According to ethereum’s creator, Vitalik Buterin, investors deserve more control over ICOs. Vitalik is one of pioneer’s of the crypto funding mechanism concept and recently expressed a desire to pair that with a decentralized autonomous organisation in order to give the investors more control over how an ICO happens and where their money goes. And just last night Vitalik made an announcement in which he stated that he, along with gaming start-up The Abyss, are building just that; a new way of selling their tokens.
Konstantin Boyko-Romanovsky, the founder of the project, called traditional ICO’s out for allowing companies and startups to raise large amounts of money with no considerable product or platform. Boyko himself has drawn the short straw with multiple fraudulent ICO’s, so it’s no surprise that he is, personally, very excited about this project.
In a post, Buterin alludes to a process with a two-point mechanism, “Tap” and “Refund”, over which the token holders will have complete autonomy.
It is through the “Tap” feature that each of the token holders collectively decides on an amount to set as a monthly budget of sorts, out of which the team or company require to function. This amount is decided in a smart contract that will hold all the ether coins that were raised.
Based on their performance and ability to work within the stipulated amount, there will be a round of appraisal in which the token holders can decide to increase or decrease the amount based on the previous month’s results.
In the case that the team fails to perform according to the token holders’ expectations or the proposal is taking too much time to fructify into something of use, the token holders can take a vote to stop the process. This is where the “Refund” option kicks in. If the entire body of token holders votes in favour of a “Refund” it absolves them of the smart contract and the remaining coins are proportionally returned to the token holders with respect to their initial investment. For all intents and purposes, the “Refund” option is like the self-destruct button for an ICO.
Boyko-Romanovsky, being true to his developer nature, is tweaking Vitalik’s revolutionary idea for The Abyss’ DAICO. While Buterin spoke only of the “Tap” and “Refund” mechanisms, Boyko-Romanovsky is setting rules to them and tweaking the system to work for The Abyss.
The first one being the “Buffer”.
A buffer provides the token holders a one-time payment option, that increases funds for the product.
Suppose the team has an unusually high expense for a month that the cash flow cannot cater for, they can go to the token holders and proper a buffer vote to the token holders.
The second rule, the Boyko-Romanovsky set is the cap on the amount of increase between months. The token holders cannot increase funds by more than fifty percent from one month’s “Tap” to the next. That is if the first month’s Tap was 50 dollars, the second month’s cannot be more than 100 dollars.
The third rule The Abyss has set is that no vote of the same type can happen within a period of two weeks. So if you’ve voted tap, you have to wait for another two weeks before you can do that again.
The fourth and final rule, so far, that The Abyss has set is that of the number of people it takes to make a vote legitimate, or in crypto terms a quorum. For a vote to be legitimate the second time around, fifty percent to the initial number of token holders have to vote. So if you had 50 votes at least 25 of them need to vote again for their vote to be legitimate again.
It is a revolutionary idea that is getting a lot of public appraisal because of the fact that it is being backed by a market changer like Vitalik Buterin. Everyone is waiting to see how the implementation of this idea is going to be received by the average ICO investor, but I guess all we can do for now is wait and see how much traction it will get when it’s implemented in The Abyss’ upcoming products.
Do you think this will be widely adopted and used as a replacement for how ICO’s have been conducted up until now? Do you think, as an investor, this would make your investment feel safer? Let us know what you think in the comment section below.
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