Explanation of DAICOs - Better ICOs


Vitalik counts himself among a chorus of people who have seen real issues with the emergent ICO phenomenon. Like many things in this industry, token issuance wasn't a very popular thing until all of a sudden it was. ERC-20, the most popular token standard today built on Ethereum, was incorporated at the beginning but none of the Ethereum developers at the time anticipated that this relatively basic standard would be used to allocate $ billions of capital in such a short period. We've seen some ICOs designed responsibly so that they don't disproportionately reward "whales" or provide massive sums of money to teams without having delivered any products, but the majority of ICO's offer no investor protections. DAICO's are Vitalik's proposal for better allocation of capital over blockchains, whereby funds would be pooled into a DAO (decentralized autonomous organization) where participants would vote on capital distribution on an ongoing basis, according to completion of milestones or other objective criteria of progress. Importantly, DAO participants also retain the "nuclear" option of shutting a project down and returning remaining capital to investors - a capability sorely lacking in ERC-20. 


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