How was CGS born? Meet Alejandro Gómez de la Cruz, CEO of CGS
Phil Jackson, once said “The strength of the team is each individual member. The strength of each member is the team.” At CGS, we couldn’t agree more! Our team started working together out of their passion for new technologies and innovation.
We thought it would be nice to introduce ourselves to you, that’s why in this article you can get to know our CEO, Alejandro Gómez de la Cruz!
Alejandro is a lawyer who has been involved in the blockchain environment since 2011. First, he started getting statements from the Spanish Authorities to clarify the legal framework of Bitcoin in Spain. In 2014 he launched his first startup, Octopocket, that ended up winning the BotPrize in the finance category organized by Telegram.
In 2015 he founded the blockchain department at the global consultancy firm Grant Thornton. Now he works as CEO and co-founder of Icofunding and Coin Governance System.
We’ve asked him some questions!
When did you first hear about blockchain?
In 2011 a friend of me told me about a new currency that works only on the internet and is not issued by any central Bank. Being a lawyer, all the legal implications arising from something like that pushed me to continue studying the matter.
What do you like about blockchain?
The more I got involved in blockchain, the more I realized its potential. Blockchain is the perfect technology for removing intermediaries, we all know that. Nevertheless, when you eliminate an intermediary is when you realize the importance of a strong governance to rule the parties of a decentralized ecosystem. So, governance in decentralized networks is my passion since then.
Being a lawyer specialized in ICOs, what is your opinion on ICO regulation?
It is difficult to sum up a statement regarding ICO regulation. I think there are a variety debates going on regarding ICO regulation trying that need to be solved. First, I think startups need clear guidelines so they are able to know the red lines between a security and an utility (and to be honest, I think we are far from having this solved).
Second, security tokens do not fit at all with the current legal frameworks, especially when it comes to how to regulate secondary markets that operate with tokens.
Finally, in my opinion the concept of “qualified investor” is completely outdated. I think that knowing the difference between having a cold wallet or a deposit in an exchange; understanding the utility of each token or understanding that the valuation mechanism of certain tokens qualifies an ICO investor better than the current criteria that financial regulators use (having a financial background, having a lot of money to invest or a track record of lots of investments).
What do you think of the current ICO market?
ICOs have demonstrated its potential to disrupt the way companies are being funded and it shows lots of advantages for both ICO launchers as investors: the possibility to participate in early stage projects borderless regardless of the capital invested, they’re able to boost the community around a project from day one, etc.
However, the lack of regulation and self regulation has propitiated a long list of bad practices: fake promises to raise more money, no product delivery, zero due diligence, etc.
I think that in the following months we will see how the market will show the first steps of a safer ecosystem. And governance will play a key role in this change, especially when it comes to investor’s protection.
How was the idea of Coin Governance System born?
Working with several Token Sales, we felt that there was an imbalance of power between ICO launchers and investors, in favor of the first; which basically means that investors are completely unprotected against scams and bad management of the raised funds.
To solve this, we decided to build the CGS, an on-chain system that holds in escrow the funds raised in ICOs and that sends them to the project periodically instead of a one payment to the project. But if the investors are not satisfied with the management of the raised capital, they can trigger a voting mechanism which could allow them to withdraw the proportional remaining funds in escrow.
How will this solution guarantee a balance of power between all parties involved?
By introducing an impartial third party: the CGS arbiters community. Any CGS token holder can become a CGS arbiter. Once an ICO project has an open claim, it’s up to the Arbiters to vote and determine if the project is doing a proper use of the raised funds or not. Under the system we’ve developed, Arbiters are economically incentivized to vote right.
But, how do you avoid CGS arbiters to trick the system and manipulate voting process?
CGS arbiters can only vote if there is an open claim on an ICO project. To open a claim, ICO token holders need to deposit a huge amount of ICO tokens (i.e 5% of the tokens of the ICO). So if you want to trick the CGS, first, they’ll need to buy a lot of ICO tokens and they will pump the price of those tokens (so it will cost them too much, and that is just the beginning).
Once the claim is opened, a voting period will be opened. To win this voting period they’d need to vote against the majority, have in mind that the votes are secret (so again, this will cost them even more than opening the claim).
Assuming that they’ve spent a huge amount of money to break the system, the result they get is the possibility for any investor to return their tokens back to the project and get their proportional remaining funds back: the cost of doing all of this, will not be worth it.
What are the biggest challenges you have faced when developing CGS?
The dilemma of counterposing user experience vs. complexity/functionality is one of the biggest challenges we’re facing. It would be great to have tons of functionalities and possibilities to vote, but you need simplicity if you want a strong community of arbiters willing to vote in a system like ours.
Where do you see yourself in the next 3 years?
It is difficult to predict, but since decentralized governance is my passion and it’s something very needed to be developed in this ecosystem, I hope to be contributing very actively to this.
Official CGS channels:
Telegram: https://t.me/coingovernancesystem
Website: https://cgs.vote/
White paper: https://goo.gl/y9gQ2W
Newsletter: https://app.getresponse.com/site2/newsletter-cgs?u=h3S6v&webforms_id=BwhYv
Light paper: https://goo.gl/Ex8me6
Twitter: https://twitter.com/CGS_vote
LinkedIn: https://www.linkedin.com/company/coin-governance-system/
Facebook: https://www.facebook.com/Coin-Governance-System-146771572657311/
Instagram: https://www.instagram.com/coingovernancesystem/
