How Status.im Screwed Up Their ICO

I like the idea of dynamic ceilings during an ICO in order to achieve a more even distribution of tokens.

Status.im had chosen such a process. However the way they had handled their ICO and implemented those dynamic ceilings had several major flaws:

1. Giving Unfair Preference To Investor Pools

Certain investment pool addresses were whitelisted in the crowdsale smart contract and those transactions flew by everyone else faster than a speeding bullet employing very high gas limits.

These pool transactions were therefore among the very first to be processed.

This resulted in the first dynamic ceilings, which had the highest contribution limits, literally being eaten up in minutes.

Everyone else had to participate in the 50 Gwei gas limit lottery and hope to get in at some point.

The fair way to do this would have been to treat all investors equally and allocate funds from investment pools proportionately to funds from individual contributors.

2. Not Clearly Communicating The 50 Gwei Gas Limit

The Ethereum blockchain literally froze up with failed crowdsale transactions as everyone and their mother tried to skip the queue with higher gas limits. Those transactions were simply bounced by the smart contract.

Tons of people sent out transactions all day long that had no chance of making it - without them even realizing that anything was wrong.

Sure, the status.im team had mentioned the gas limit at some point on their slack channel but the vast majority of contributors just checked the website for instructions where this crucial piece of information was missing.

Nobody is going to dig through the slack archives to find hidden crowdsale instructions.

Clearly a huge mistake that could have easily been prevented.

3. Crowdsale Smart Contract Not Making Change According To Dynamic Ceilings

During the ICO status.im proudly posted on their slack channel an example of their crowdsale contract accepting ETH up to the limit of the current ceiling being in effect and returning ETH above the limit to the sender.

Dynamic ceilings at work — an ETH transaction being partially refunded received based on the ceiling height at the time. In >this example you can see the contract was working as intended, a user attempted to send 348 Ether in one transaction, this >resulted in approx. 22 Ether being converted to SNT and the remaining 325 being sent back to the owner address.

This was not my experience.

Despite having sent my transaction within a minute of the ICO going live I was not a winner in the 50 Gwei transaction lottery and my transaction was only processed one and a half hours before the closing of the ICO.

At that time a measly 2.5 ETH ceiling was in effect.

However instead of getting 25,000 SNT and my ETH change back it turns out that the smart contract was rather dumb and simply bounced my transaction.

(I have asked status.im about this but have yet to hear back from them.)

4. Not Enough Steps In The Dynamic Ceilings Ladder

If widest possible distributon of SNT tokens were truly the goal much flatter steps of dynamic ceilings with more steps in the ladder would have been a lot better.

Instead of only having ~26k participants and leaving thousands of contributors annoyed with nothing but wasted time and gas to show for their efforts, status.im could have had many thousands of stakeholders more.

While this ICO left a sour aftertaste I hope the status.im client will see rapid development and will be on it's way to it's true destiny:

The Whatsapp of cryptocurrencies.