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The standard token maker of Ethereum wants to make ICOs reversible



The developer who formalized the code behind most of the first coin offerings (ICO) – the ERSE-20 token standard of ethereum – has proposed a new approach in an effort to make financing schemes for potential investors more secure .

On Tuesday, at Devcon4, in Prague, the annual conference of developers of ethereum, the developer Fabian Vogelsteller proposed a "reversible ICO", or RICO, that would allow token investors to recover their funds at any stage of the life of that project . In particular, the concept provides for the creation of an intelligent contract for special purposes that allows investors to "reverse their funding commitment."

"You are able to withdraw the funds you have committed at any time and do so by simply postponing your tokens," Vogelsteller told the audience.

Once the ether has been repaid, other investors can buy, continues Vogelsteller. Because this is likely to fluctuate in the value of a project, Vogelsteller said startups will need some "base funds" from private investors outside of ICO.

According to Vogelsteller, the methods "make frauds unlikely". As investors can withdraw funds at any time, ICO start-ups are more directly incentivized to commit to their promises. Furthermore, "allows projects to fail naturally" without the risk that token investors lose funds while the project collapses.

ICOs have increased in popularity over the past two years, attracting over $ 20 billion in cumulative funding, according to CoinDesk's ICO tracker.

Vogelsteller said Tuesday that many of the companies pursuing token sales deviate from the vision of ethereum of decentralization. Submerged by huge capital in the initial phase of a project, companies are encouraged to "[buy] lambos rather than doing something useful. "

Because of his role in the ICO boom as the author of the ERC-20 standard, Vogelsteller said he felt "compelled to find something better".

Intended to be a more usable orientation of the founder of the ethereal attempt Vitalik Buterin towards a more secure ICO scheme, the first step for RICO is to test the code in nature. To this end, the developer will implement the method within his startup, a blockchain of the fashion and design sector called Lukso.

As Vogelsteller told the public:

"Restore the balance between the community and the project and I think it's really important."

Image of Fabian Vogelsteller through CoinDesk


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