By Lawrence Hecht
An initial item offering (IIO) is the sale of a non-fungible crypto item. We heard of the term while preparing for several upcoming crypto-gaming conferences and it could a phrase you see more of in the coming months.
Changing Token Launch Terminology
We love catchy acronyms until we don’t. Many have already declared the term ICO (initial coin offering) to be at best inaccurate. Others go farther, claiming it is a dangerous term that encourages inappropriate financial speculation. Last fall, we issued a call to Stop Calling Everything an ICO. Back then, we distinguished between utility and security tokens, suggesting that “token generation event” (TGE) better described what happens when a new token is created. Many now believe that securities token offering (STO) will become the industry standard term in an attempt to clarify when the token is primarily being used to raise equity investments.
This view of the world still includes utility token that represent future access to a company’s product or service and are not investments. As explained by journalist Darren Pollock, utility tokens can be fungible or non-fungible. Fungible tokens are interchangeable. Membership reward tokens would be considered to be a fungible utility token. An non-fungible token would be a CryptoKitty. These tokens are usually denote the ownership of a digital asset. Venture capitalist Phil Glazer explains that non-fungible tokens “are unique in nature and can be distinguished from each other,” which is what makes them “desirable and differentiated, rather than it being a placeholder or representation.” He also states that for now they are usually implemented on top of Ethereum as ERC-721 tokens.
Initial Item Offering
An initial item offering (IIO) is when a non-fungible asset gets offered introduced to the market. These items are mostly digital collectibles and tokens used in video games. Alto, a blockchain gaming solution provider appears to have coined the term a few months ago when they launched. Its product lets developers build and sell virtual items, which can be pre-sold ahead of a game actually being launched. The thinking is that these non-fungible assets can secure early funding and engage an early user base.
Despite our skepticism, IIOs describe what is getting most people people excited about blockchain and gaming. Ahead of the Blockchain Gamer Connects San Francisco 2018, event organizers interviewed 11 speakers. Many of the interviewees raved about the possibility of ownership and the ability to trade digital assets as what is most exciting to them. At least two of them are publicly using the IIO term. Alex Casassovici, a blockchain architect and ICO advisor, hopes “more games find a way to get funding by going IIO (Initial Item Offering) and taking advantage of their IP to fund their development.” He went on to say:
Gaming is the OG industry for digital items…. The blockchain allows users to finally own their items, see how rare they are, and maybe even trade them… or collect them and use them across games.
“Gaming has always involved economics, whether gathering coins in Mario Bros or selling potions in Skyrim. For the first time players can truly own, collect, improve and sell their digital assets.”
Gaming is the sector where utility token adoption is most likely to happen to occur in the near-term. How this industry chooses to define the process of selling unique digital assets is likely to be adopted by other industries as usage of non-fungible token proliferates.
Feature image via Wikimedia Commons