Decentralized Investing via The Transparent Crowdsale aka dICO
Utrum Talks dICO…a New Crowdsale Model Utrum Successfully Deployed to Further Trust in Cryptocurrency Investing
This year marked a major technological milestone for cryptocurrency investing. The development of the “dICO” by blockchain industry leader Komodo Platform.
Only weeks after the new tech was announced and made available to up and coming projects, grass roots project Utrum Foundation launched the world’s second dICO without a hitch.
Within seconds investors and supporters of Utrum’s Trust Platform project from around the world, were participating in the dICO…which stands for Decentralized Initial Coin Offering. And by July 4, 2018 Utrum had successfully met it’s soft cap and completed the crowdsale with success.
Under the Hood of a dICO
What makes a dICO unique from an ICO is the truly decentralized nature of the crowdsale. It’s actually more akin to the good ol’ fashioned OTC Trading model (Over the Counter Trading), in which a direct trade is made between two parties.
There is no centralized authority, company, or smart contract…which centralizes the process. So how was this designed and achieved by Komodo?
Long before the dICO model was announced, there was a lot of talk about Atomic Swaps. You can read all about Atomic Swaps in my article here.
In an atomic swap, a direct wallet-to-wallet trade is achieved between two different currencies at an agreed upon exchange rate. Komodo has implemented this technology some time ago through their Decentralized Exchange called BarterDEX.
And it’s this same Atomic Swap technology which makes a dICO possible.
A Transparent Crowdsale
I like to call a dICO a Transparent Crowdsale, because not only is it decentralized, it’s transparent in the function, code, and engagement. There is no complex coding/smart contract, no layers of control or centralization standing in the way of the trade of coins.
When you participate in a DICO, you are trading tokens directly from your wallet to the wallet of the project’s wallet in which the newly minted tokens are held…and their wallet is trading the new tokens back to your wallet in tandem and immediately…all occurring on a software/code level of exchange.
When Utrum Platform first launched the dICO on May 10, the supply of OOT tokens available for the crowdsale were in a wallet. This wallet was linked up to BarterDex through a decentralized app (dapp) which kept the sell orders placed on BarterDex and changed the exchange price in real time to match the ICO USD Price against KMD.
Investors were then able to simply link their KMD wallet up to BarterDEX and place buy orders on the DEX for OOT, at the real-time USD-locked price.
What occurred at that point was an automatic wallet-to-wallet trade, KMD for OOT…the OOT showing up in the investors linked wallet. Since OOT is an Asset Chain of Komodo, it can be stored in the same wallet address as KMD, so it was seamless.
Why Is This a Better Approach?
So why is this method so special? So much “better” or “more decentralized” than, say, Ethereum SmartContract ICOs?
There are many reasons, but let’s discuss just a couple of the most striking, which immediately place the dICO model head and shoulders above traditional ICOs in terms of trust, transparency, regulation, and value.
Simplicity and Security
Probably the most important feature of the dICO is that there is truly no authority or centralized control point for participating. Unlike Ethereum for example, where a project creates a smart contract(s) to centrally manage the ICO, a decentralized ICO is simply making the new token available for AtomicSwap, which is an over the counter trade, from a common token like KMD for the equiv fixed exchange rate of the new token for the project.
This is done on a decentralized exchange, tokens are made available at the ICO price and from the projects wallet, and participants are buying them direct at that fixed price until they are all sold.
While Utrum first launched the dICO on BarterDex, within days we had a more “grandma friendly” dapp developed with the help of Komodo devs and our own in-house Blockchain and Opps Dev. This user friendly dapp did exactly what BarterDex does…without all the extra bells and whistles. Just a simple wallet interface from which a user could buy the desired amount of OOT at the fixed/real-time exchange rate on BarterDex.
This dapp makes the dICO process even more easy and secure for investors, eliminating the chance of errors or mistakes causing loss of funds…and presenting an opensource and transparent dapp from which to invest..wallet-to-wallet.
This eliminates the central authority SmartContract address presented with Ethereum ICOs. Not only does this remove central control, simplify the process, and make it transparent…it introduces inherent security.
Rather than sending your primary currency with which you’re investing to a random address…hoping it’s the correct SmartContract wallet…you are performing an OTC Trade via a Decentralized Exchange. Even when using a dapp developed by the project, all the dapp is doing is giving you a user-friendly front end to the BarterDex exchange that also limits the coins to the one you’re investing in.
Another benefit of using the dICO method over ICO, is with central authorities there is always the chance the authority is corrupt. Even sending to the correct SmartContract for example, doesn’t guarantee it will do what it promises. There can be cleverly placed back doors in SmartContracts which allow someone to drain the funds and even make it look like it was an attack or hack.
With the traditional ICO model you are really trusting a central party. With the dICO you are trusting the code which you can easily view and verify.
Immediate Delivery
Another benefit of a dICO is that it is a wallet-to-wallet, immediate trade. You send your KMD and you receive your OOT (or whatever currency you’re investing in) within seconds.
There is no coin controller or promised delivery at some future date. This is one of the more important features of cryptocurrency investing and trading…especially in such a risky industry.
Immediate delivery also means token legitimacy and adoption. This only helps the market and the project. This occurs in several ways, one of which is through exchange listings and activity.
When Utrum Foundation launched the dICO on BarterDEX we were listed on CoinMarketCap within 24 hours.
That’s a record.
The reason this occurred is the Utrum Crowdsale was taking place via a dICO on BarterDEX, an exchange which CoinMarketCap monitors the volume and activity of. The trading data was picked up by CMC and OOT was listed in record time.
Another interesting factor along these lines is for the day traders…when a token sells very quickly, day traders can also put the coins they bought via dICO back on BarterDEX to offer to anyone who missed out.
Decentralized and Transparent — Hallmarks of Blockchain; Priorities at Utrum
Two of the most important hallmarks of blockchain are transparency and decentralization…allowing for untrusted parties to participate in trusted activities and exchanges. Through decentralization we remove trusted central control…which allows for more trust without the need for developing reputation or relationships. We can achieve this through code.
Transparency gives us trust in what’s being decentralized and how we are interacting with the data, the endpoints, the people, the information.
At Utrum these are our two top priorities in what we are looking to achieve, how we are striving to act in the industry, and in what we are developing for the cryptocurrency community. In our own actions and activities it’s crucial to us that we uphold these standards. We know that for us to develop a trust platform for investors, that trust begins with us in demonstrating our transparency and commitment to decentralized technology where it matters most.
The dICO was just one of our actions toward that end. I believe more projects will be adopting this model of Transparent Crowdsale. I’d love to see new projects consider the revolutionary tech developed by our beloved Komodo Platform. We are proud and grateful to be a Komodo Asset Chain, to have JL777 as our adviser and be a part of the revolutionary tech being implemented up-chain.
John Westbrook is Marketing Lead at Utrum. He has been an avid developer, investor, and writer in Blockchain and Cryptocurrency since 2016. If you’d like to learn more about what we are doing, what we are creating for blockchain, and how you can get involved, visit us at https://utrum.io and join our Discord!
