Developer ERC-20 code: "Money back guarantee for ICO investors"

Last Tuesday the developer of the ERC-20 standard code, Fabian Vogelsteller, spoke at the Devcon4 event. Vogelsteller proposed a so-called 'reversible ICO' (RICO).

A reversible ICO would increase the security of investors tremendously. With such an ICO, investors could withdraw their investment from the project at any stage. A special smart contract is required for the restitution of investments. This contract only requires the return of the amount of provided tokens.

Given the proposal could lead to a greater fluctuation in the value of the projects, Vogelsteller suggests that ICOs in any case secure a basic investment through private investors outside the ICO.

According to Vogelsteller, the proposal will prevent malicious practices. ICO startups will feel a greater pressure to keep the promises made about the underlying project. Additionally, it would make the failure of a project less painful, as investors no longer have to lose their entire investment.

Vogelsteller added that many ICO parties deviate from the goal of decentralization. When an ICO raises a lot of capital at an early stage of the project, he believes that startups are often inclined to buy "Lambos instead of doing something useful".

In the past two years, about $20 billion in financing capital has been raised by various ICO projects. Vogelsteller believes that, as the developer of the ERC-20 standard, he has an obligation to come up with a better solution.

Vogelsteller will be the first to apply the new RICO method in his own startup, a blockchain project called 'Lukso' which focuses on the fashion and design industry.