The Creator of the standard ERC-20 proposed a mechanism for automatic return of funds to investors. ICO


The Creator of the standard ERC-20 proposed a mechanism for automatic return of funds to investors. ICO

The developer involved in the creation of the token ERC-20, offers a simple solution that allows the investor at any time to withdraw your funds. Anyway, sounds simple enough.

Developer Fabian Vogelstein proposes to add a mechanism RICO, that is “reversible ICO”, or in rough translation, “reversible ICO”. Such a mechanism theoretically allows the investor at any stage of the project to return the invested tokens into money.

To do this, the developer proposes to create a special smart contract, which automatically perform such an operation. “You will be able at any time to get their money back at any stage of project development, just by sending back their tokens”, — he explained. Once an investor receives in exchange for the returned token due to him the sum in broadcast, the token can again be sold to another buyer.

Such a mechanism could certainly cause significant fluctuations in the valuation of the project — for example, if investors starts to panic, will begin to return EN masse to their tokens. Vogelstein believes that startups in this case you will need a certain amount of “base funding” from investors not participating in ICO.

However, according to the developer, the idea is definitely worth it, because it reduces the probability pojavlenija outright Scam. Knowing that investors at any moment will be able to withdraw their money from their project, the project team will be much more interested to offer them a real product and not an imitation of rough activity.

In the current situation, team ICO, who managed to attract considerable funds, often tend not to finalization of the product, and the good life at the expense of investors, he added. Vogelstein also explained that feels its share of responsibility in that case, therefore, “had to offer something better”. Moreover, the developer stated that after testing will test the mechanism of RICO on their own startup, Lukso.

Dmitry Gorulko

In journalism since 2000. Worked in different Ukrainian and European media, was a freelance author of several business media outlets. Translator, reporter, columnist, editor and Deputy editor of the news. Professional interests – from energy to business intelligence, and more recently – and Finance. Have worked long and hard with the news, I think this genre is the most interesting, dynamic and relevant. Informational website with no news at all – wasted money in my opinion.

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