Morgan Creek Capital Management has ruled out XRP, Tron, XLM, NEO and more from its new Index Asset Digital Sub-Fund. All coins with a premium of more than 30% have been excluded: but what is the problem?
Big Business Frowning on the Big Premins
Morgan Creek Capital Management has more than $ 1.5 billion in assets, so its Digital Asset Management Fund is significant as well as the decision to rule out any cryptocurrency with more than 30% of pre-eminent.
This is bad news for Ripple, who essentially pressed all 100 billion XRP tokens. This is a problem for Morgan Creek.
Tron followed the same approach and pressed 100 billion TRX coins. It is said that the founder and CEO Justin Sun contains billions of coins.
NEO has issued 100 million tokens at the outset and there will be no mining process, which is a simpler version of the same problem with regards to the Digital Asset Index Fund. concerned.
Pump and Dump could Rock The Market
It does not take a huge leap of logic to see that 62 billion XRP or TRX coins that affect trade could massacre the price. While it might seem counterproductive for a company to sabotage its product, could happen . If the coins are at historic highs and the main holders simply want to cash in, this could have a real impact on the price and progress of the currency. This type of landfill could also come from outside.
The risk for Morgan Creek analysts clearly exceeds any potential reward.
The long and overwhelming story of Jed McCaleb, Ripple and Stellar (which is essentially a fork of the Ripple technology) involved more than one occasion when the ownership of XRP was discussed, the participants made statements considered to be incendiary, tokens were frozen, and there were also suggestions that McCaleb would simply sell – which caused a crash in
This presents two problems:
An opponent token and founders at war have the potential to influence the market price of XRP.
Free trade is a real concern if Ripple can and will freeze XRP to avoid what they perceive to be market manipulation.
Tron has been involved in his own scandals, although an independent investigation has cleared Sun after he was accused of selling 6 billion TRX coins at the height of the crypt of cryptocurrency.
Bitwise Asset Management will manage the index for Morgan Creek, and co-founder Hunter Horsley said, in what could be considered a masterpiece of understatement:
" Decentralization is a cornerstone most of the blockchains a large part of the centrally held assets are at odds with that and could create complexities that differ from what would be expected from public blockchain.It is not sure, it is only a potential risk. "
# 39; is a Premine?
Premining is the process of creating coins before the cryptocurrency is released to the general public. This allows developers to assign coins to themselves and investors. Basically, it's not a million miles away from stock options that have always been an integral part of start-up businesses.
But in the hyper-inflated ICO market that preceded the current, more thought-out sphere of cryptocurrency, this has led to founders like Chris Larsen of Ripple Labs suddenly are richer – on paper – than all but a handful of people on the planet. And this before Ripple also had a product with great adoption.
The oversized problem becomes even more disproportionately harmful when we try to integrate that bubble mentality with an open market.
Morgan Creek believes that this creates conflicts of interest and leaves the market open to manipulation.
So, he excluded any coin with a premine of 30% or higher because of the additional risks, which leaves XRP in the cold. The fund will also exclude Lumen, NEO and EOS. Thanks to a 17% premine, Ethereum slips under the radar and will be included.
XRP In The Wars
It will be a bitter pill for XRP in particular, as Ripple Labs aimed firmly at the financial sector with its blockchain technology. The XRP was largely considered the "banking currency" and for a long time it was seen as the currency that would legitimize cryptography.
Although today's decision does not, at first glance, have anything to do with the SEC's potential security or other classifications, it is more bad news for a token that attracts more than its share.
Ripple Labs was even charged with securities breaches after presumably promoting XRP as a vehicle investment. Although Ripple has taken significant steps to distance itself from XRP, it faces a series of lawsuits and could have a serious impact on the cryptocurrency ecosystem as a whole.
At a time when cryptocurrency and blockchain technology is approaching the turning point towards mass adoption, Ripple Labs and other XRP owners have been watching from the sidelines. Now they are united, in the eyes of Morgan Creek, by the likes of Tron, NEO and EOS.
Is it a coin disaster? Maybe not, but it is certainly a warning to other start-ups who are contemplating the great premines. It simply does not send the right message to the financial world and it could cost dear at the end.
The author is not currently invested in digital resources.