A unique solution
The mechanics of the investment process of DES
The mechanics of the investment process and tokens reservation procedure
Few tens of minutes starts pre-ICO Decentralized Escrow.
In the waiting period, you can read a description of the main of part of our project — the “heart project”.
«The mechanics of the investment process and tokens reservation procedure.»
This is a unique solution which will generate 4 assets/entities.
What problems we solve:
- funds storage security;
- missed profit;
- investment value protection.
Investor registers on DES platform, in his member area (MA) he immediately views smart contract intended for Startup investment.
DES smart contract is possessed of the following functionality:
(Based on bench-mark data):
- Startup issues 1000 tokens for 1 ETH;
- Startup operates under 4 tranches workflow (25%, 25%, 25%, 25%,), the first tranche is transferred immediately after ICO completion.
- Investor swaps 100 ETHs per 100,000 tokens.
1st stage
At the very beginning, Investor registers in MA and receives a unique address — private key, that he (the investor) owns only.
Further, from his MA, 4 entities are created by transferring crypto currency into smart contract.

1) Funds for the first tranche to Startup remain in the smart contract (i.e. 25 ETH),
2) Hold in investor’s wallet
2.1) 25,000 active tokens, which can be traded on exchange immediately.
2.2) 75 000 tokens are reserved, they will be activated under subsequent tranches.
2.3) 75 reserved ETHs for next tranches to Startup.
2.4) The share in the project, that investor votes for next tranches, expressed as percent of project total capitalization (excluding team interest).
Assets 2.2 and 2.3 passing through the smart contract are labeled and become interconnected.
Assets 2.1, 2.2, 2.3, 2.4 come to Investor’s MA on created address, private key to which is created by Investor himself (online, by the random mechanism (mouse movement on the screen / keyboard set)). No one, except Investor, can own these assets, this also excludes the possibility of hacking. At the same time, assets 2.2 and 2.3 are marked and MA monitors these funds movements.
2nd stage
First tranche goes to Startup upon ICO completion.
Investor can dispose of asset 2.1 in his discretion (freely withdraw and sell tokens through any exchange), if this condition was previously stipulated by Startup.
3rd stage
At the next tranche maturity, Investor receives notification in his MA, as well as by email. The message contains notice to take a decision about next tranche (yes / no) and Startup’s progress report by this date. If required, Investor can receive notifications through social networks and instant messengers.
5 (five) days are given to make the decision. At the end of this period, if Investor does not take any decision (he becomes “silent”), his vote is delegated for making positive decision (YES). Next investment tranche occurs if over 51% of votes total number reached.
First step: Investor votes with his share, sending transaction to smart contract;
Second step: after five days, if more than 51% of the votes are “YES”, Investor sends transaction to smart contract transferring next tranche to Startup. At the same time, next part of tokens (25,000 tokens) is activated (unfrozen), so Investor can use them also (freely sell, send to exchange).
Investors who are inert in voting have non-activated tokens in their MAs. Tokens can be activated any time by private key entering and pressing “YES” button.
At the same way till investment is finished.
Comment 1:
It rises the logical question: what if “silent” does not enter his MA to activate tokens, then Startup does not receive next tranche from him?
Yes, this situation may happen.
First, in this case, “silent” will also not be able to use his tokens, as they are activated only by transferring funds to Startup, so sooner or later he’ll do it;
Secondly, Investor can lose his private key from the wallet and lose access to all assets. Here we compare the risk of funds massive loss from a smart contract in the case of hacker attacks with the risk for Startup of shortfall in a part of all funds collected during ICO.
Our solution is focused, first, on minimizing of the monetary losses risk.
Investor’s other advantages:
Frozen tokens cost corresponds to the rate of active tokens, i.e. Investor may not even wait for the next stage, and at any time activate these tokens, thereby transferring funds to Startup. DES does not limit Investor’s actions, but only provides the safe investment tool.
In case when free market token rate is lower than the nominal one, frozen tokens still have nominal price, secured by funds reserved in Investor’s MA.
At the moment of Startup failure, on the next tranche voting it’s decided to finish financing by majority opinion (pressing “NO”). Investors’ funds are activated (ETH), and frozen tokens are burned. Thanks to this mechanism, Investor is saved from their funds loss and the fall of tokens rates (missed profits insurance).
Comment 2:
Many tokens become cheaper after open sale release, i.e. Investors may not want to continue investing (transfer next tranches) out of fear of receiving illiquid, cheaper assets in their portfolio. Even if the team shows objectively good results, investors can try to return at least the face value.
Let’s clarify the situation:
First, at the beginning of investment a small share of tokens will handle in the open market, most will be frozen, and their drawdown is unlikely outcome.
Secondly, if the team shows objectively good results, the market will react accordingly, i.e. tokens price grows apparently.
And thirdly, the long-term decline of tokens value will serve as clear indicator of assets overvaluation during ICO. It becomes clear that the amount of money collected by Startup is unnecessary. Most likely for Startup there will be enough funds received through the first (one of the latest) tranches to implement the product.
Using Decentralized Escrow platform, we are participating in more even distribution of investment flows among Startups. Thus, in the world there will be more good solutions at a reasonable price, and investors take control over their crypto investments.
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