Coin Price Bumped from 0 to $600K in A Day, but Its Founder Has Far Bigger Ambitions
Updated: Sep 5, 2018
Crypto Asia 100 Vol.2
Last month, a new coin with no asset backup or utility attained a total valuation of $300 million on the second day of its launch. Its sole purpose was to "safeguard" the membership to a chat group. I recently did a followup interview with its founder, Chongge, hoping to learn his design of this coin and the community around it.
BIANCA: The past half year saw a crypto bear market. Did you invest in any new project? Or just watched on the sidelines?
CHONGGE: We made very few investments this month. Despite the bear market, the valuation for many projects remains unreasonably high. I'd instead search for buried gems than going through exchanges. Think of the fees new tokens have to pay to get listed on Binance, Huobi, and OKCoin. Why bother? An unlisted new token can have a low market value with excellent growth potential--that's what I'm looking for. The good thing about the bear market I think is that teams are less eager to sell their stuff and more focused on developing good products.
BIANCA: You are one of the first bitcoin miners in China. What do you think of the so-called "trans-fee mining model" that emerged lately?
CHONGGE: When we talk about mining methods, we talk about Proof of Work, Proof of Stake, and Delegated Proof of Stake. Consortium blockchains use Byzantine consensus. All of them are familiar. There is no news here. Lots of projects merely piece together existing mechanisms and claim to have created a new mining model. But in reality, it is extremely tough to devise a new mechanism. The "trans-fee mining" is just a marketing ploy. It is not based on any consensus and therefore has nothing to do with actual mining.
BIANCA: I am also a member of the Aisi Wechat Group. From my experience, it is the most active crypto group chat out there. Tell us about your AISI community. How did you come up with the idea of "IGO" or initial group offering, where token issuance takes place in the group chat?
CHONGGE: Basically, AISI Token is membership built on the smart contract. We initially planned to issue 500 tokens, so everyone in the group gets one for free [Note: the size limit of each WeChat group is 500 people]. People need this token to enter our AISI community. They also have to leave their token behind when they exit. Since it’s based on the smart contract, this membership cannot be forged, stolen or abused. It has credibility and authority. Additionally, it’s easy to transfer from one person to the next.
To our surprise, the token’s value took off after we issued about 160 of them. People would spend millions of RMB in exchange for one AISI. I was as incredulous as everyone else! Then I realized it was out of recognition. People believe our membership worths that much. Let's suppose Jack Ma, co-founder of Alibaba group, creates a similar group chat requires a token for entry, the price of said token would have skyrocketed as well. Because we all want to join Jack’s group and utilize the resources that come along. So I believe the price reflects how much the crypto circle respects our AISI community.
BIANCA: So how's the situation with members, now that AISI's price has gone up and lots of people want to join?
CHONGGE: Normally, some would be tempted to sell their token. After all, it's one million RMB given to you for literally nothing. But we don't want a high turnover rate for the group. Nor do we wish to see long-time members leave one by one. So the AISI committee came up with a proposal. For the rest members, we would give out 0.1 token at first, and deliver the rest 0.9 token by 2% each month. I sent 0.9 of my token back to the committee myself. Half of the early owners who got one token responded by giving back their 0.9 voluntarily. I was relieved to see such support from the community. But technically, the token is still under their name. Even if you sell 0.1 of yours, your membership will be deemed void, and you will have to leave.
BIANCA: So every member has one full token?
CHONGGE: Correct. Nor are people with less than one token allowed to enter the group. Our community is valuable. Since the issuance of AISI, there have been frequent cryptocurrency airdrops into our group chat. The estimated value of airdrops we received so far cracked 80,000 RMB per person. We are a much more targeted audience than, say, those you can reach through website banner ads. Many are also influential in the crypto circle. Each member has an average of 2000-3000 connections through their WeChat account. If group members promote a particular project via their Wechat Moments, then the entire AISI community can easily attain over 600,000 impressions. More importantly, members will study those projects and make investments themselves.
Now, we have kicked out some inactive members and opened up 30 spots. Our committee would still give out AISI for free to the resourceful and those willing to grow with AISI. We would invite candidates to join with a 2-month trial period, and if they pass, they’d be granted an official membership.
BIANCA: What’s your long-term vision for AISI?
CHONGGE: We plan to develop AISI into an eco-system. First, our committee plans to redistribute our fund. 70% go to the members. 20% go to the committee to cover operation costs. 15% go to media that have helped AISI grow its influence and reputation.
Second, we founded AISI Laboratory as a part of AISI Blockchian Tech Company headquartered in Hangzhou, China. The lab provides technical support for other blockchain projects, and is in the middle of developing a new consensus mechanism.
Last, I am thinking about founding the AISI Foundation. I plan to use AISI community’s influence to help prospective projects grow. This fund will be unprecedented as it will not be owned by a person, but by a blockchain community.
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