Co-Founder of Ethereum, Vitalik Buterin, has launched DAICO ICO 2.0. The new model merges the concept of ICOs with DAOs (Decentralised Autonomous Organisations), aiming to increase security for token holders.
In a DAICO, the integration of a Smart Contract for token holders, allows them to control the release of funds to the development team through a voting mechanism, with the aim of giving a fair amount of control to token holders.
Voters are able to allocate a monthly budget, called ‘a Tap’, which can be increased as the developers demonstrate their ability to competently execute. If at any time they should become dissatisfied, they can vote to shut down the DAICO and return the money, proportional to the tokens they hold.
THE DAICO PROCESS
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.
Just as with ICOs, the initial coin offering 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 proposes.
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, allowing the token holders to vote on the rate of the ‘Tap’, setting the flow of funding to the developers, i.e. how much is released in what period of time.
The world’s first Daico token offering launched with ‘The Abyss’, a video game developer. The sale opened on 18th April 2018 and is set to close on 16th May 2018.
The DAICO ICO may not be the final solution, but it could abolish the “pump and dump” ICO epidemic, whereby a scammer ‘talks-up’ an ICO to drive up the value of the coins, and then quickly “dumps” the coins for a profit.