The developer of the standard ERC-20 for tokens, Ethereum, Thelistener Fabian (Fabian Vogelstellar) introduced the concept of “reversible ICO”. The presentation took place yesterday during the first day of the conference Ethereum developers Devcon4 in Prague.
According to Vogelstein, reversible ICO, or RICO, will allow investors to recover their investments at any stage of project development. He hopes his design will help to reduce the activity of scammers.
The main goal of RICO is to give investors more influence on the development of the project after the end of the fundraiser. Thelistener, expressed his personal disappointment in many ICO, adding that startups basically spend time on “purchase a Lamborghini instead of doing something useful.”
The transition to RICO can be realized by adding the necessary code in the smart contract. Thelistener, explained that investors can withdraw their investment by sending tokens of their issuers. The developer also noted that the ICO itself will have to lay the base of “financial cushion” to enter the market even in the case of outflows.
According to the Crypto Globe over the past two years the ICO total revenue exceeded $20 billion, which brought this model of fundraising from the investment of the periphery. ICO because, as a rule, do not include their investors in the decision-making process within the consensual mechanisms of the host network, the appearance on the market of RICO can correct the imbalance of participation of stakeholders in development projects.
Thelistener not the only vendor to offer an alternative funding model. In September, the Creator of Ethereum, Vitalik Buterin presented method of distribution of funds under the name of “liberal radicalism”, developed jointly with researchers from Microsoft and Harvard University.