A new white paper co-authored by Ethereum founder Vitalik Buterin has been published, that details a potentially paradigm-shifting model for initial coin offerings, commonly known as ICOs.
The protocol represents a collaborative effort between Vitalik Buterin and developer Jason Teutsch, the driving force behind popular smart contract scalability project TruBit. The prospective model outlines a system that seeks to produce equilibrium between capped and uncapped token sales.
Released at the end of September, the white paper presents a system that would allow an ICO to respond to the actions of investors. Using the prospective system, buyers are provided with the ability to make dynamic purchases relative to a real-time valuation by submitting a valuation table that functions in a similar manner to a smart contract.
In simple terms, the white paper outlines a protocol that provides buyers with the option to withdraw investment bids on tokens, while at the same time shifting bids in relation to the buyer’s stake when compared to the entire ICO. This system as a whole intends to provide a solution to the issue of ICOs selling out either too quickly, or not at all.
While the system outlined in the white paper is in the earliest stages of development, it serves as a reactionary measure in response hysteria that has surrounded the ICO environment recently. The ICO ecosystem has recently experienced a glut of ICOs that have alarmed industry participants, so the democratic model the new system represents could inject fresh optimism into the under-regulated industry.
Teutsch has recently been quoted on Medium, explaining:
“I hope that the present foray into algorithmic game theory will encourage our community to continue to think explicitly about assumptions and goals for crowdsales as we experiment with and build upon the trustless, cryptoeconomic power of smart contracts.”