The liquidity offered by the token model means that early VC/hedgefund backers often get heavily discounted tokens in the presale, and can then turn round a month or two later and dump a portion of their tokens on public investors for a sweet profit or to mitigate their own risk.
The effect was attenuated in this case by the success of the project, however in lower performing ICO's like Kik's Kin, where the market price is 50% of public sale price or less, big early investors dunking on public token sale participants feels pretty wrong.
In addition to this, VCs are also often playing a role in promoting public sales shortly after their own pre-sale investments, without disclosing their own discount or terms of obtaining tokens. Its kinda like telling people to buy a bunch of stock at $10 when you bought all yours last week for $5 and you're keen to dump a portion of them for $15.
It may be legal, you may think it's their right, and to be fair there is risk involved in being an early backer in a potentially failed project, however it is something to think about.
Polychain did this with 0x project: https://www.reddit.com/r/0xProject/comments/6w3zv0/0x_being_...
The effect was attenuated in this case by the success of the project, however in lower performing ICO's like Kik's Kin, where the market price is 50% of public sale price or less, big early investors dunking on public token sale participants feels pretty wrong.
In addition to this, VCs are also often playing a role in promoting public sales shortly after their own pre-sale investments, without disclosing their own discount or terms of obtaining tokens. Its kinda like telling people to buy a bunch of stock at $10 when you bought all yours last week for $5 and you're keen to dump a portion of them for $15.
https://medium.com/@rzurrer/raiden-fundamental-infrastrucutr...
It may be legal, you may think it's their right, and to be fair there is risk involved in being an early backer in a potentially failed project, however it is something to think about.