Understanding Decentralized Autonomous Initial Coin Offerings (DAICO)
He was the creator of Ethereum (ETH) in 2018.
DAICO aims to combine the principles of Decentralized Autonomous Organizations (DAOs) and initial coin offerings (ICOs) to enhance investor trust in ICOs and give investors more control over the allocated funds.
Cryptocurrency Fundraising Method
ICOs are a fundraising method unique to the cryptocurrency industry, where developers sell a portion of the total supply of their crypto assets to the public to secure funds for development and marketing.
Typically, there is a soft cap, which represents the minimum funding target. If the soft cap is not reached, the campaign is considered a failure, and all funds collected are returned to contributors.
Funding Release and Decision-Making Power
Once the soft cap is reached, developers gain access to the funds raised, including any amounts exceeding the target, after the ICO period ends.
This places decision-making power regarding the use of funds solely in the hands of the centralized project team, which can lead to unfavorable outcomes.
Instead of releasing the funds immediately after the fundraising campaign, the funds would be unlocked gradually at a predetermined per-second rate known as the tap variable, which is voted upon by the investors.
Furthermore, if the development team fails to deliver the project, contributors can vote to refund the remaining resources to themselves.