Poloniex’s New Tron-Powered IEO Platform Moves Exchange Closer to Justin Sun’s Orbit
Poloniex has launched an initial exchange offering (IEO) platform that aligns the exchange more closely with the interests of Tron founder Justin Sun.
Seychelles-based Poloniex – acquired by a group of investors including Sun in 2019 – said Sunday the new IEO platform, dubbed LaunchBase, would serve as a springboard to “help quality blockchain projects grow and further develop their ecosystem.” The IEO platform, together with “launch partner” Tron, will promote user adoption through distributing tokens and professional consultation, Poloniex said in a blog post.
Notably, the exchange said Tron’s TRX cryptocurrency would be the only eligible cryptocurrency for purchasing new tokens on LaunchBase. Further, the first company scheduled for a sale will be the Tron-based stablecoin lending platform JUST.
The blog announcement is unclear whether LaunchBase is exclusively for Tron startups, or whether projects based on alternative protocols are also welcome.
“Huge congrats on launching Poloniex LaunchBase, a world-leading token sale platform! As Poloniex’s strategic partner, Tron Foundation and I will fully support the LaunchBase platform and its future development,” Sun said on Twitter, Sunday.
Similar to an initial coin offering, an IEO is a crowdfunding tool for cryptocurrency startups, with an exchange acting as a trusted broker offering the token sale. The exchange also provides a proprietary token to execute the sale, in this case TRX.
For more on IEOs, check our video explainer.
Poloniex used to be one of the largest exchanges on the block. At one point, 50 percent of all crypto payments went through Poloniex servers. This continued even after payments app Circle bought the exchange for a reported $400 million. By the time the exchange spun out again, it only made up one percent of the total market volume.
Although Sun first denied reports he was involved in the investment group that purchased Poloniex last year, he confirmed it later at an event live streamed on Twitter. It’s unclear who else was in the investment group, or how much sway the 29-year-old Sun has within it.
Sun has a history of taking over distressed companies. In 2018 he purchased the internet file-sharing platform BitTorrent, which, according to sources speaking to TechCrunch, had long been looking for a buyer.
Initial uneasiness about the acquisition appeared to materialize this January when some former BitTorrent employees sued Sun and the new management team for allegedly subjecting them to harassment and bullying for not releasing software updates fast enough.
See also: Poloniex Drops KYC for Withdrawals Below $10,000 Following US Exit
Earlier this year, Sun also bought Steemit, the most popular app on the struggling blockchain-based blogging network Steem. A power struggle between Sun and the Steem community quickly ensued, which eventually led to a community hard fork in attempt to move away from Sun. Both Poloniex and Binance staked tokens in support of Sun, but Binance founder Changpeng Zhao later apologized to the Steemit community for aiding and abetting a “hostile takeover.”
Despite Sun’s claims that Poloniex operates independently to the Tron Foundation, the relationship between the two remains hazy. Sun appears to have active influence over Poloniex, having announced a TRX20 airdrop campaign for Poloniex users during the same speech in which he said he’d bought the exchange.
See also: Fired Employees’ Harassment Suit Against Tron Will Move to Private Arbitration
CoinDesk approached Tron and Poloniex seeking to find out more on the relationship between the two entities, including information on the share of the exchange Sun actually owns. We’d received no replies by press time.