Fauxtocols
The financial success of ICOs has led to the emergence of a set of empty conventions optimized for grabbing dumb money. A company creates a website, enlists advisors, announce their unmade product is the “first whatever on the blockchain”, and they release a whitepaper about it. This foundational document, rooted in the original Satoshi Whitepaper, has devolved from an academic document to hollow marketing. Like “astroturfing,” faking environmentalism to advance some alternate agenda, fauxtocols have taken root in blockchain.
If a company does not address anything academic or fit within an existing tradition of thought and debate, it likely has created a business plan. That’s ok. That’s what businesses do. If it uses a few extra big words, it’s still a business plan.
As Atomic Capital works in the security token realm, we’ve seen the rise of many protocols for this niche (niche for now). Complying with the SEC’s legally defined process doesn’t need a protocol. I can see why having a “protocol” helps a business’ marketing and adds a veneer of legitimacy, but we don’t need 9 explanations for how to do an AML/KYC check, accreditation check, adhere to lock-up periods for assorted exempted securities, and keep ongoing records post-issuance. There’s complexity here, I’m eliding, I know. That’s why we create software though. That’s the protocol. A no-action letter is a protocol. A sustainable business is…
