New change to ICOs that’d allow people to pull their money out
A potential change to ICOs is being mooted, that might just increase investor confidence dramatically.
Underpinning the majority of initial coin offerings (ICOs) is the ERC-20 standard from Ethereum. This was developed by Fabian Vogelsteller alongside Vitalik Buterin, and it’s the former who has come up with a new way that may just bring extra confidence back into ICO investing.
Vogelsteller was speaking at Ethereum’s annual developer conference, that went by the name of Devcon 4. And he put forward at that the bold idea of what he calls a “reversible ICO”. The idea is that investors can put their money into an ICO as per usual, but in this case they have the option of reversing their choice and taking their cash out.
“You are able to withdraw the funds you committed at any point of time and you do this by simply sending back your tokens”, he told the crowd at the conference. By doing so, that frees up more tokens for other investors to take advantage of. It would, he argues, mean that startup firms would not necessarily be able to purely rely on an ICO for their funding, and would require investors outside the coin offering.
The sum total of these changes, he added, “makes scams unlikely”. It would mean that if promises at the heart of an ICO weren’t kept, then people could take their money out. Furthermore, if a project simply doesn’t work, people would get their cash returned via this method.
It’s early stages for the reversible ICO (RICO) code, but Vogelsteller will be trialling it with a startup of his own, before looking towards a wider rollout.
As we hear more on the RICO project, we’ll pass you the details…
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