Open letter to Anti Danilevski
CEO of KICKICO
Dear Anti, I write this letter with the utmost respect and I would say this because I do not want any kind of negative feeling to be associated with the project, which is waiting for the green signal by KICKICO. I was reading your last blog entry a few days ago which was about reducing the hard cap of ICOs and increasing the soft cap. I would like to reply to this today.
The fact that the ICO ecosystem is full with speculation and fraud is not new to anyone, and personally, I and our other members deeply condemn projects that promise a lot, make high hard caps and achieve them. Personally, for software projects, I do not see too much reason for a hard cap over 40–50,000 ETH unless the project is a bank, a trading platform, an insurance company or a real estate business. In these segments, there is a need for a financial reserve, but in return, the crypto-society will (rightly) expect developments to start immediately and be visible. This is called transparency. The unnecessarily high hard cap will cause the ever-mentioned crypto bubble to burst. But what I can not leave without a word is that: to define the soft cap by the 30% of the hard cap.
Regarding the ENVIENTA project, this would be against our principles. Anyway, I would like to point out that in the ICO world we are the counterexample of greed and scam. Let me explain this and make more clear:
We work on the ENVIENTA project at least for 3 years. We started to work on this when the ICO concept was unknown to the world. We did not start to build up our project for ICO, as 99% of current ICOs do.
Our tokens do not have speculative value but real value, they can be spent on real services (like accommodation, education, premium services, products). For most ICOs this is not true. Our project works with a clear and transparent budget.
Here is an extract from our white paper, which clearly defines how are we going to spend the money, which will be gathered through token sell. Our project is divided into 4 phases, we HAVE TO achieve the first one. We need ONLY 1000 ETH, it does not make sense to raise more money. If we get the 1000 ETH, we consider the project to be successful, even if it is only enough to build our self-sustaining project center and start to host the first guests who come to know/learn and/or enjoy the sample project. This is Phase 1.
For additional phases (education — open source project platform — decentralized production) additional 1000–1000–2000 ETHs are required. This is altogether 5000 ETH which is our hard cap. Regarding your 30% rule, our soft cap should be 1500 ETH. But we are not greedy and we know that this amount of money is too much for Phase 1, but not enough for Phase 2.
Since the KICKICO platform does not provide any visitor statistics, we have to launch our campaign actually blindly when we get the green mark from you. Since we have no idea about how successful will be our campaign but let’s assume the wrong case that we gather only 1200 ETHs. According to KICKICO rules, in this case, we did not reach the soft cap, since it is not 1500 ETH, but according to our calculations, we only need 1000 ETH. Officially, the campaign will be unsuccessful and everyone will get their money back, while we are losing our chance to start building the Phase 1.
Other solution: reduce our hard cap to keep the 30% rule. In this case, we could gather only 3333 ETH, which is not enough to start the 4th phase (5000 ETH required).
We are solving real problems (housing problems, nutrition, education, open source projects, decentralization of production, etc.), not virtual problems in the online world (trading in the online gaming industry) or anything else that does not help people to live or to eat. We want to do this at affordable prices and therefore we do not need millions of dollars, but we cannot solve this issue by raising the soft cap or reducing the hard cap.
That’s the reason why I, as co-founder of the ENVIENTA project and ICO token sale manager, ask that in our case please consider this “30% of the hard cap as the soft cap rule”, as a non-general rule, for the reason as I described above.