Augur Sold 1 Million Ethereum at $0.7, Why Experts Say It Was the Right Decision

Augur Sold 1 Million Ethereum at $0.7, Why Experts Say It Was the Right Decision

Augur Sold 1 Million Ethereum at $0.7, Why Experts Say It Was the Right Decision

According to cryptocurrency researcher Dovey Wan, the decentralized prediction marketplace Augur sold around 1 million Ethereum at $0.7 immediately following its fundraising round.

If Augur had sold its Ethereum reserve on the upside, in the $1,000 to $1,500 region, the $700,000 it obtained two years ago could have been worth $1 billion to $1.5 billion. Even after an 80 percent correction, 1 million ether is worth around $280 million as of September 2018.

According to Wan:

Augur Founder Responds, Experts Agree With Krug

Joey Krug, the creator of Augur, responded to Wan’s criticism with the simple argument that Augur was and still is a startup, not a hedge fund.

In 2015, when Augur initiated an ICO, the market was highly unstable and extremely volatile. The price of ether, the native cryptocurrency of Ethereum, surged from $10 to $1,500 throughout 2017; but in the years prior to that, the price trend of ether was truly unpredictable.

As a startup and an open-source project, the immediate action of Augur was and should always be to convert the money raised in an ICO to fund development. Evidently, as seen in the case of Gnosis, another prediction marketplace based on Ethereum, projects could certainly leave a portion of their holdings as a long-term investment.

Investors do not provide millions of dollars worth of ether to projects to benefit the pockets of the founders, but to finance the blockchain networks being developed by the projects so that they can solely focus on the development side of it, not investment.

Krug, who remains the chief information officer of $1 billion cryptocurrency hedge fund Pantera Capital, explained:

Linda Xie, co-founder of Scalar Capital and advisor to 0x Project, echoed the sentiment of Krug, stating that the decision of Augur to focus on building with the funds raised in its token sale was appropriate.

Crypto Projects are Advised to Utilize Raised Funds for Development

As Xie, who works with many cryptocurrency-related companies and some of the biggest Ethereum projects, emphasized that startups are advised to focus on development rather than operating a hedge fund with raised capital.

At least in the early stage, projects should allocate all of their resources in protocol and platform development, considering that investors in the market have invested in projects to do exactly that.

Cover Photo by Evgeni Tcherkasski on Unsplash

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Joseph Young Author

Joseph Young

Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights and analysis of cryptocurrencies, innovative and futuristic technologies.

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