Blockchain data storage network Filecoin has officially completed its initial coin offering (ICO), raising more than $257 million over a month of activity.

Filecoin’s ICO, which began on August 10, quickly garnered millions in investment via CoinList, a joint project between Filecoin developer Protocol Labs and startup investment platform AngelList. That launch day was notable both for the large influx of purchases of Simple Agreements for Future Tokens, or SAFTs (effectively claims on tokens once the Filecoin network goes live), as well as the technology issues that quickly sprouted as accredited investors swamped the CoinList website.

Today, the ICO ended with approximately $205.8 million raised, a figure that adds to the $52 million collected in a presale that included Sequoia Capital, Andreessen Horowitz and Union Square Ventures, among others.

Combined, that total represents the largest completed ICO figure to date, surpassing the $232 million raised by Tezos earlier this summer in a sale that catered to retail investors as well.

The dizzying first day eventually gave way to slowing investment activity, though purchases over the several-week period ultimately pushed Filecoin’s take above $200 million. Social media posts suggests that the past three days saw that figure rise by roughly $3 million.

Filecoin aims to provide a decentralized network for digital storage through which users can effectively rent out their spare capacity. In return, those users receive filecoins as payment.

The completed raise puts September on the path of being one of the busiest months for ICOs, according to data from CoinDesk’s ICO Tracker. To date, July 2017 saw the most sales volume, recording more than $500 million.

The second quarter of this year as a whole saw a record-breaking level of activity, with approximately $797 million raised through the funding model during that period, according to the latest State of Blockchain report.

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Protocol Labs and invested in the Filecoin pre-sale.

Image via Shutterstock

Now that the frothiness seems to be coming out of the art-collectibles-gaming corner of the crypto space, it’s probably a good time for the non-fungible token (NFT) industry to focus on fixing some of its core issues.

We previously reported on how the underlying content in NFTs (the image or the music or the video of which a token ostensibly proves ownership) isn’t always stored reliably. “I always tell people there are two major points when launching a NFT project: own your smart contract and know where your NFT metadata lives. If any one of these platforms die, you don’t want your token to disappear,” Carolin Wend, chief operating officer at Mintbase, told CoinDesk by email.

This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here. 

Conscientiousness about the persistence of NFT content has grown but there’s still not a clear best practice in the industry. There’s no easy way for a buyer to verify his or her NFT content will persist into the future, and there should be.

In the analog commercial space there’s a long history of self-regulating industries that help users feel good about the things they buy. For example, an Underwriters Laboratories seal on an electronic product shows it has been checked against reasonable danger of shock and fire. Various consumables opt to be certified as Fair Trade or Organic.

Digital art and collectibles need some sort of Authentic & Persistent Data Certification. A seal that could be posted on NFT marketplaces to show that a given NFT has stored its data in a way that will persist predictably for some reasonable length of time, or that gives the user agency in further ensuring the underlying data will continue to exist.

There are two issues here: the existence of the data and verifying its authenticity.

As Kyle Tut, CEO of Pinata, a firm working on NFT storage, put it in an email, “The value of an NFT doesn’t start with persistence, it starts with authenticity. A counterfeit Nike sneaker can persist for just as long as an authentic Nike sneaker can.

Why this matters

If you already understand this issue, you can skip this section.

Imagine that I make some great drawing and I sell an NFT of a PNG file that shows the work on the OpenSea marketplace. Now, imagine the place where that image lived was on the CoinDesk website, such as at coindesk.com/bradysgreatdrawing.jpg.

Like any NFT, mine would have a TOKENURI field, but if the only documentation I left of my brilliant creation was that web address, my buyer might be in trouble.

If he loved it so much that he downloaded the file to his computer, would his (very wise) investment be safe?

Not really.

Imagine our IT team finds that drawing and thinks: “Why the heck is Brady storing his drawings on our servers?” And they delete my masterpiece! Rude, obviously, but not unreasonable.

The downloaded copy isn’t that helpful. All you’ve got is a web address, so how could you prove to the teeming masses of Brady Dale art fans who want to buy it later that your downloaded file was that drawing on your computer? The only proof you have is a URL that doesn’t work anymore.

So it’s not enough to store a copy. You need to prove the copy is authentic.

Fortunately, cryptography provides a solution for this. It just needs to be used. The solution is called hashing.

How the standard would work

It’s fairly easy to take a piece of data and run a cryptographic hash on it that spits out a string that will always correspond to just that one chunk of data. So if someone makes a copy of any file and doesn’t change it in any way, each copy will spit out that same hash when checked with the same hashing function.

So all someone needs to do is put that hash into the NFT metadata and you can forever prove that copies of a file are authentic. You’ve got a way to say, This is mine.

It's not enough to store a copy. You need to prove that the copy is authentic.

Or maybe not forever? Tut wrote, “We think creators and collectors should have the opportunity to define how long an NFT should persist. NFT persistence isn’t just zero or one. It can also be everything in between.” Just like copyright isn’t forever (though Disney has certainly tried to make it so).

On the Clubhouse audio chat app Thursday, participants from organizations like the NFT marketplace Rarible, decentralized storage startup Filecoin, digital art company Asynchronous Art, the decentralized web services provider Fleek and others discussed this issue of persistence and how the industry could collaborate to solve it.

“The call was pretty productive,” said Harrison Hines, the founder of Fleek, told CoinDesk. He felt folks were coming to consensus that the Interplanetary File System (IPFS) would be a good way to standardize authenticating content with its hashing functionality, while still allowing flexibility around storage.

He also said the Clubhouse participants discussed a “Data DAO” model to check that NFTs are stored on one or more trustless storage networks. This could be a good way to run some kind of “Certified Authentic & Persistent” seal.

Wend said Mintbase has been working to inspire confidence by showing an Arweave logo on all its NFTs. Arweave endows files to be stored forever, and the logos link to a copy of the file on that permanent storage system.

See also: Mark Cuban on Bitcoin, NFTs and What Comes Next: ‘The Upside Is Truly Unlimited’

There’s a website that lets users check NFTs to see if they are safely stored, but it’s still new and developing. That said, its existence helps push for some kind of unified thinking here.

Now that the pressure is off to mint every possible NFT imaginable in hopes of a giant payday, the industry has an opportunity to come to consensus about what boxes an NFT needs to check in order for trustless authentication of digital property to be trustworthy over time.

Authentic & Persistent Data Certification is a natural solution that would be simple enough to implement online, and it would benefit the entire space.

Messaging app Telegram is close to fully repaying investors in its TON blockchain effort nearly a year after settling allegations it violated U.S. securities law in raising over $1 billion for the project. Its next step might be an initial public offering (IPO).

On Monday, Russian newspaper Vedomosti reported that Telegram is preparing to launch an IPO in 2023, aiming for a $30 million to $50 million valuation, according to a source close to the company’s team. The IPO will benefit the buyers of Telegram’s bonds, which the company sold in February to raise $1 billion.

The debt sale, in turn, came right in time for earlier Telegram investors’ pay day, as the company is closing the book on its $1.7 billion token sale three years ago. According to Russian publication The Bell, Telegram started to pay back the last investors who didn’t withdraw their investments right away in 2020.

Two sources familiar with the token sale confirmed to CoinDesk that the process had started. According to one of them, non-American investors lent Telegram $500 million to $600 million back in 2019 following the news the company no longer planned to launch TON.

The ICO that went awry

Last May, Telegram announced it discontinued the work on its TON (Telegram Open Network) blockchain project. The project started in 2018 with much fanfare, secretly raising $1.7 billion from qualified investors and pledging to develop a proof-of-stake blockchain with a native token. Telegram planned to build TON into the messaging app, potentially exposing some 200 million (at the time) Telegram users to TON’s native crypto token, gram.

The project attracted prominent investors from all over the world, including funds Sequoia, Ribbit Capital and Lightspeed Ventures, plus Russian oligarch Roman Abramovich and former Russian government member Mikhail Abyzov.

However, right before the planned launch in October 2019, the U.S. Securities and Exchange Commission (SEC) sued Telegram, saying the company had been struggling financially and was planning to issue unregistered securities disguised as utility tokens to fund its operations. The legal battle essentially lead to Telegram shutting down the project in May 2020 after striking a settlement with the SEC and agreeing to pay $18.5 million in penalties and return the money it raised.

The project was open source and later launched independently without Telegram’s involvement, at least officially.

After shutting down TON, Telegram offered investors to either take 72% of their money back right away or lend the funds to Telegram for one year and get back 110% in 2021 – the latter, however, was not available to U.S. investors. Back in 2019, some investors hoped that at some point they could get paid back in Telegram’s equity (and invested in TON as a proxy for Telegram’s equity), they told CoinDesk, but Telegram quickly made clear that splitting ownership was not on the table.

“Telegram may need to sell some equity later to get the money to repay the loan, but repayment in equity was not offered as an option,” Telegram’s spokesperson told CoinDesk at that time in an email. Apparently, instead of the equity sale, Telegram ended up doing a bond sale to pay back gram token buyers.

The IPO will be a different situation compared to Telegram giving out equity to TON investors back in 2020, a source close to the project told CoinDesk. The difference is that the IPO, supposedly, will give shareholders less control over Telegram. Telegram founder Pavel Durov is said to be famously allergic to the idea of sharing Telegram ownership with anyone after the dramatic fallout with shareholders of its previous project, the social network Vk.com.

“If you let in investors with a big share and active attitude, they would obviously try to control the company,” the source said.

BitRiver, a key player in the Russian cryptocurrency mining market, aims to raise up to $35 million by selling tokens that entitles holders to space in its data centers.

The company, which operates several mining farms in Siberia for 150 megawatts in total, would use the proceeds from the sale to open more such facilities. The token runs on the Ethereum blockchain, the main launchpad for fundraising tokens since the heady days of the 2017 initial coin offering (ICO) boom. 

While ICOs have largely faded, BitRiver’s token offering, announced Monday, is one of several to hit the market this year tied to the mining sector. 

In late March, Blockstream launched a token representing the value of hash power at Blockstream’s mining facility and offered buyers an indirect exposure to bitcoin (BTC, +1.01%). Tau Protocol recently launched a token pegged to bitcoin hashrate and backed by Genesis Mining, Binance Pool, Atlas Mining and others.

BitRiver, however, takes a different approach. Instead of indirect exposure to bitcoin, it offers clients a form of tokenized contracts for mining services, with a bonus income in tokens.

“It’s a utility token and it ideally fits our goal: to raise funds from people who will be using our future infrastructure,” BitRiver CEO Igor Runets told CoinDesk.  

More farms in Siberia

BitRiver, registered in Gibraltar but with a home base in Siberia, operates so-called mining hotels, or data centers for miners who place their ASICs there. Clients pay for the units of power their equipment uses to mine crypto, with the price including other expenses like machine maintenance. 

The demand for BitRiver’s services has been significantly exceeding the company’s capacity, Runets said. In addition to the main data center in Bratsk, the company has several smaller venues that together comprise 50 more megawatts, but that’s still much less than prospective clients want, Runets said.

“We now see demand for 400 megawatts of power,” he said. “It’s a huge amount of construction work. We’re now looking to buy more land, buildings [and] start to build more data centers.”

Investments for that, as Runets expects, will come from the token sale. BitRiver is aiming to sell 100 million tokens for more than $35 million. 

The demand for BitRiver’s services comes mostly from Asia, Runets said, especially from China, South Korea and Japan. BitRiver even opened an office in Seoul earlier in April to cater to that region, and the token sale will be on the Korean exchange Bithumb. 

Growing demand has been also coming from Persian Gulf countries, namely Qatar, Saudi Arabia and UAE, Runets said: “Over the recent months, the market there has been growing, people have a lot of money to invest, and the surging price of bitcoin drew attention [to mining].”

Some of the expansion has been ongoing. BitRiver recently founded a joint venture with a Russian hydropower giant En+ to build a new mining venue of 10 megawatts. According to Runets, that farm is now operational. 

Another venue, of 100 more megawatts, is currently under construction in the special economic zone of Buryatia, Russia’s East Siberian region on the border with Mongolia. In the neighboring Krasnoyarsk region, BitRiver will arrange another venue using the building of an electric boiler now rarely in use, with a ready-to-use capacity of about 82 megawatt, the token sale white paper said (read the white paper at the bottom of this story).     

Read also: Bitcoin Mining Farms Are Flourishing on the Ruins of Soviet Industry in Siberia                                                                                                                                                                                   

Mining tokenomics

The BTR token sale is set to go live on April 19 on Bithumb. BitRiver is planning to sell 100 million tokens with a price starting at 35 cents. Each token would provide a buyer with an allocation of 1 watt of power for a full year. Given that there is on average 720 hours in a month and 8,640 hours in a year, one kilowatt-hour would cost 4 cents to a token holder.

Token holders will be able to get their ASICs installed and serviced in BitRiver’s warehouse in three months upon purchase. Users will also be able to pay up to 10% of their bills to BitRiver in tokens, and have their ASICs repaired for free in that case. 

The company will also pay bonus tokens to the token holders, at a rate of 10% per year, using its own stash of 65 million tokens that won’t go into public circulation. In another step to make BTR attractive, BitRiver promises to buy back all the tokens by April 12, 2026, at the nominal value of 0.3504 USD per token.

BitRiver is not limiting the offer geographically, unlike many token issuers that would wall off American users to avoid running afoul of the U.S. regulators such as the Securities and Exchange Commission (SEC). Blockstream, for example, restricted its token sale to non-U.S. qualified investors. 

Runets explained that, as BitRiver isn’t selling the tokens directly, it’s up to Bithumb to run due-diligence on potential buyers. 

Crypto regulations in Russia have been in flux recently, with a crypto taxation bill currently awaiting passage in the national parliament. The uncertainty led many of BitRiver’s clients in Russia to establish foreign legal entities and operate through them, Runets said. 

However, when asked about potential regulatory risks for a large-scale mining farm construction, he sounded moderately optimistic: “We don’t see any prerequisites for an all-out ban,” he said. 

Read also: Over 50% of Binance’s Russian Customers Believe Crypto Can Replace Bank Deposits