SherCoin DAICO model [CONCEPT DRAFT]

DISCLAIMER: This is only a proposal and still under study for economic and technical feasibility. (This article will be updated later)

During the process of conception of the SherCoin ecosystem, including the definition of the ICO, we have interacted with hundreds of people: lawyers, investors, economists, developers, etc. Each valuable suggestion and feedback that was provided, we took in consideration to improve our project.

During these conversations, we quickly understood that ICOs are gaining a bad reputation. In 2016 and 2017, a large amount of projects raised significant amount of money but never delivered anything. They didn’t achieve their roadmap, completely ignored their community, and even ran away with the money.

What is the cause of these failures?

The cause was due to the lack of control from the community and no accountability for the team. After the end of an ICO, the project team has access to all the funds without any restrictions. They can use these funds to achieve their roadmap by hiring people who will develop the project, or they can be wasteful with the money. Even if the project seems exemplary before and during the fundraising, after the funds are released, many red flags can appear, not providing ways for buyers to lock or get back the funds.

How will SherCoin give back the power to the community?

DISCLAIMER: This is only a proposal and still under study for economic and technical feasibility. (This article will be updated later)

Since we want to protect our community, we are thinking of implementing an ICO structure which won’t allow us to release any money without community approbation. This will also protect funds from cryptocurrency volatility. This model is inspired by the DAICO model proposed by Vitalik Buterin.

The process will be the following:

  1. All ICO money will securely be stored using stable coins (to avoid volatility) in a smart-contract. We will use multiple Ethereum based stable coins to avoid risks (USDT, Gemini dollar, DAI, True USD, etc.).
  2. An initial amount of USD 7 million will be unlocked for the first year of development and no more money will be unlocked that year.
  3. After the first year of development, each year, the SHER holders will be able to participate in a poll to allow us to unlock more funds (if needed by the team and with a maximum of 50% of the balance [NOTE: can be more if the remaining amount is small]).
  4. If the majority agrees to unlock more funds, then we will be able to withdraw more from the smart-contract. [NOTE: We can manage this using a smart-contract. Only SHER holders will be able to vote, and the vote weight will be proportional to the number of SHER held]
  5. If the majority does not agree to unlock more funds, because of the team’s failure to reach the milestones, the balanced funds will stay frozen until the team reaches the milestones or satisfies the community [NOTE: Then the team will be able to initiate a new poll].

You can look the following charts which resume the process.

SHERCOIN DAICO DRAFT MODEL WITHOUT SMART-CONTRACTS
SHERCOIN DAICO DRAFT MODEL WITH SMART-CONTRACTS

Don’t hesitate to leave a comment with you suggestions, remarks or feedbacks.