ICON’s price, and its reputation, took a bit of a battering this week, as it remained silent on the mystery 18% rise in circulating supply that got investors talking and the rumor mill going. Official news from ICON has been thin on the ground since the event a month ago, leading to speculation and angry investors clamoring for information, while what responses have emerged have been less than satisfactory.
The 73 Million Tokens Puzzle
The confusion started when ICON holders found that the circulating supply appeared to have jumped 18% overnight on October 16. Confusion reigned for several days as investors sought an explanation from the team as to what had happened. Various conspiracy theories were inevitably being thrown about, ranging from an unannounced airdrop to a whale shipping out a Lamborghini’s worth of tokens. These conspiracy theories eventually morphed into other concerns about ICON’s $5 million token buyback program, development delays, and yellow paper update, showing that behind all the partnerships ICONers were not a happy group.
Lack of Clarification
ICON failed to respond for two weeks, until eventually fan site The ICONist published their own explanation for the increase. They stated that the pump was due to various parties within the ICON ecosystem requiring payment via ICX tokens that came from ICON’s wallet and was therefore added to the circulating supply, all of which was stipulated in the whitepaper. This didn’t seem to appease all investors however, with accusations of large volume sales still doing the rounds, resulting in a Reddit post by Markus Jun, Head of Research at Deblock, ICON’s VC and Accelerator Partner Wednesday.
If investors were looking for further clarification on the circulating supply increase however they were to be disappointed, as the post instead detailed the need for the ICON team to have a long-term view of the project, though it did call for better communication from the ICON team, which seemed something of an understatement.
Public Relations 101
An official response finally came Thursday, which sought to put to bed once and for all the rumors that had swirled around the project for over a month. In the response ICON confirmed the supply increase was due to token distribution as outlined in the whitepaper, addressed the other community issues, and announced a new addition to the team. This response seems to have quelled the mutiny, but ICON should not have let it get that far.
While the entire incident is suggestive of nothing more than a communications error rather than anything malicious. It does go to show how quickly FUD can spread and how projects need to be on hand to deal with such issues to avoid rumors doing damage to their price and reputation.
