Vitalik Buterin, creator of the Ethereum network, recently proposed a new method for decentralized fundraising called “DAICO”. Incorporating elements of Decentralized Autonomous Organizations (DAOs), the new model is designed to minimize the complexity and risk associated with ICOs.
Buterin at the Ethereum Research Forum “DAICO) provided a summary of the new model in the post titled “Explanation of ‘s”. In the exhibited report, the Russian-Canadian programmer outlines a new model that integrates the features of DAOs into ICOs and refers to it as “DAICO.” includes a diagram showing the benefits of bringing DAO elements to the ICO, including the ability to expand funding. The DAICO model also includes the single-project approach of the ICO model, but this time without the risk of a 51% attack.
Development of the ICO Model
This new model proposed by Buterin can greatly improve the structure of a traditional ICO and eliminates the risk that ICO creators will use the resources collected for the project purely for their own benefit. “DAO” in DAOICO refers to a Decentralized Autonomous Organization governed by a smart contract.
Utilizing the beneficial aspects of the DAO model can significantly reduce the cost of using the Ethereum network, as well as the consequences for developers. stressed that this will change positively:
“A DAICO contract is issued by a single development team that makes a request to raise money for a project. The DAICO contract starts in ‘contribute mode’; With this mechanism, anyone can join the contract with ETH and receive tokens in return.. This could be a capped sale, a non-closed sale, a Dutch auction, an interactive coin bid, a KYC sale with dynamic per-person templates, or any other mechanism the team chooses.. After the contribution period ends, the ability to contribute with ETH ceases and initial coin balances are determined; After this stage, tokens can only be used for trading.”
Game Theory-Based Security Approach
Buterin admits that any vote can be manipulated, but combining ICO and DAO structures poses the threat of manipulation.
If a 51% attack increases the clickthrough of the DAOICO, the developers behind the project can easily lower the clickthrough rate again. Referring to the developers of the project, who “used the money collected not to actually do business but to buy Lamborghini”, Buterin said that in such a case, investors may refuse to increase the click-through rate en masse, or even vote to “destroy themselves” en masse.
The cryptocurrency ecosystem. Saying that he was disappointed with his current situation, Buterin tweeted that he would “quit” if the nastiness and frenzy that is currently sweeping the market continues to devastate the Ethereum community. He announced that he can give between $50,000 and $1 million to reward any work that contributes to solving the current scalability problem in the money environment.
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