The founder of the Ethereum Blockchain platform, Vitalik Buterin, proposed a new model for fund-raising for start-ups with the help of Blockchain technologies instead of the usual ICO. Buterin called the proposed DAICO mechanism, since it should combine the features of ICO and the decentralized autonomous organizations (DAO).
The main the idea is that the development team which is looking for funding issues a DAICO contract. In the “donation mode”, anyone can send to the ETH contract address and receive tokens in return. The deal can be in any way: it can be a sale with a cap, a Dutch auction, an interactive offer of coins, dynamic sales under the rules of KYC or any other mechanism. Once the term of contributions is completed, users can no longer contribute ETH. From this moment, the balance of the initial tokens is determined, after which they can be traded.
According to Buterin, such model protects the interests of project investors, allowing to reach a consensus within the community on the share that developers can deduce from borrowed funds for their needs. Also, according to Buterin, this will create a reliable defense against the attack of 51%, when most of the resources are in the same hands.
Earlier Buterin repeatedly criticized the current mechanism of ICO, as it is used primarily to attract as much money as possible, and not to create useful developments.