This article is the second part of my short series on long-term cryptoeconomic incentives. In the first part, I discussed how the current models of founder lockups and fundraising are broken, and how they can lead to misaligned incentives, pump and dumps, and consensual exit-scams, as well as how projects might attempt to fundraise post-ICO. In this article, I will focus on potential solutions to help solve these problems. Once again, thanks go to Michael Longoria and Kevin Xu for sharing their thoughts and experience here.

If you have not yet read the first part, I suggest you do so…

This article was born from several recent discussions I had with Stanford friends around the sustainability of cryptoeconomic models. Thanks in particular go to Michael Longoria and Kevin Xu for sharing many of their thoughts around the space, as well as several other friends with whom I have discussed this topic at length. In this article, I will lay out several long-term challenges for the Cryptoeconomy, focusing on incentive design, founder lockups, and post-ICO fundraising. I will also propose improvements and solutions that I believe would be helpful for solving these problems. …

In the first quarter of 2018, Initial Coin Offerings (ICOs) have raised over $3.4 billion, exceeding the total amount raised from January to November of 20¹⁷¹. This explosive growth has fueled excitement from speculators, scammers, and smart investors alike, and shows no sign of slowing down halfway into Q2. While the ICO has become the new paradigm for fundraising, its infancy means there is a severe lack of objective time-tested data-points to analyze or draw meaningful conclusions from. While we have some preliminary statistics on the successes and failures of various ICOs, it will take several years to fully explore…