Vitalik Buterin has a new proposal to improve ICOs.
The creator of Ethereum wants to use benefits of Decentralized Autonomous Organizations (DAO) to make Initial Coin Offerings (ICO) more responsible and democratized.
The idea is as follows. A DAICO contract is published by a single development team that wishes to raise funds for a project. The DAICO contract starts off in “contribution mode”, specifying a mechanism by which anyone can contribute ETH to the contract, and get tokens in exchange. This could be a capped sale, an uncapped sale, a dutch auction, an interactive coin offering, a KYC’d sale with dynamic per-person caps, or whatever other mechanism the team chooses. Once the contribution period ends, the ability to contribute ETH stops, and the initial token balances are set; from there on the tokens can become tradeable.
After the contribution period, the contract has one major state variable: tap (units: wei / sec), initialized to zero. The tap determines the amount per second that the development team can take out of the contract.
There is also a mechanism by which the token holders can vote on resolutions. There are two types of resolutions:
- Raising the tap
- Permanently self-destructing the contract (or, more precisely, putting the contract into withdraw mode where all remaining ETH can be proportionately withdrawn by the token holders)
Either resolution can pass by some kind of majority vote with a quorum.
Note that lowering the tap by vote is not possible; the owner can voluntarily lower the tap, but they cannot unilaterally raise it.
The intention is that the voters start off by giving the development team a reasonable and not-too-high monthly budget, and raise it over time as the team demonstrates its ability to competently execute with its existing budget. If the voters are very unhappy with the development team’s progress, they can always vote to shut the DAICO down entirely and get their money back.
What do you think about?