Crypto Incubators: An Ultimate Solution or Just a Tool for Startups?

gepubliceerd op by Cointele | gepubliceerd op

After crypto prices went through the roof in 2017, an eruption of new tokens, companies and products occured.

Since mid-2018, many fortunate companies have been guided through their developmental stages by such companies.

The motivation for taking a chance on these companies is usually a significant chunk of equity, something that can transform into a hefty reward should the company become successful at a later date.

In an ideal world, the incubator company swoops down on a rough-around-the-edges, yet promising young company and takes a nice chunk of equity.

Who else is at it?Binance is not the only company that wants a stake in promising new companies.

Reessen Horowitz's initial foray into crypto began with a $300 million "All-weather" investment fund that the company reported would be implemented over time, regardless of the tumultuous fluctuations of the crypto markets.

Coinbase VenturesAs Binance Launchpad clearly shows, some crypto companies have skyrocketed from startups to potential kingmakers in their own right.

Separation of ownership form responsibilityIn light of the Matic debacle, many commentators have suggested that incubator companies do not do adequate research into the companies they promote other than short-term profit.

Adcock told Cointelegraph that he does not believe companies behind the incubators are culpable unless they have been shown to be working in a fraudulent or illegal manner.

Polites outlined his view to Cointelegraph, saying that as cryptocurrency is still a very young sector, it is unlikely that many of the companies going through development in incubators will see profitability in the short term: "The crypto adoption and use challenge is still the biggest issues along with education."