The clock is ticking. The crypto community is running out of patience. We should advance an agenda of self-imposed rules for ICOs in order to effectively separate the high quality investment opportunities from the scams and frauds.
In my previous post I proposed that we, the crypto community, need to see at least three things in all future ICOs: a much higher degree of transparency, a more ambitious approach towards contributing to the solution of global challenges (hunger, climate change, etc.), and a strong proof of concept (value being generated before the ICO). Today I wish to elaborate on these points taking into account the wonderful comments that fellow steemians wrote bellow the original post.
How can an ICO be transparent and responsible without burying great exponential solutions in a mountain of regulations and paperwork?
1.- By becoming objective-based, not idea-based. Instead of merely rewarding an idea we could reward achieved objectives and milestones of the development of the project / company linked to the ICO. For example, an ICO could be split in three or four rounds, and its team could announce the project’s / company’s progress always before each round so that potential investors can understand how money is being used and better assess whether to keep investing or not.
2.- By self-imposing transparency rules. Let us make a quick review of some of the actors present in the ICO scene: (A) governments try to regulate (governments will be governments), (B) potential investors try to get more information before investing, (C) confirmed investors try to get more information before buying more, holding or selling, (D) the ICO team tries to finance its project / company as fast as possible and get valuations as high as possible, and (E) the crypto community is drowning in an ocean of conflicting (and even misleading) information all along the process. And with over a thousand coins and tokens out there you can bet there is a lot of conflicting and misleading information to drown in. With this in mind, it becomes important for ICOs to start considering self-imposed transparency mechanisms such as having open financial statements, making quarterly coin-holders’ calls (yes, like stocks), or welcoming certain types of external audit on its achievement of objectives (an independent NGO that works on transparency / open data / governance, perhaps?).
3.- By having a permanent communication channel with the crypto community. Some options are: a quarterly newsletter, active and welcoming social media accounts and evidence-based reports (a comprehensive account with pictures, data, infographics and statistics of what is being done with the funds and what value is being created).
Let us walk towards transparent & responsible ICOs that aim to solve global challenges.