order”.

6. To view the participation results and order status, go to [Order] → [Classic Account] → [Startup]. If the subscription fails, you can view the reason in the “Startup history” tab.

Step-by-step instructions (on app)

1. Log into your Gate.io account on the app. Click [Startup] on the navigation bar on the Markets page.

2. Choose a project that is in progress and click it to enter the subscription details page.

1. Fill in the required information and sign the Purchase Agreement. Each completed requirement will be displayed with a green icon.

2. Click [Place Order]. If you meet the subscription conditions, you can place an order within the specified period.

3. Input the order amount (should not exceed the maximum subscription limit) and click “Place Order”.

4. To view the subscription results and history, click on the top-right icon.

FAQ & Notices

Two common scenarios in the crypto space often can leave us feeling frustrated. The first one happens when the price drops significantly after we buy a coin, which causes huge losses. The second scenario happens when the price of a coin skyrockets but we do not hold a single share. Both situations may occur in the innovative startup offering. Paying more attention to the following affairs before placing an order will help you avoid such things.

1. Double-check the eligibility of your account.

Only users who have completed the KYC authentication are eligible to participate in the Startup offering. Also, users need to pay attention to the VIP level and balance in their accounts. It usually happens when users realize that they are only allowed to subscribe for a very limited number of shares due to the low VIP level, or that their orders have been nullified due to insufficient balance.

2. Understand which type the token you are subscribing to belongs to.

Gate.io offers three types of Startup projects: airdrops, discounts, and DAO lockups. Participants do not need to pay any funds for their Airdrop orders; for discounts, it is required to pay according to the actual number of tokens obtained; for DAO lockups, tokens are not credited to participants once and for all when the trading market opens, and could be sold after they are unlocked.

3. Watch the token distribution date and the listing time.

After the subscription, the platform will count all eligible subscription orders and calculate the share of each user according to the proportion of their subscription shares to the total subscription orders of the coin. The subscription results and the time when the trading market opens will be officially announced. If you want to sell or buy as soon as the market opens, please pay close attention to the relevant information.

4. Why is the number of tokens I actually receive different from the share displayed on the subscription page?

The number of tokens a user will receive depends on the number of valid orders. The number of tokens the project team releases for Startup is fixed. If valid orders are much more than the startup supply, the tokens will be distributed equally.

Formula:

Number of tokens received = (subscription amount of the user ÷ total subscriptions of all users) * total supply of the Startup.

For projects that require payments, the actual payment will decrease proportionally when the number of distributed tokens decreases. But it is still necessary to maintain sufficient assets in the account until the subscription ends. Otherwise, the order will be regarded as invalid and the subscription will fail.

5. Is it an initial or non-initial project?

Some of the startup projects are already listed on other platforms or blockchains and are therefore non-initial projects. If you want to trade and deposit on Gate.io, please double-check that you choose the correct blockchain and enter the correct contract address to avoid any potential loss. In addition, knowing the transaction history of the non-initial tokens on the blockchain or other platforms can avoid buying or selling at unreasonable prices.

Typically, there is very limited information on initial tokens for investors to refer to. It would be appropriate to investigate the founders, the operation of their communities, tokenomics, financing goals, business plans, expenses, etc. before placing an order, especially for those that require payments.

6. Measure risks before predicting gains.

Most Startup projects are still in their early stages. Such factors as the operation and underlying technology of the project, relevant laws, and regulations, as well as the market situation, may cause sharp fluctuations in token prices. Airdrop tokens are free from the risk of losing the principal. But for those that require payments (including those offered at a discount), the losing risk exists. Therefore, it is highly advised to invest with caution as fewer gains is definitely better than significant losses.

Conclusion

A sharp contrast exists between the dream of getting rich and the real situation. Statistics show that the average person has only a 1% chance of starting a business successfully. Among many startup companies, 95% fail within a year. Even among the remaining 5% of companies, 80% cannot last more than 5 years. This is the case in both traditional financial markets and the blockchain industry.

In the crypto space, we may hear so many stories about how investors made a fortune by subscribing for tokens like MATIC, IOTA, AXS, and GMT in the early stage. However, this is just a typical survivor bias. Actually, the crypto market is overwhelmed by unscrupulous scams and failed projects, resulting in a dramatic plunge in token prices now and then. We should clearly understand that not all cryptocurrencies will 100% rise once you buy them. The truth is that insufficient funds in the market are unable to empower a diversity of dreams in the blockchain world. As a saying goes, “What millions died that Caesar might be great” is an authentic reflection.

A Startup subscription is essentially similar to investing in emerging companies in the traditional financial market. It aims to get significant returns while bearing the operating costs and risks of project failure. What users buy is a dream that may or may not come true. Since high returns are often accompanied by high risks, investors should understand all possible outcomes clearly.

The subscription rules for each Startup project vary. Be sure to read the subscription details carefully before placing an order. Though Gate.io has reviewed the Startup projects beforehand, it does not mean that Gate.io endorses these projects.

To learn more about the difference between Startup and fundraising on the blockchain, you may also be interested in these articles: “What is an ICO?“,”What is an Initial DEX Offering (IDO)?“,”What is an Initial Exchange Offering (IEO)?“