What is the first association you have, when you think about chaotic, unpredictable and unregulated ICO market? I guess many of you think about the Wild West. Imagine these times of golden rush, when thousands of people from all over the world left their homelands to start a new life in this new land. Unexplored and dangerous land attracted people offering freedom and wealth. Sounds familiar, doesn’t it? We all are here for the same reasons. Times have changed, but people are the same. We see a great potential in Crypto Land. We all hope crypto will change the world in some way and we all want to benefit from it. This is why we are willing to invest in ICOs. We want to be the first adopters of the new features and we want to make money on it.
Today we will talk about ICO system and why we need it to change. I will use images of Wild West to illustrate the problem for you.
Before we go any further I want to remind you this article is not a financial advice, I’m not a financial advisor of any kind. The article was created for solely entertainment purpose.
The problem
Imagine an average town, one you’ve saw a hundred times in western movies. Life is tough here. Wild animals, difficult climate conditions, lawlessness and other dangers wait you here. People who come here don’t really understand how deal with all this. Cryptomarket is not different at all. We come here uneducated. We heard something about bitcoin, about huge profits, something about new economy. We want to be a part of it, so we are here.
Imagine, you meet a group of people here. They promise to sell you some land on the nearest hillside. They say there is gold on this mountain. They show you golden nuggets they’ve found on this hillside. If you buy this land, you will become rich. Invest some money now, and get several times more in the future, when and empty land will turn into a gold mine. You go the town saloon, speak to the bartender. He says there is gold there. You have to make your decision. You know it can be just an empty land, or you can face bandits right after you leave the town for this piece of land. You can’t check anything and you make a decision. Find something familiar? This is exactly how ICO concept works right now.
This group of people is ICO team. They offer you a concept. Usually they don’t have a working product. They don’t know if idea will work. They just hope it will in the good case. In bad case ICO is pure scam. The plan is to grab your money and disappear. Can you distinguish these two cases? No, you can’t. You can do your research, but there are no 100% guarantees. Land is the project. It can make you rich or be a huge mistake. Bartender is ICO reviewers. It can be platforms, youtube channels and etc. Do you know how many youtubers out there do “honest” reviews after they make a deal with ICO team. Yeah, there are many honest blogers who do quality content. The problem that you don’t know if the video was sponsored (unless blogger will mention it).
To summarize the above example, let’s list the problem we’ve described:
- There is no guarantees ICO will be success. Your ability to check it is limited. People can’t protect themselves from SCAM.
- ICO model doesn’t encourage the team to work on the product after ICO. They already have all your money.
- If ICO doesn’t reach soft cap, your money will be refund. If it does, there’s no further real obligation. You can’t control anything.
Solutions
Now when we stated the problem, it is time to take a look at solutions.
The first solution that can come to your mind is from the old world. We can call cavalry to the town. State will come to control anything. Yes, scamers will be forced to hide in the shadows. Market manipulations will be less possible. It will be hard to start an ICO because of regulation. You may say that the problem will be solved, but at what price? Our freedom will be taken away from us. We will be forced to follow old rules, these rules do not fit in crypto. Gold that could be ours, will be taken by big old money. Unfortunately, brand new conceptions that could change the world in the future do not always fit in regulation. Great ambitious projects will never come into life. Do you want to pay this price? I don’t.
Hm, what else do we have? DAICO concept was suggested by Vitalik Buterin in January 2018 and is aimed at making ICO’s more secure by involving investors in the initial project development process. It will further enable token holders to vote for the refund of the contributed funds if they are not happy with the progress being made by developers. Read more here.
A great concept, what will it look like in our little town? Groups of people selling land should agree not to fool people, check the land before selling to you, give your money back if there is no gold there. All the system should be based on the idea, that people will buy land only from those, who do these checks. So it will not actually work in the Wild West, but will it work in Crypto Land? I don’t think so. People don’t usually study projects before investing. In many cases it is enough for them to watch some youtube channel and the decision is made. Solid projects will use DAO, other will not. Will we be able to trust projects that do DAICO? No, as they decide how honest they want to be. Team can use their token to affect the vote, leave some backdoors in “terms and conditions” and etc.
Maybe the problem is not that critical and we can leave it as is? Unfortunately, we can’t. Take a look at statistics here.
$4.6B raised in ICOs. 565 ICOs failed to reached soft cap. 192 ICO projects got lost after successfully conducted token sale. $833.62M raised by lost projects. It is bad so much money was lost, but the problem is deeper. Good projects are lost in a sea of SCAM. Now Google, Facebook and Twitter banned ICO advertisements because of that. SEC is investigating ICOs. What will be the next step? I don’t think we will like it.
A Step Forward
What can we do then? Back in the old days of Wild West there was a solution that we can use. People who lived in those little towns used to elect sheriff. It was always someone chosen by the people, someone who gained their trust. Sheriff will not set laws and dictate the rules, but he will watch the people to follow them. Can we do it in crypto? Yes, we can. Sheriff we need is called Incremint project.
INCREMINT is a decentralized escrow platform that implements enhanced variation of a DAICO with increased flexibility. The Incremint mission is to support the growth and development of the initial coin offering (ICO) market by better aligning the interests of issuers and token buyers, mitigating risks, and incentivizing openness and transparency. The platform provides all the best features of DAICO model.
Issuer will set milestones before the start of the sale. Funds raised on ICO will not be given to the team all at once. Part of the funds will be escrowed in crypto, some will be converted to fiat and escrowed on a bank account. Team will get it only when a milestone is successfully reached. Token holders will decide if the milestone is met.
All token holders (other than exchange wallets) can participate in vote (confirmed by transaction – 1 token = 1 vote). Milestones can be changed through public vote. Token holders can initiate a vote through a petition to return all remaining escrowed funds. Smart contract is way better than any middleman.
Incremint will address DAICO issues as well. Team tokens can’t vote. Every holder can vote if he stores tokens on non-exchange wallet. Platform will assure all required information and history of previous vote is provided. Any new holder can (but not must) properly educate himself on the project. Investors can chat with each other to discuss the project.
What about our beloved decentralization? Nothing will change. You will use your own wallet to invest. Any ICO will have their own method of selling tokens. You actually need the platform just to get info and vote. If you want you can buy MINT tokens on ICO. The token gives a 10% discount on a token purchase of up to .01 ETH value in an ICO using Incremint. So you get your security and a discount as well.
For me it sounds like a great opportunity to improve things in Crypto Land. Will it solve all our problems? No, it will not. Yet it will make a difference. It will be something you can actually trust on ICO market. If all ICO could be held on this platform, the problem with SCAM ICO would be solved and Twitter, Google and Facebook would release their ban. SEC would be softer on ICOs. We will not see this eventually. Incremint will not take all the market, but we can help it to succeed in the way we need. We need it to hold ICOs in which we want to participate, and this is what Incremint platform can do.
I will do full review on Incremint platform and ICO soon. As always, you should not blindly trust some crypto hamster. Do your own research. You can use the following links as a start:
Website | Twitter | Telegram | ICObench
Disclaimer
I’m not a financial of any kind. I encourage you to check all information yourself and make decision only based on your own opinion. All articles are created for solely entertainment purpose.
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