Token developers are beginning to tokenize themselves on the Ethereum blockchain.
Ethereum Is Getting A Load of Additional Coins
The developers add their names to specific coins that they mint or create which individuals can then use to garner services from the developer in question. These tokens can access content they’ve created, be used to garner advice, or utilize their time for projects. The purpose is to garner additional funds for developers’ services, but it’s receiving a lot of backlash from members of the crypto industry like David Hoffman, the COO of tokenized real estate platform RealT.
Hoffman says that this process is clogging up the Ethereum community. In addition, anyone who buys the tokens in question are purchasing assets that have virtually no real value or use other than to speak with developers, which in the long run, may not present the benefits these individuals are looking for.
Hoffman explains:
These tokens are backed by the reputation of a single individual. It’s the exact opposite of what the whole cryptocurrency industry is about, in which trust is purposely removed. The value of these tokens is collateralized by trust in the individual.
Putting this aside, however, another serious problem stems from the addition of several nearly worthless coins to the Ethereum blockchain, which co-creator Vitalik Buterin has said is already overly stuffed as it is. He commented recently that Ethereum is suffering from a serious lack of scalability, which is resulting in slow transaction times, high traffic, and even higher gas fees.
While he’s hoping the implementation of Ethereum 2.0 could potentially aid Ethereum in the future, additional coins aren’t going to make things any easier for the time being.
The developers creating these coins take issue with certain complaints and believe their tokens serve a valid purpose in the industry. One such developer is Kerman Kohli, who created what’s known as the KERMAN token. He says that the token can be used to access his present group on Telegram, which could ultimately give users access to data and information they otherwise would have never been privy to. They can also access his DeFi newsletter or request his personal time and attention to projects.
Some Are Taking Issue
Kohli also offers a disclaimer regarding his new token, telling investors how speculative it is and that there’s a chance they could lose their funds if they’re not careful. Hoffman takes issue with this disclaimer, commenting:
How risky this investment is, is completely defined by Kerman. In his disclaimer, he says, ‘This is a highly risky investment, and that you could lose all your money,’ which is a terrible thing to say, because with ‘personal tokens’ like these, the issuer is in complete control over exactly how risky the investment actually is. It’s largely up to them as to whether there are risks or not.