Ethereum Co-founder Proposed a New Model of ICO

Ethereum Co-founder Proposed a New Model of ICO

Ethereum CEO Vitalik Buterin proposed a new improved model of ICO - DAICO . The developer uses "some advantages" of the concept of decentralized autonomous organizations (DAO) in it to make primary offers of tokens safer for investors and democratic.

Buterin published a description of the new model at the Ethereum Research forum . The post he titled as "Explanation of DAICO".

The idea is this:

The DAICO contract is published by a single development team that wants to raise funds for the project. The DAICO contract starts with a "deposit regime", describing the mechanism by which everyone can put ETH into a contract and receive tokens in exchange. It can be a limited sale, unlimited sale, Dutch auction, interactive ICO, KYC sale with dynamic restrictions for each person, or any other mechanism that the team chooses. As soon as the donation period ends, the opportunity to make ETH is closed - initial token balances are set, after which they can be traded.

According to Buterin, the new model gives more power to investors, since it allows to form a common opinion within the community about the amount of money a given project can spend, like, monthly. This becomes possible due to the implementation of the voting mechanism.

Investors start by allocating a monthly budget to the development team, and seeing that it spends it competently, they increase this amount. If investors are dissatisfied with the progress of the project, they can completely close DAICO and return the invested funds.

It is also assumed that the new model will create reliable protection against attacks of 51%.

Recall that in September 2017, Vitalik Buterin and creator of the project to scale up the TrueBit smart contracts, Jason Toich proposed the idea of an interactive ICO .

In October, the co-founder of Ethereum said that the next wave of cryptocurrency will be better. At the same time, he reminded that according to statistics 90% of startups fail.

Information Source: Ethereum Research forum