ICO News: ERC20 author proposes new approach to ICOs

ICO News: ERC20 author proposes new approach to ICOs

Developer Fabian Vogelsteller (pictured below), who collaborated with Ethereum cofounder Vitalik Buterin and others to create the ERC20 protocol, spoke about the new concept of ICO on Tuesday at the Devcon4 conference held in Prague from October 30 to November 2.

Reversible ICO, or ‘RICO’

Vogelsteller proposed the introduction of a ‘reversible ICO’, or RICO, that would allow token investors to withdraw their funds at any stage of the project. 

Its concept specifically involves creating a purposeful smart contract that would allow investors to ‘withdraw their financial commitment’, at any time.

Vogelsteller  said: "You are able to take your funds back at any point in time and do it simply by sending your tokens back.”

Once the ether is returned, other investors can buy it. As this is likely to lead to fluctuations in the value of the project, startups will also need some "core funding" from private investors outside ICO, Vogelsteller said.

According to him, this method ‘makes fraud unlikely’, because if suspicions arise, investors can  simply withdraw their funds, at any time.

As such, ICO launches are more motivated to fulfil their promises.

RICO ‘allows projects to fail naturally’ 

In addition, it ‘allows projects to fail naturally’, without the risk that token investors will lose their funds when the project collapses.

Vogelsteller also said that many of the token sale companies are deviating from the original vision of decentralization. 

As they are often flooded with large amounts of capital during the early stages of the project, project organisers sometimes choose to buy expensive cars and live lavishly, rather than develop their platform, according to Vogelsteller.

Due to his role played in the boom of ICO projects as the author of the ERC-20 standard, Vogelsteller said he feels ‘obliged to come up with something better’.

The first step for Vogelsteller’s RICO protocol will be to begin testing the code in practice.

This news was first reported by Kryptomonitor.cz.

By Gerelyn Terzo
I have over 5 years experience in blockchain technology. I dive into new blockchain technology and report upcoming ICOs.
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