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Blockchain start-up Block.one raised $4 billion

A Cayman Islands start-up has raised $4 billion as of Thursday, eclipsing the world’s biggest initial public offerings on stock exchanges this year. But its flagship product is not even live yet.

Headed by 31-year-old Hong Kong-based CEO Brendan Blumer, Block.one is funding its blockchain platform called eos.ios through a process known as an initial coin offering, or ICO. Its multibillion-dollar fundraising effort more than doubles the next biggest offering of that type. But investors still don’t know how the majority of that capital will be used.

The startup raised the money by auctioning off 2 million of their EOS tokens every 23 hours at an accepted high bid, totaling 900 million tokens sold since the auctions began on June 26, 2017.

Unlike an IPO, which gives investors stock ownership in a company, an ICO gives out tokens whose use case is based on a promise the platform will be useful in a digital network once it gets built.

Participants in the ICO used cryptocurrency ether instead of U.S. dollars in exchange for the new eos tokens. The fundraising brought in 7.12 million in total ether as of Wednesday night, according to Token Report, a division of blockchain advisory firm New Alchemy. At Thursday’s U.S. dollar exchange rate of $576 per ether, the ICO has brought in the equivalent of $4.1 billion. This amount could change depending on the price of ether once the sale closes.

The eos system, according to its founders, will support more efficient operations for “decentralized applications” than existing platforms such as ethereum. If eos.ios is successful, advocates say it could bring on much greater adoption of cryptocurrency-related technology. But they still have a lot to prove when the product goes live June 1.

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