If you are the average investor or someone just entering into this space, you may be confused as to what exactly an ICO pool is (no worries, we have all been there before!). So, here I am to break it down for you in an easy and understandable way.
What Even is an ICO?
First, let’s clarify the meaning of an ICO (Initial Coin Offering). When a new project wants to hit the ground running, they often set up a fundraising “campaign” in which individuals are able to purchase that project’s tokens. Thinking of this in terms of traditional investing, you can loosely compare it to an IPO (Initial Public Offering) on the stock market in which it is possible for individuals to buy shares from that specific company.
But Now What is an ICO Pool?
Within the ICO arena, it has become increasingly common that the investment amount that is required is quite high and often out of reach for individual investors. Here is where the creation of ICO pools come into place to solve this problem. Basically, an ICO pool is simply a group of individuals who round up their funds to be able to invest in an ICO, as well as pull together to fully research and evaluate varying ICOs.
Types of Pools
There are two types of ICO pools, which consist of non-trustless and trustless pools. Non-trustless pools are controlled by “pool managers,” who specify an address for which pool members send their Ethereum to and who are responsible for carrying out the actual purchase of the tokens in the ICO. From here, the managers should distribute the tokens to the members inside the pool. As you can imagine, this requires a lot of trust and in reality, can end up quite badly. On the other hand, there are trustless pools, which take advantage of smart contracts and their associated benefits. In this type of pool, a smart contract is created, which contains all vital details to carry out the purchase of tokens in the ICO as well as being open-source, which allows for transparency. In a trustless ICO pool, the possibility for human error (and greed) is diminished, and blockchains and smart contracts step up to make this process occur seamlessly.
MyWish’s ICO Pool Smart Contract
As mentioned above, MyWish recently released their ICO Pool Smart Contract, which makes the trustless pooling process even easier! As they mentioned in this article a few days ago, this will allow for an unlimited amount of pool members and automatic token distribution to all involved investors to take place. And there is no need to worry if for some reason the pool manager is not present, as the execution will still take place. These are just some of the amazing details that make the trustless ICO pooling process even more convenient for investors. For more details, I recommend trying it out for yourself on the free test net! If you end up falling in love with the user-friendly and secure process, you can use the code MakeAWish to get 20% off.
As always, I am more than happy to answer any related questions below, and may your summer be full of picnics, popsicles, and ICO pools.