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What Are Dual Tokens Sales ? (Explained)

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Avatar for Ashma
Written by ย ย 473
2 years ago

As from yesterday we've started to dig deeper in blockchain technologies, I've decided to write an article about not very popular term to general & new crypto members but currently lots of blockchain projects i.e 'Dual Token Sales'.

In this article I'll discuss about 'Dual Token Sales' and wether it is good or bad for the projects.

Let's dive in...!!

What Are Dual Token Sales ?

Many projects are issuing two tokens, one is a security token and other as utility token. Security tokens are used to raise funds for the project development and the utility token is to serve the network.

The main purpose behind this type of dual token system is to help projects become more complaint with regulators.

Dual token sales are new type of funding options where one token Is designed to raise funds and other as utility. There are many projects adopting this type of model including a very popular project MakerDAO.

What Was The Problems ?

In 2017, crypto market exploded and the main way to raise funds for the project development is to issue tokens and making them available to the investors. This type of process is known as ICO (Initial Coin Offering) and there are multiple voids seen by the regulators.

As US securities and Exchange commission was issuing warnings to the projects and shutting down crypto projects.

Solution

Now the crypto industry has to react against regulators and has to solve this problem. So the crypto industry comes with the solution to the impending regulations and legal actions, new token models were being experimented such as Simple Agreement For Future Tokens (SAFT), Security Token Offering (STO) an Dual Token Sales (DTS)

The Startups were adopting Dual Token Sales method to raise money while avoiding the wrath of regulators.

Some Projects Using Dual Token System

As I already mentioned, lots of projects are adopting Dual Token Sales system, some of them are emerging and some of them are already well established. Here we'll take on some of the projects adopting Dual Token Sales method.

MakerDAO

MakerDAO is one of the best example to explain dual token sales. They've two tokens, one is MKR and other is DAI. MKR is a governance token of the MakerDAO platform which helps other token DAI for price stability, which is a stablecoin.

The mechanism is, if the price of DAI stays equivalent to the one USD, the MKR tokens are destroyed and it benefits the the MKR holders due to the smaller supply of MKR tokens. And opposite to that if the price of DAI fluctuates far from one USD, then MKR tokens are created and MKR holders has to deal with increased supply of MKR tokens. MKR token holders also get the right/ power to vote on the changes in platform.

The Future

While finding the solutions to the legal actions of regulators, many methods are experimented and many are still in experiment. Will dual token sales method stand against them ? Well no one can actually tell that.

But till now, none of the blockchain project wich adopted dual token sales method were not shut down by SEC. And MakerDAO shows many uses of dual token sales method beyond only dealing with regulations.

At this stage the future of Dual Token Sales method is neither dark nor bright, but it's actually helping lots of projects keeping them away from regulators.


So friends this is it from my side on Dual Token Sales method, hope you enjoyed article.

Please share your feedback about this article, cause your feedback counts. If you like to get notified for my future articles please subscribe me.

Thanks for your time and appreciation...!!

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Comments

I am slowly begining to understand tokens. This article is really helpful. Though I'll have to read it over again. Thank you.

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2 years ago

You're welcome @Leo_kitti

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2 years ago

Thanks for it. It really helpful for my research. ๐Ÿ˜Œ

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2 years ago

Thank you for the information. Nice article. Keep writing articles such as this. God bless

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2 years ago

Thank you very much @DreamBig

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2 years ago

You are very welcome

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2 years ago

Wow thanks for sharing this helpful and educative article

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2 years ago

Wow. So many things to learn. Thankbyou for sharing this

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2 years ago

You're welcome@Yayaya13

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2 years ago

Thanks for this article gaining more from you

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2 years ago

Really need more more articles like this๐Ÿ˜thank youuu! More please!

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2 years ago

Yeah !! @Lejay28 ๐Ÿ‘

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2 years ago

Thanks for explain it so well..Well done๐Ÿ‘

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2 years ago

You're welcome and thanks @kFatema

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2 years ago

Thank you very much dear friend for explained it to me.

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2 years ago

Thanks for this kind of articles I appreciate your work welldone

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2 years ago

It's a bit of an information overload to me lol! But, it's becoming easier since this is actually my first time hearing about this!! Gonna read more of this before I get to actually have a continuous and informational conversation with you :D still thanks by the way! It had peaked my interest!

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2 years ago

Glad to hear that @Lynden25 and liked your approach toward things.

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2 years ago

Itโ€™s really a good article ๐Ÿ’“๐Ÿ’“

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2 years ago

It's future is not dark and also not bright.But I think every new things launch need to take a risk.It's necessary,,,

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2 years ago

Very well said @Hiyamoni123

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2 years ago

Thanks dear @Ashma,,,

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2 years ago

What do you do for a living? It seems that you work in the same field given your knowledge

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2 years ago

Yeah, I'm emerging blockchain developer and also a crypto follower since 2018

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2 years ago

Do you invest too?

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2 years ago

Yes, I invest in 3-4 coins & Projects

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2 years ago

So cool

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2 years ago

๐Ÿ’ฏ

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2 years ago

Very well explained as always.

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2 years ago

I think I finally understand what these are, although it will take a few more reads to funnly grasp it.

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2 years ago

I'm glad to hear that @Ozzyy

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2 years ago

'Theta Network' also has the same dual token system as you have mentioned in an article..actually so many scams were running around Crypto ICO during 2017-18 so it was need of the time to regulate issuing token sales as it is being considered as legal tender from company if label as Security Token.

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2 years ago

Yes, there are also Theta & Tfuel, I'm I right ? Actually I'm confused in Tfuel ?๐Ÿ™„

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2 years ago

Yes you are right..Theta token were issue in private sale and can be 'Stake' on the network. While Tfuel token is function as utility token and serves the network. Tfuel token generated by Staking theta token.

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2 years ago

Yeah, thanks for the information @CryptoSmart

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2 years ago

Dual token sales provide better services for users. I like this new model ๐Ÿ˜Œ

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2 years ago

Yes, and projects gets a safe passage through regulators like SEC.

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2 years ago

Thank you dear it is very helpful and Informational. And thank again explain with me and other members.

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2 years ago

Great and informative article. Keep it up

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2 years ago

Nice article

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2 years ago

This is an informative post, Keep doing it. Thanks a lot.

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2 years ago

This is really nice. Thanks for making this easy to understand.

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2 years ago