Many retail investors are trying to pursue the high returns that can be achieved when buying assets through a public sale, whether in the form of a crypto-based initial coin offer (ICO) or during an initial public offering (IPO) of a stock. exchange. While acquiring assets once they are made available to the public usually proves to be a great buying opportunity, the average returns for ICOs and IPOs on investment pale in comparison to the returns generated in private markets.
Retail investors haven’t had convenient options to access private equity yet – enter pre-purchase
To get a sense of how much disparity there is between private and public markets, we’ll use Facebook as an example. The social media giant opened public trading in 2012 with a share price of $38. In the nearly decade after its IPO, Facebook’s stock increased 825% (at current market prices). Great return by any means.
However, the more than 8-fold increase in value is virtually nothing compared to the impressive 10,000-fold price growth the company experienced between the Series 1 funding round that led to its initial public offering, according to data provided by EquityZen. Other tech giants, such as Twitter, Google, and Spotify, have also seen a large percentage of their growth during the pre-public phase.
The unfortunate truth is that acquiring a share of stock during private investment rounds is nearly impossible for ordinary investors. Access is mostly restricted to venture capitalists, family offices and accredited wealthy investors. Enter prePO.
prePO is a decentralized trading platform that aims to democratize access to pre-public trading procedures, whether it is a pre-IPO company or a pre-token blockchain project.
How does pre-purchase work?
prePO (short for “pre-IPO”) leverages the capabilities of Ethereum Layer 2 scaling solutions to achieve high transaction speeds at low costs, while maintaining a high level of security. Pre-purchase synthetic markets allow everyone to predict the expected initial public value of a particular company or crypto project.
The prePO protocol allows users to enter so-called “long” or “short” positions in companies prior to the public, including SpaceX, Gemini, OpenSea and many others.
As mentioned before, users can decide to take the trading route, setting parameters on their long or short orders, or take a less volatile approach to providing liquidity to the synthetic markets. Liquidity providers (LPs) are compensated for their services with various types of rewards, ranging from bonus farming benefits to PPO token incentives. Since all pre-purchase synthetic assets are based on the ERC-20 standard, new features such as multi-tier staking rewards and loan guarantees can be easily added.
The soon-to-be-released PPO token (original pre-purchase governance code) will allow holders to participate in the platform’s governance system. One of the most exciting features that the token offers is the ability for PPO holders to vote on any new private company or blockchain project that should be added to the list of available pre-purchase marketplaces.
The interactive prePO Simulator allows you to explore the platform’s potential
If you are interested in what prePO is building, you can check out the prePO Simulator, which allows you to learn about the capabilities of the platform and see the differences between different synthetic markets.
The free simulator is intended to provide an overview of the pre-purchase functions, such as knowing how bonuses are calculated and the characteristics of a trading position depending on the “trader” or “LP” options chosen, and how they vary with changing parameters.
prePO embarked on ambitious goals in the next two months. By the end of this year, the company plans to launch a beta version of its products and services, launch a governance system as well as a testnet beta, and launch a PPO token.
Andrew is a writer who does most of his work on cryptocurrency related topics. While he is primarily interested in bitcoin, he also follows major cryptocurrencies and innovative ideas that new crypto and blockchain projects are bringing to the table.