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Expert Opinion by Luca Cotta for ICO Market Weekly Review #32 14 Nov 2018

Expert Opinion by Luca Cotta for ICO Market Weekly Review #32

The ICO market in the last two years has seen its market grow exponentially and despite a series of negative news or a slightly declining of the crypto market we are talking about a fundraising solution able to bring into the crypto market 20 billions of dollars in the last 24 months.
The market has changed, as has the needs and attention of investors regarding a series of financial and technological aspects that until now may have been underestimated.

Today, users and the public to whom the companies refer to raise funds through ICOs are much more skilled and increasingly seek precise and real evidence both on the concreteness of the companies that face this world and on the presence of already substantial projects that comply with certain quality standards that can truly respond to a real need and therefore propose concrete solutions to concrete problems.

We are also witnessing the emergence of new forms of ICOs with certain characteristics that are much more investor-friendly and which allow the management of funds to be maintained even after having participated and which guarantee a more transparent and linear relationship between the company that asks for and obtains financing and the investors themselves.

So we see growing projects around fundraising solutions using the logic of DAICO and RICO.

In the first case it is a concept based on team meritocracy.

The DAICO models, unlike the ICO model, provide greater investor involvement, a gradual release of funds to fund companies and substantial voting rights.
Daico is in fact a contract between the founders and the investors. The latter contribute to the Daico (through Ethereum usually) in exchange for the Daico tokens.
In an ICO, after it is finished, the founders and the team are immediately available the funds they have collected from investors, while the latter own the tokens. However, if the ICO project does not go as planned, the investor could see his investment depreciate immediately without being able to intervene.
In a Daico, however, the founders have limits in the monthly levy, while investors have the opportunity to vote and decide the destination of the funds or the return of the same.

The rules of a Daico are ratified and written in a public smart-contract specifically designed to make clear and available to investors immediately the principles that will govern the process of financing the company and the team and how the funds raised will be managed.

The defining characteristic of RICOs instead is the possibility for investors to withdraw their funds during the ICO phase at any time. This offers complete protection to users and consequently participates in eliminating frequent frauds. This «new» mode of crowdfunding takes the name of RICO, acronym of reversible initial coin offering.

The topics described up until now are certainly of topical relevance and as far as the Italian market is concerned, in these days an important meeting scheduled for November 8th in Milan, at Crypto Coinference 2018 will be dedicated to better explain the details of the new mechanisms of these new ones. ways of raising funds to an audience both in the sector and with little experience.

By Luca Cotta for ICO Market Weekly Review #32

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