UPCOMING ICO: Messari to launch regulation token
The question of how to regulate ICOs, cryptocurrencies, and other such blockchain-based innovations is one that’s plaguing the minds of governments the world over. Aside from, arguably, Switzerland, who recently released a set of well constructed guidelines for cryptos, none have come close to laying down a set of clear cut regulations for the burgeoning blockchain space.
Messari to the rescue
However, Ryan Selkis, better known by his Twitter handle TwoBitIdiot, thinks he may have come across a solution, and it doesn’t involve government intervention. Selkis founded Messari last month and plans to launch an accompanying token, by way of an upcoming ICO, for his CrunchBase-style online database. Messari is a little different from CrunchBase in that it provides info on blockchain-based companies rather than the more traditional businesses that Crunchbase provides info and data on.
Selkis also served as managing director for popular crypto news site CoinDesk from January 2016 until July 2017, according to his LinkedIn site. So, it’s safe to say the man knows a thing or two about the crypto and blockchain space. Selkis believes in self-regulation and this is what he hopes his token will help facilitate. But, how does it work?
Yes to ICOs; no to bad behaviour
Although Selkis has been very vocal in his criticisms of ICOs over the last couple of years, he is not against token sales, on principle. He is simply against a good idea being ruined by bad behaviour. ICOs are currently a hotbed of exit scams and phishing attacks and, as such, governments are becoming increasingly weary of them. And who can blame them? Their priority is protecting the right and financial safety of consumers.
The idea is basically to have a list of all companies which have been approved by a regulating body. Blockchain-based companies and ICO organisers would pay dues, using Messari tokens, and would be given a tick of approval. Investors would then know to stay away from ICOs that aren’t Messari-approved. Other industries use this same system and, generally-speaking, it works very well.
‘TCR’ self-regulatory model
Admittedly, Selkis wasn’t the first to come up with the idea of employing this kind of system for cryptos. See below quote from Mike Goldin of ConsenSys, who co-led the AdChain project (first to use the TCR design).
Goldin said: “A token-curated registry uses an intrinsic token to assign curation rights proportional to the relative token weight of entities holding the token. So long as there are parties which would desire to be curated into a given list, a market can exist in which the incentives of rational, self-interested token holders are aligned towards curating a list of high quality. Token-curated registries are decentrally-curated lists with intrinsic economic incentives for token holders to curate the list’s contents judiciously.”
So, those on the list would have an incentive to examine and curate the list because, as Selkis put it in his Messari explanatory post on Medium, ‘a16z and USV and BlueYard and FBG Capital won’t drop off the list if crypto funds like Polychain and MetaStable are their counterparts, but including Pump-n-Dump Capital or CryptoKidz Moon Fund would certainly undermine the quality, and thus the value for others to apply to the list’.
Selkis explains: “We bucket our work at Messari into three phases that are fairly easy to explain to a lay person: a) How to do we create a cryptoasset Crunchbase, b) How do we create a cryptoasset EDGAR, and c) How do we build a system that makes financial information move as quickly as cryptocurrencies themselves?”
There’ll be more announcements re the Messari token project in early March and in the mean time, Selkis is keen to recruit contributors to the ambitious project.
He ended his Medium post with the following:
“If you’re a developer working on token-curated registries, self-regulation and/or token sale design and would like to work with us on the Messari token, please get in touch at [email protected]”