Opinion: Why an IPO will be positive for CNI, the community, and adoption

A budgie was asking me for my thoughts on why an IPO will be positive for Chia Network Inc (CNI), the Chia community in general, adoption & the long term price of XCH so here it is.

(As always not investment advice & all views are my own, not my employers)

First up there has been a lot of noise about CNI funding itself until IPO. See this previous thread for my thoughts on that:

Overall they are doing this to allow them to keep the amazing team they have and keep building so they can get to the IPO.

But what’s so great about the IPO to spend all this time, effort and energy to get there?

There are two main areas I’d like to focus on:

1. Why the IPO is good for Chia Network Inc.
2. Why the IPO is good for the wider Chia ecosystem (and yes, XCH price)

Why is an IPO good for CNI?

1. The IPO will provide immediate cash to CNI via the sale of shares.
2. Once the IPO is done, CNI will have the ability to easily and cheaply raise more money in the future by issuing more shares (see recent efforts from MicroStrategy and Michael Saylor for example).
3. IPO will provide an easy & compliant way for anyone with access to the US shares market (available globally), including traditional finance (who must be compliant) and huge pension funds, to invest & get exposure to Crypto by owning CNI equity (which owns the XCH pre-farm) shares.
   Note: Yes, they can now also do this via BTC and ETH ETFs, but most large funds and other investors will want diversify and are likely to allocate to all these to minimize risk. CNI and XCH will be joining a small club of global easily investable digital assets
4. Publicity from the IPO, especially if it happens during a bull market, will drive demand for CNI services & XCH
5. Validation of early investors faith & investment in CNI, which in turn may attract later stage investors.

So great, CNI makes out like bandits! What about the rest of the Chia community?

Why the IPO is good for the wider Chia ecosystem? (and XCH price)

1. Because of the pre-farm there will be a relationship between CNI shares & XCH price. E.g. if there was 20M shares and 20M pre-farm owned by the CNI there might be a 1:1 relationship between CNI share price and XCH.
   In reality there is likely a premium (if CNI is doing well) or discount (if CNI does badly). This will mean there is an arbitrage opportunity for traders to buy & sell CNI shares vs XCH if any “mispricing” away from the ratio occurs.
   This will lead to naturally more interest in XCH, more trading and liquidity (so easier to get into and out of XCH without pushing price).
2. More publicity, interest, and trading will make XCH more attractive to exchanges to list XCH (especially with implied approval of compliance by SEC). E.g. Wen Coinbase? After IPO.
3. A newly flush with cash CNI will be able to retain & attract more staff with cash & long term incentive schemes like share option plans
4. More & well rewarded staff means more and faster delivery of valuable things in the roadmap for more CNI clients
5. More cash and staff also mean more resources to promote, market and sell CNI services to paying clients. We all know the Chia vision and tech is there (See tag #ChiaFixesThis) it just needs to be further developed and the world needs to know.
6. A successful CNI IPO and rising XCH price should also incentivize the wider XCH community to develop more and attract new people (and any old OG Chia community members back)
7. As the pre-farm is one of the biggest assets of CNI its in their interests for XCH price to rise both before IPO (so the amount of cash they raise is bigger) & also after as the CNI share price is as above related to the pre-farm value.
   So CNI incentives will (and already are) aligned with XCH and therefore farmer’s and communities interests.

So yes in conclusion a Chia Network Inc IPO is worth waiting for and worth CNI focusing on and even yes selling some of the XCH pre-farm in a careful manner to allow them to get to it.

Onwards!