Deceiving Points of EOS ICO: Block.one should Clarify
ADD: Brendan Blumer, the CEO of block.one told me that the company already recognized this concern and have arranged this issue. The full detail will be coming soon he said.
Block.one introduced a new ICO method that is out of tacit agreement for EOS. By doing this, they want to improve fairer opportunity and minimizing whale's domination, however, there remain some unclear parts that can exacerbate outcome significantly.
In the smart contract code, it says Crowdsale owners can collect any time (Sse, https://github.com/EOSIO/eos-token-sale/blob/master/src/eos.sol#L129-L132). This means the fund can be released anytime to the the team members and sharesholders, and they can participate the ICO, possibly repetitively(so called recycling).
For instance, let's assume there are 50, 10, 10, 10, 20 millions USD invested in EOS for the first five days. So in sum, $100M is invested and users can get 200 million EOS in sum at the price of $0.5 per EOS
| 1st | 2nd | 3rd | 4th | 5th | Total | EOS | USD | USD/EOS | |
|---|---|---|---|---|---|---|---|---|---|
| Investors | 50 | 10 | 10 | 10 | 20 | 100 | 200,000,000 | -100M | 0.5 |
| BO Members | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 100M | NA |
However, if block.one release 50% of the fund every day to the members (so the fund becomes individual resource), and the fund is reused for EOS funding, block.one members will get over 100M EOS without adding any money from their pocket. Meanwhile, investor's price will increase to $11.03 per EOS, 22 times higher than without recycling.
| 1st | 2nd | 3rd | 4th | 5th | Total | EOS | USD | USD/EOS | |
|---|---|---|---|---|---|---|---|---|---|
| Investors | 50 | 10 | 10 | 10 | 20 | 100 | 9065155.807 | -100 | 11.03125 |
| BO Members | 0 | 25 | 27.5 | 28.75 | 39.375 | 120.625 | 10934844.19 | 100 | Inf |
| Sum | 50 | 35 | 37.5 | 38.75 | 59.375 | 220.625 | 20000000 |
It can be extreme example, but still can happen because there is no clear disclaimer on this issues. No clear explanation about how much fund will go to shareholders and block.one team members (so converting public money to individual fund), and when this will happen specifically ("any time" obviously does not tell)
To address these concerns, block.one should clarify these things
- The amount of fund that will be released to individual team members and shareholders (all who can invest EOS individually)
- Specific timing of releasing fund to individual team members
Without clarifying these things, there is too much leverage in favor of the ICO beneficiaries (i.e. block.one members). I personally won't invest in EOS until these issues are fully addressed.
I can relate to your worries. But i think they way they built Steem and Bitshares might tell us something of their character. Nevertheless, it would be better if they explained what they are planning to do.
In my opinion if you truly believe in your new platform it is alright to want some of the value. But it might be better to be honest and exact about it to people wanting to participate in your ICO. I mean if they want one million (random number) EOS for themselves because they think they earned it that could be okay right? And if it's not potential investors will behave accordingly..
Good examination of the issues. I think they are trying to do the right thing, but it presents some questions also. Even if you decide not to invest, you still have almost a year to change your mind. :)
Can you elaborate on this a bit please? What do u mean by 1 year to change his mind?
Ah, I mean that it looks like the EOS fundraiser will continue for a long time yet, so one could decide to jump in later.
Thanks, yeah, apparently this news broke within -24hrs of this post, so I didn't know that it's apparently going to be a 1 year ICO period. I love the idea FWIW.
Very interesting, I completely agree on your two items that thus should address.
thanks for sharing
Interesting point. So much new info is coming out about the ICO. I really need to understand these types of points prior to deciding whether to invest and if so, when? I agree too that this is another possible issue as you point out. I was very excited until the news has been coming out. Maybe they are trying too hard to change the fate of recent ICOs
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Yea, I agree that it's important to stop whales from dominating the volume. It messes things up for smaller investors :(
And can you elaborate on how they can fix this problem ? Do you think it is a lack of transparency on the part of the companies who are releasing these EOS's ? Usually profits dictate how much will go to the shareholders but with EOS's the process almost seems backwards.
I've seen the recycling issue being addressed already by others and also in relation to previous ICO's etc. - it will be very interesting to see how this multidimensional chess strategy will be implemented ;-)
What I find interesting to know is that there are 3 digits amount of shareholders from the cryptoworld part of this global live experiment.
Not sure if crypto vs. fiat will have another chance on this level with all the potential stake in the mix. We can only hope that the good whales have done the best possible analysis of the deep seas...
Yeah. I think we're still "ahead" of the curve by a pretty substantial amount, to varying degrees of course. We're ahead of the mainstream going into crypto, that's for sure. As for what tokens / assets to hold, that's a personal choice and depends on one's risk appetite.
As for the new ICO plan offered by the EOS team, I'm optimistic but honestly, I find it a bit overcomplicated. Hopefully, the lack of familiarity doesn't end up biting the EOS project's ICO in the butt.