This explains why most ICOs are destined to fail from an investor perspective. Most have no clear way to return funds/ value to investors and are just a way for a company to generate capital with no legal requirement to pay it back or to do anything at all really. Investment relies heavily on the greater fool theory and apart from several well run projects, investors will lose serious amounts of money.
@grizgal Many investors have already lost much. I wrote another post detailing a range of as high as 80% of ICOs from 2017 have failed. I struggle with the narrative that it's different from traditional VC investing. Normally, retail investors do not invest in risky asset classes such as startups. The appetite for the risk reward simply hasn't existed for the common investor. That's changing now though with the advent of ICOs. I'm in favor of raising costs to create a higher level of quality, similar to how blockchains charge fees per transaction to mitigate network spam.
I’m all in favour of opening up the asset class to retail investors if they accept the risk, but Most ICOs are not investments. An investment implies you give a company money with an expectation of a return and most ICOs don’t even talk about a mechanism for this. Traditional VC investors own large parts of the company they invest in. If they fail they lose the lot but if they succeed they make s killing. Most ICOs issue worthless tokens which entitle you to nothing. That is my issue. Some are better than others agreed but the vast majority could turn into multi billion dollar companies and return nothing to ICO token holders.
Fair points all around @grizgal. My post (https://steemit.com/ico/@quantalysus/crypto-files-the-ico-paradox) dives into topic to some degree. Ultimately what is the business model after raising funds from an ICO. Presumably, it's to build a product or network that returns value to said community. Businesses have long measured value in the form of a financial return. Crypto assets should have a very similar expectation of return. Sia Coin actually has a dual token structure. One is a utility token that is meant to have an attractive price to compete with it's centralized competitors and another that entitles one to financial gains (fiat and crypto transaction fees alike). I think the dual token structure makes more sense than a utility token that also has an expectation of financial returns. The two traits are incompatible in my view.