When is BlockParty ICO?
Recently I started getting enquiries like this from multiple sources.
A couple of months earlier, I was asked the same question in a pub. At that time, the person was confused BlockParty with https://etherparty.com which actually did ICO. But it’s not the case this time. So is it true?
As of March 2018, I don’t have plan for ICO nor I didn’t sign any contracts agreeing on doing so. If you think you have invested into BlockParty already, it is more likely scam so be aware of it.
What I want right now is for more people to try out BlockParty and gives me variable feedbacks.
Currently I run BlockParty in two events, Ethereum London and London Ethereum CodeUp. Once new dates are out, I will announce the schedule. If you are event organisers and interested in trying out in your meetup, please register your interest via https://goo.gl/forms/jAE5dhFaFum8Xlnr1.
ICO or not is now everybody’s business
Even though I dismissed the immediate plan of doing ICO, that does not mean I have never thought about it.
In fact, I started getting a few calls to advise on how to integrate Ethereum public chain into a private chain or just a traditional IT system so that they can do ICO. This idea seems ridiculous from hard core blockchain maximalist but there are non blockchain companies such as Brave, Kin and Telegram that are “planning” to use Blockchain not as means for decentralisation (even though some of them claim they are) but rather as a way to reward their members with points which can be liquidated on crypto exchanges. We are getting into the era where ICO is everybody’s business. As a share holder’s point of view, token crowd-sale looks “too good to be true” way to raise funds without diluting everybody’s equity share.
The (utility) token economy
T̶o̶ ̶j̶u̶s̶t̶i̶f̶y̶ ̶t̶h̶e̶ ̶c̶r̶o̶w̶d̶-̶s̶a̶l̶e̶ To leverage the power of crowd which you acquire/reward through tokens, the word “Token Economy” has emerged and people have proposed lots of interesting incentive models such as discount model, continuous token model, token curated registry (TCR), and so on. Trent McConaghy of Ocean Protocol made an interesting presentation during Ethereum community conference, proposing token engineering as a new practice where you can apply the techniques from AI and machine learning.
Non utility token models.
The alternative way is just stop pretending that there are some useful values on your token and treat it like securities, such as KODAKCoin. This requires a lot of legal cost and would eliminate majority of US investors, but at least it does not block users to use your system and you don’t have to worry about breaking security laws (Assuming you comply all the legal requirements. See this article for more info.
There is also a new radical approach called “Pay protocol” which was proposed by Jorge Izquierdo of Aragon during Ethereum community conference. Jorge came up with a “$PP token strategy” to raise bunch of cash from SV VCs and give it to users for free to increase network effect is (Jorge explained around 13:00 of the video].
Paypal used this strategy to get 7% weekly growth. The only caveat is you have to convince VCs in Silicon Valley that giving away free money to users is a good idea.
In either scenario, it is not certain if you can get the similar benefit of utility tokens where raising funds (aka receiving donation) without diluting your equity.
Why you should not have token models at all
Having said all of that, I am fully aware that these clever incentive models are meaningless if you don’t have an attractive service on its own. In fact, none of the token models have not been battle tested in the real life and spending too much time crafting a whitepaper without real users nor products is just counter productive.
In addition to that, app tokens (most ERC20 based tokens) have fundamental dilenma of “can you not just use Ether?” problems as opposed to protocol tokens (or rather currency) such as Ethereum, NEO, EOS, and so on,
Richard Burton is the founder of https://balance.io and his company raised fund through traditional equity crowdfunding which I invested a small amount, like £100. When I had a chat with him in a pub, he told me that you do actually get lots of respect by NOT doing ICO.
I’ve also spoken to a couple of people who have done ICO and they said that ICO have a risk of changing the dynamics of communities drastically.
Potential token use cases for BlockParty.
One area I could use some sort of staking or TCR is to prevent meetup organisers from doing malicious activities.
One of the biggest criticism of BlockParty is that its check-in process is solely dependent on event organisers to act as “Oracle”. Organisers have super power to decide who attended and who did not, leaving a space for the them to cheat. This is another reason I haven’t opened up BlockParty to any other people yet (or in fact no-one).
What if BlockParty requires event owners to stake the equivalent (or fraction) of total deposit and have some sort of voting mechanism to burn the stake in case of malicious activities? I created a gist of BlockParty token governance model so any feedback is welcome.
On top of that, one could add various reputation mechanism to event participants who actually came to the events. In fact, there are already initiatives like Sydney Ethereum meetup token and LinumLabs MeeToken so it would be nice if we can somehow integrate with these.
Now back to you
With that in mind, I would like to do a bit of sense check from my readers.
I would appreciate a lot if you can participate this polling (you need to open the tweet on twitter app or browser to vote).
If no ICO…
The alternative approach (or in addition) to ICO is to just charge for the service. If that’s the case, who should pay to BlockParty? Here is the second poll of the day.
Charging fees on smart contract based services are often seen as “Rent seeking behaviour” and it is equally frowned upon. Like token models, one can easily fork the GitHub repo and provide the version without the rent nor tokens.
(Update on 26/3/2018: As I am already getting a clear winner for the earlier poll, here is another one to get more insight)
Summary
Token economy and ICO are the emerging area (both technically and legally) which needs a lot of thought before committing myself to it. ICO also have the risk of changing the dynamics of the existing community and have a risk of bringing speculators and losing real users so would love to have as many feedback as possible right from the beginning.
Lastly, let me remind you that if you are a meet-up organiser interested in using BlockParty, please register your interest at https://goo.gl/forms/jAE5dhFaFum8Xlnr1
