The ICO boom that took place on the crypto market in 2017-2019 was remembered by many. At this time, a huge number of token sales were held, which became unprofitable for investors. Many promising projects at the token sale stage are not developing today, others are developing too slowly. According to statistics from 2021, 95% of 2017-2019 ICO tokens lost 80-98% in value compared to the initial mark. Investors dream of returning at least part of the funds invested in projects and … they have such an opportunity.
Just the other day, the Global ICO Insurance System (GIIS) compensation program was launched based on the multi-financial broker LH Crypto. The purpose of the program is to compensate the investors of unprofitable projects for the funds spent. A compensation is not possible for all projects, but only for those that meet certain criteria. There are also criteria for the program participants themselves.
For those who meet the GIIS criteria, the compensation value is calculated for each token and offers two options to choose from:
● Base. The compensation is equal to 100% of the calculated amount. Reimbursement period – up to 1 month. The transfer of tokens to the broker is not required.
● Eco. The compensation can be over 100% of the amount. The time period is 12 months. The transfer of tokens to the broker is required.
Both options require passing the KYC with LH Crypto.
The main requirement that GIIS makes to the issuer and the tokenholder is that neither one nor the other should be under the jurisdiction of the United States. A coin holder wishing to receive compensation will have to confirm their place of residence during KYC. One also has to confirm that he/she had invested at least 250 euros in the project.
The project must also confirm that at the time of the completion of the ICO, its capitalization was at least 1,000,000 euros. In addition, the token must be listed on at least one crypto exchange. The factoring department of LH Crypto conducts its own expertise for each issuer and decides on the compensation for holders of certain tokens.
At the moment, GIIS is working with several projects: for tokens of REcoin, LUST and CNK the compensation amounts have already determined, the EBZ token is under consideration.
Participation in the program is free and both coin holders and project owners can apply. For the latter, it is a good chance to reduce their reputational losses, as well as to support their project despite the initial difficulties.
GIIS is the program that the holders of “junk” coins have been waiting for. The emerging DeFi market offers dozens of different risk insurance tools that weren’t available a few years ago. The ability to offset costs, give new life to once-promising projects with good ideas, and support token holders and coin creators can breathe new life into the already forgotten ICO market today. At the same time, only those whose projects are really interesting and worthy will be compensated for the cost of coins. And in order to calculate the cost of the compensation in the factoring department of LH Crypto a formula has been developed that takes into account both the current exchange value of the asset and its price at the time of the public sale.
The amount payable to the holder is calculated according to the formula:
(IP-CP) * T, where
IP – is the ICO token price, CP – is the current exchange value of the asset, T – is the number of tokens held by the holder.
● For example, at the time of the ICO, the token cost 0.10 EUR.
● Now its value on the stock exchange is 0.05 EUR.
● The token holder has 1000 units of that token.
● The compensation will be (0.10-0.05) * 1000 = 50 EUR, which in this case is 50% of the funds initially spent.
However, GIIS provides users with the opportunity to get more – this is precisely why two programs are being implemented: Base and Eco.
By default, the base program GIIS Base is applied to each user. It implies a 100% guarantee of a refund immediately after the identification of the token holder, which takes about a month.
If for a specific project there are many applications from users (in total for a million euros or more), then the GIIS Eco program is initiated – it implies the transfer and freezing of user tokens for 12 months, but as a result, the compensation received can be significantly higher than with the basic program. This is due to the fact that a full-fledged ecosystem for this specific token is created in GIIS Eco, including listing, implementation of payment instruments and other time-consuming actions.
The token holder independently chooses which program he/she wants to receive the compensation under; this choice must be made within a month after the identification. Large investors (with a deposit of 1000 EUR) are allowed to receive a personal advice from GIIS specialists.
LH Crypto’s Global ICO Insurance System is a fresh and promising solution that can reduce risks for both token issuers and investors. Two compensation programs allow you to choose between the speed of obtaining the “insurance” and the amount of profit. As for the advantages for the projects themselves, such a system will provide significant assistance in preserving the reputation and implementing plans for further development. The WIN-WIN-WIN principle provides a win-win situation for all three parties – the issuer, the token holder and the insurer.