Ripio Credit Network extends token lock-up for 12 months

  • Blockchain , P2P Lending
  • 22.02.2019 10:03 am

Global peer-to-peer lending startup Ripio Credit Network (RCN) has announced plans to extend its token lock-up for another year, joining a growing list of established crypto companies implementing this strategy to better handle the current “crypto winter”. The startup, which raised $37 million in late 2017, believes extending the lock-up represents the best way to protect its mission and token value over the long-term.

RCN is on a mission to seize blockchain technology’s potential to create efficient, scalable and borderless debt markets connecting borrowers and lenders all across the globe. The company is one of only a few ICO-funded projects in the world to have already delivered a working financial product with real users. Meanwhile its parent company Ripio’s crypto wallet currently has over 250,000 users across Argentina, Brazil and Mexico.

The current bear market, which is close to being the worst “crypto winter” in history, has led other major crypto players to extend their lock-ups as well, in order to protect their investors. For example,  Polymath has locked up 75 million tokens worth about $9 million for the next five years. KuCoin has extended its lock-up period for tokens held by angel investors and founders by 12 months as well. And Storj has extended its lock-up multiple times, most recently implementing an eight-quarter rolling lock-up. In this context, RCN has decided that 364,800,000 of its tokens (whose total supply reaches 999,942,647 units) will remain locked up for another 12 months to protect the project’s potential.

According to research from ICOrating, half of the ICOs funded by institutional capital during the second quarter of 2018 had no lock-up period for their tokens. But distributing tokens to team members immediately after an ICO can crash the token’s price and make it difficult for investors to generate a return on their holdings, the report says. Similarly, many investors were in turmoil after Elastos prematurely ended its lock-up period,  with many accusing the company’s founders of fraud. The extended lock-up from RCN is intended to prevent such negative consequences, to better align its team’s incentives with those of its token holders and to emphasize the long-term potential of the token beyond the current bear market.

“Keeping a portion of our tokens locked up for another year is meant to have a long-term positive impact on RCN’s value. We believe the extended lock-up is a sign of our maturity and a pragmatic step to protect the ROI investors hope to achieve through our tokens,” RCN CEO Sebastian Serrano said. “Despite the current downturn, cryptocurrency holds tremendous potential, especially in places like Latin America which have a long history of economic mismanagement. Our adoption has been growing steadily over the last five years. This extended lock-up will ensure the short-term winter doesn’t hinder the long-term upside.”

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