It looks like Ethereum’s developers and entrepreneurs have finally recognized the perils of being associated with the massively fraudulent ICO market.
ICOs have exploded since the beginning of the year as companies equipped with little more than a white paper sketching out some grandiose (and often highly improbable) killer app that somehow incorporates a monetized token trading on a blockchain much like bitcoin. So far, these offerings have raised more than $3 billion this year, and many of them are built on top of Ethereum’s platform, which enables the creation of decentralized “smart contracts” that can carry out higher level functions beyond simple transfers of value.
The tone of these remarks stands in stark contrast to the optimism about ICOs , which just earlier this year were being hailed as a groundbreaking tool for capable of revolutionizing how companies raise money.
Etherscan CEO and founder Matthew Tan went so far as to call ICOs ethereum's "killer app," a statement that aligns with the more than 10,000 token projects launched to date – 13 of which have eclipsed $100 million in total market value, according to Etherscan data.
It's an interesting take seeing how ICOs are typically touted as a means to circumvent traditional fundraising methods. But, du Rose's sentiments hint at a crucial criticism: that many ICOs are simply executing incorrectly.
The criticism comes as regulators in US, China and many other major markets for cryptocurrencies have taken steps to curb or regulate the markets. The SEC has been slowly clarifying its stance toward ICOs since this summer, when it first declared - in a finding about the DAO fiasco - that ICOs are securities that must be registered with the SEC and subject to US securities laws.To their credit, Ethereum developers have suggested some helpful “guidelines” of their own.
Here’s Jack du Rose, co-founder of ethereum startup Colony:
Ethereum developers largely believe that, at the very least, the individuals or company behind an ICO should have a prototype to prove their idea could theoretically work in practice. For instance, ethereum-based casino game platform FunFair launched an ICO over the summer, but only after releasing several prototypes.
And FunFair founder and CEO Jez San Obe had strong words about issuers that do it differently.
"You should have a product before you ICO, you should know how to run a company, you shouldn't have an anonymous team and you should release a prototype first," he told CoinDesk.
Stopico, an ethereum based campaign to regulate/abolish ICO has started a humorous campaign which involves a donation and a petition which is currently gaining attraction recently calling for investigation into ICOs more seriously, and ask tough questions about returns & obligations while demanding proofs & trustless mechanisms to ensure the token worth.
You can join the campaign here https://www.change.org/p/council-of-the ... lish-ico-s
or visit http://stopico.com
to learn more