Do you ever sit and wonder why the crypto market is in the mess it is in today? Some blame it on FUD, and an extremely overheated market. However, the truth is that we are here because of scam ICOs. It is scam ICOs that pushed the Chinese to crack down on ICOs, and centralized exchanges, triggering the downhill slide. It is also scam ICOs that pushed Facebook, Google and Twitter to ban cryptos, thereby pushing the market further into the red. If the ICO space were more streamlined, the crypto market would be doing pretty well right now.
Luckily, there is a solution, and it lies in an innovation called DAICO, which was suggested by Ethereum (ETH) founder earlier in the year. So what is DAICO all about? To understand DAICO, you first need to understand how the ICO model is structured. As things stand, when investors raise money in an ICO, the developer team has complete control over that money. That’s where scammers take advantage. They raise money through some fancy named ICO, then vanish with the money, without developing the project. It’s the reason why governments and tech giants are fighting ICOs, and hurting the crypto market in the process.
The DAICO model changes all that, because it gives investors more control over their money post-ICO. Under the DAICO model, investors can vote for a refund in case the developer team fails to meet development milestones that they have promised to deliver. Investors also have the capability to vote on how much money to release at every stage of the project development. Essentially, this model does away with scams, which will be a big boost for Ethereum (ETH).
The model is already being tested in an ICO for a gaming platform called the Abyss, which will end on the 16th of April. Once this ICO is over, the developer team will be under the watchful eye of investors, who will be keen to see if all its milestones are met. If they won’t be met, nobody will lose money. There will simply be a vote and every investor will get a refund of the money that they have put into this project.
If the DAICO model succeeds on the Abyss ICO, it will be a major vote of confidence for Ethereum. Investors will demand that ICOs be launched using this model for them to put in their money. We are likely to see a flight from other smart contract platforms that are competing with Ethereum in the ICO space. In fact, this could be the point where Ethereum takes complete dominance over the smart contracts market, and also uplifts the whole market again. That’s because governments are likely to loosen regulations on new ICOs. Tech companies like Facebook and Google are likely to reverse their decisions too.
In my view, this could be the ICO that takes not just Ethereum, but the entire market to new heights. Keep an eye on it.
This information should not be interpreted as an endorsement of cryptocurrencies or a recommendation to invest. Historic performance is no guarantee of future returns. As an investment class, cryptocurrencies are speculative investments and investing in cryptocurrencies involves significant risks – they are highly volatile, vulnerable to hacking and capital loss and sensitive to secondary activity. Before investing you should obtain advice and decide whether the potential return outweighs the risks.