Bancor, one of the most successful initial coin offerings in the short history of digital tokens, is proving to be a dud for investors.
After raising $153 million in a matter of hours in June, the Tel Aviv, Israel-based startup — whose market maker-like application aims to facilitate trading in other digital coins — has seen the price of its token decline 56 percent
, one of the worst performances among the 10 largest crowd-funding sales.
Around the time of the ICO, some of the burgeoning sector’s better known developers such as Cornell University’s Emin Gun Sirer started raising questions about the application. Bancor’s formula is less efficient than simply making the market manually, Sirer says. And they say the technology could also be vulnerable to front running, where people make money off of the visibility of others’ transactions.
“They have one idea that by itself I don’t think is sufficient,” Sirer, an associate professor and co-director of the Initiative for Cryptocurrencies and Smart Contracts at Cornell, said in a phone interview from Ithaca, New York. Sirer is an adviser for Tezos, which raised $232 million through an ICO in July.
Source/More: One of the Most High-Profile Initial Coin Offerings Has Crashed 50% – Bloomberg