The man often dubbed "the godfather of Ethereum", Fabian Vogelsteller proposed to adapt the ICO model to allow investors to withdraw their funds at any time, in an attempt to destroy the incentive to create ICO scams .
The scams have been an integral part of the cryptic world since the ICO really took off in 2017 – the word "BitConnect " it has virtually become a synonym for cryptogaming. The figures that come out of the scammers have disappeared with, apparently without scot, in the past, sometimes they are breathtaking. Vietnamese start up Modern technology it raised $ 660 million in April 2018 through their own Pincoin is if one token and platform, before disappearing without trace, and Plexcoin and Centratech collected similar amounts.
Many believe that when regulation is introduced, the risk posed by the scams at the exit will diminish anyway, now a more bottom-up approach has been proposed by "the godfather of Ethereum", Fabian Vogelsteller. Speaking in Prague Tuesday (October 30thth) at the annual Ethereum developer conference, Devcon 4, Vogelsteller, which was key to bringing the ERC-20 model to the Ethereum network, proposed an adapted version of the ICO model that would allow investors to withdraw funding at any time during development of the project. This RICO (Reversible Initial Coin Offering) model would use the planning of Ethereum smart contracts to allow investors to do so "Reversing their funding commitment".
"You are able to withdraw the funds you have committed at any time and do so by simply postponing your tokens."
He also explained that at any point when the tokens were returned, other investors would have been able to buy the project, but admitted that some form of basic capital would have to be guaranteed by investors outside of the market. ICO to maintain funding stability.
Vogelsteller states that the adoption of this model would be "Making frauds unlikely" because investors could recover their investment at any time, removing the risk of relying on the word of start-up to assert their promises after the money has been delivered.
Beyond that, it would force the bar to be set far higher with the projects as they would be forced to keep their promises or face a failure. Vogelsteller described this as projects "failing naturally " without the pain of investors who look helpless while their investments are swept away.
More work, less Lambos
Vogelsteller has made clear that he sees something that needs to be repaired with the current ICO model and that, as a key architect in the development of the ERC-20 model, he feels "Obliged to find something better". Just like a child born of extreme wealth, projects that are flooded with capital, at the outset, are often only incentivized to "[buy] lambos rather than doing something useful. "
The tests for the RICO model will start from the start-up of Vogelsteller, a blockchain of fashion and design called Lukso. If successful, Vogelsteller hopes it will be extended with a wider scope and bring "the balance between [Ethereum] community and the project ".
Image source: "Youtube"
Alex put the words on paper since he was old enough to hold a pen; when he bought his first bitcoin in January 2017, those words have also discovered their place inside the crypto. He holds a master's degree in international relations at the University of Leiden in the Netherlands, and his specialization lies in the European regulation of cryptocurrencies.