“All ICOs Are Scams”… Except This One

Published in

The Cryptoverse

4 min readAug 21, 2018

On Today’s Episode of The Cryptoverse…

I would like to revisit an ICO I spoke about a few months ago who stand head and shoulders above the rest in terms of their behaviour.

Episode Transcript

“On today’s episode of The Cryptoverse I would like to revisit an ICO I spoke about a few months ago who stand head and shoulders above the rest in terms of their behaviour.

Before you say it no this is not a sponsored video and no I do not own any ABYSS tokens. Although I might buy some after releasing this video.

This isn’t actually an ICO, it’s a DAICO.

The first two letters come from the word DAO and then the last three letters are just ICO.

So if we take it literally a DAICO is a decentralised autonomous initial coin offering, and Vitalik offers a Venn diagram with the DAO and ICO concepts overlapping each other to get the best of both.

The first and only project I have personally ever seen actually implement this model is a project called The Аbyss, a platform designed to take out the middleman in the computer game industry.

At the moment you have companies like Steam and Origin taking cuts of game sales and that’s money out of the developers pockets.

These centralised platforms also can manipulate what games sell and what games don’t sell by how well they feature each one on the platform.

The Abyss intends to be a blockchain based decentralised alternative to move the gamer and the developer closer together.

That’s great, a very understandable problem and a good use of blockchain technology as the solution. Plus The Abyss is not the only competitor in this area either, so that’s not what makes them really stand out.

What makes them stand out is their decision to conduct a DAICO.

So that’s enough of an introduction, now let’s talk about how a DAICO works at the same time exploring how The Abyss carried it out.

The first part works like any regular ICO.

You build a website describing the project, write a whitepaper, get all your social media account setup, create your ERC20 token and set dates when your fundraiser will start and end.

What differs with a DAICO is what happens once the funds have been raised.

Unlike a traditional ICO, the project doesn’t get all the money in one go.

Instead the ICO smart contract holds the money and gradually releases it to the developers wallet on a pre-programmed schedule.

This is what is called “The Tap”, and the flow can be increased and decreased on request of the developers, but on approval from token holders.

So if nothing else the money flows to the developers gradually, ensuring they are not distracted by a big pile of money which may tempt them to go and buy a Lambo.

Without that kinds of a distraction they can get on with delivering the project.

The second incentive for them to get on with the work is the fact that the token holders can cancel the project if they don’t feel sufficient progress is being made.

In that case, token holders would vote for the smart contract holding the money to stop the tap and release the funds back to investors, effectively cutting off the funding altogether.

This feature greatly reduces the risk of the developers getting lazy and keeps them on their toes.

The good news is that this swings both ways.

If the developers are making good progress and feel they can move faster than expected, the developers can request an increase in the tap, say to hire more developers.

Token holders can always say no, but if they say yes, the smart contract will then increase the rate at which it pays out the ICO funds.

Now The Abyss have already completed 3 of these polls to date.

The 1st of July was the first deadline for a refund poll. This was not initiated so we assume token holders are happy so far. The refund poll runs once every 3 months, the next one is the 1st of October.

Also in July the developers requested an increase in the tap and on the 10th of July the request was declined by a vote of 62%.

The tap vote runs once a month and on the 10th of August the tap increase was granted by a 94% yes vote.

The smart contract is now paying the developers 1,125 ETH per month, the initial tap was just 500 ETH per month and is limited to a 50% increase at a time.

If token holders want a refund, it requires at least 34% of tokens to vote for it and then vote for it again 1 month later to confirm.”

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