AION — the enterprise-focused smart contracts platform — recently released their first AION Foundation Report aimed at providing comprehensive insights into the platform’s development, investments, and direction since the July 2017 ICO.
In light of the extended decline in the cryptocurrency markets, AION’s financials reveal some notable trends that provide some context for the financial runway of ICOs in the broader Ethereum ecosystem.
AION Token Sale and Financial Holdings
AION raised $23 million in a combination of BTC, ETH, and fiat following the completion of their ICO in October 2017. The financial data provided by the AION Foundation is from the end of their token sale until October 31, 2018.
AION was roughly sitting on $14 million in fiat, BTC, and ETH following the token sale after taking into account yearly expenditures, taxes, and unrealized losses on crypto holdings until 10/31/18. Their holdings — not including AION — included approximately $5.8 million in fiat, $6.2 million in BTC, and $1.96 in ETH.
However, since the prices are based on October 31st, their $14 million in holdings have likely decreased substantially after the 40- 50 percent sharp downturn in crypto — more precisely BTC and ETH — that started at the beginning of November and has continued into December despite a recent surge in the markets over the last 24 hours.
AION’s unrealized cryptocurrency losses were $1.9 million while their overall realized gain on cryptocurrency sales was $6.9 million. AION had roughly $7 million in recurring expenditures, mostly stemming from employee compensation, while $1.2 million was spent on non-recurring expenditures primarily resulting from professional services for their ICO.
AION’s financials are consistent with BitMEX’s analysis of ICO downward pressure stemming from the markets price depreciation that concluded many ICOs had reduced their exposure to cryptocurrencies throughout 2018 and were still sitting on unrealized gains back in September when the report was conducted. Interestingly, AION’s BTC to ETH holdings ratio is approximately three to one, which they note is the general ratio that liquidations of BTC and ETH were conducted.
Further, AION’s average realized sale price of BTC and ETH were $8,128 and $572, respectively. The average sale prices indicate that AION likely reduced most of their exposure to BTC and ETH at comparatively much better positions than prices over the last several months, especially the last six weeks of marked decline in the overall market.
However, AION is holding roughly 152 million AION tokens — of which 106,701,150 are locked — and the public investors were released 114,854,074 AION throughout 2018 as the Public Token Release Schedule (TRS) which locked a specified amount of their AION in a smart contract from the sale until November 2018. The Private TRS of the foundation consists of the 106,701,150 tokens which cannot be fully accessed until November 2020 and are also distributed on monthly basis.
While it is impossible to judge what the market price of AION will be by 2020 for Private TRS investors, public investors part of the Public TRS lost considerable value throughout 2018 as the AION price dropped precipitously from an all-time high in January 2018 — of roughly $10.50 — to its price in the first week of November of approximately $0.40.
AION’s current private holdings of their AION token is equivalent to approximately $19.4 million at current prices, with 70 percent locked in the TRS.
AION also allocates AION as a portion of payment to employees as a long-term incentive, the majority of which is dispersed in June and December. It is unclear if the distribution of AION to employees is based on a fixed rate following the token sale.
AION’s transparency initiative is a significant trend for ICO platforms in the industry, and hopefully, more platforms will follow suit.