The ICO Governance Foundation, or IGF, aims to clean up the ICO market by providing a self-regulatory protocol. Find out how it works today in our review.
What is the ICO Governance Foundation?
The ICO Governance Foundation is a self-regulatory protocol for ICO capital markets. The goal of the foundation is to clean up the ICO market.
Obviously, the ICO industry has a good and bad side. On the bad side of things, the industry is rife with hackers, scammers, and opportunists. On the good side, ICOs give investors around the world an opportunity to participate in exciting ventures, while companies can access new sources of fundraising.
The ICO industry clearly needs more oversight. ICO Governance Foundation wants to provide that oversight without detracting from the main benefits of ICOs. That’s why their oversight is voluntary and self-regulatory.
The ICO Governance Foundation is positioning itself as a decentralized global organization and Swiss foundation founded with the mission of establishing a protocol-based global community that performs a self-regulatory function for ICOs in decentralized capital markets.
How Does the ICO Governance Foundation Work?
The key self-regulatory feature of the ICO Governance Foundation is an open, voluntary, public filing and registration protocol for ICOs. That feature is called Form IGF-1. It will be provided and maintained by the ICO Governance Foundation.
In addition, the ICO Governance Foundation will provide a public registration database that performs automated collection, validation, indexing, acceptance, and forwarding of all submissions.
Obviously, ICO laws vary around the world, and two countries might have different requirements. How does the ICO Governance Foundation plan to address that? Here’s how they explain the issue:
“IGF works with national regulatory agencies to establish global best-practices and standards for ICOs that complement national regulatory organizations such as the SEC, ESMA, CSRC, MAS and others.”
IGF-1 will also provide transparency during the token sale process – like the custody chain and the distribution of ICO proceeds. The foundation and its standard protocols are part of a Global Public Utility and industry self-regulatory function required to improve the quality of the ICO industry.
The ultimate goal of the ICO Governance Foundation is to enhance transparency and trust in the world of initial coin offerings. They want to provide the industry with the “self-regulatory function that is needed to align stakeholders and to improve the volume and flow of capital incentives for ICOs from institutional-grade investors.”
You can see specific details required in the form submission process below.
How to Use the ICO Governance Foundation’s Self-Regulatory System
The IGF’s official website has already launched their form IGF-1 submission process online. You can submit your form today at ICOGovernance.org.
ICO Governance Foundation Features
The IGF aims to implement all of the following features:
The IGF will have a web-based form where whistle blowers can point out breaches in best practice governance standards for the more egregious cases. Decentralized reviewers can review the reports.
The Foundation can publish alerts for discussion and public commentary, and alerts will be provided with a mechanism for public discussion. All alerts will be verified and validated in a decentralized, community-driven way.
IGF compares its filings database to the EDGAR online database offered by the SEC. It’s an actively-maintained database of form IGF-1 filings for public view and comments.
The ICO Governance Foundation will require background checks for all registered members of the ICO’s leadership team (assuming the ICO wants to sign a custodial agreement with the IGF).
Form IGF-1 Filings:
Form IGF-1 is the key feature offered by the ICO Governance Foundation. This form transparently issues information about the token distribution process, then opens that information to public review and commentary. The form also outlines the investment structure, the flow of capital, and other incentives related to the token sale.
The IGF can maintain smart contracts that govern the ownership of assets distributed during the token sale, giving companies an extra layer of transparency to show investors.
The ICO Governance Foundation’s supervisory boards will be used to adjudicate agreements and manage the custody chain, including bank accounts or cryptocurrency wallets associated with the ICO.
What Information Will the ICO Governance Foundation Collect About ICOs?
Companies can submit an IGF-1 form through the ICO Governance Foundation in order to provide greater transparency about their project. This can give investors an extra layer of trust. All information is publicly viewable after submitted through the form. Key information revealed through the form will include:
Company mission, goals, and objectives, including how the company is seeking to raise capital, which measurable goals the organization seeks to achieve, and the timeline on which it plans to achieve those goals.
Organizational structure and leadership, including key members involved with the project, as well as the legal status and registration information for the organization.
Custody chain, including which organizations or individuals will hold the private key(s) to the wallet in which ICO funds will be held.
Open source reference implementation ownership, which includes a description of licenses used by the ICO and company (if there’s a software component to the product).
Open source community information, including disclosure of the size of the committer base and the volume of pull requests, along with the total size of the codebase.
Protocol ownership, including who owns the copyright and IP for the protocol used by the company.
Trademark ownership, including any trademarks associated with the token sale.
Existing business operations, including the extent of any businesses currently run by the team.
Promotional activity, including marketing plans for the token sale, token giveaway information, beneficiaries of the giveaways, and more.
Jurisdiction, including the legal incorporation of the organization and the geographic area where the organization is located.
Founder and employee token reserves, including the minimum and maximum number of tokens allocated to the company.
Company and ecosystem tokens, including the percentage of circulating tokens and maximum tokens allocated to company operations.
Advisory tokens, including which percentage of circulating tokens and maximum tokens are allocated to advisors.
Foundation tokens, including which percentage of circulating tokens are allocated to the foundation or similar groups.
Presale discounts, including the exact amounts paid per token by every entity that purchased tokens before the public sale.
Currency circulating caps, including the caps associated with tokens for sale.
Inflationary or deflationary currency, including any future issuance plans or token burning schemes designed to influence the price of the currency.
Fundraising cap and market cap, including any caps on the amounts raised during the crowdsale.
Exchange and liquidity, including which exchanges will list the token after the ICO is complete.
Token lockups, including any information about a token lockup period for investors or the team.
Contract audits, including information about who audited the smart contracts used in the token sale.
Security procedures and audits, including audits for all other levels of the organization, as well as security procedures in place to protect the ICO and its funds.
Terms and conditions, including any additional information about the restrictions of the token sale.
Declaration of risks, including the risks and problems that may arise as the company seeks to achieve its objectives.
Background checks and declarations, including a description of whether or not the founding team has undergone an independent background check.
Ultimately, the ICO Governance Foundation isn’t requiring companies to disclose any or all of this information. Remember: this is a voluntary, self-regulatory program. They will, however, outline certain “best practices” that ICOs are recommended to reach. All of the information listed above will be recommended as “best practices” for an ICO.
As you can see, many reputable companies already outline all of this information in their whitepaper. The ICO Governance Foundation is just creating a more formal structure and set of guidelines.
About the ICO Governance Foundation
The ICO Governance Foundation is a Swiss non-profit organization. The organization is led by Miko Matsumura (Limited Partner at Pantera Capital ICO Fund, Founder of Evercoin Exchange, MS Yale University), Michael Golomb (experience in 2 IPOs on NASDAQ and LSE, founding CFO and board member for Bitfury, Stanford GSB, CPA), Olga Feldmeier (CEO of Swiss investment startup Smart Valor, host of ICO Summit Conference), and Dr. Fred Kreuger (CEO of crypto startup Troop, Stanford PhD).
Crystal Rose and Ryan Selkis are listed on the board of advisors.
The foundation is a Swiss foundation, but is registered to an address in Santa Clara, California.
ICO Governance Foundation Conclusion
Obviously, greater transparency and oversight could benefit the ICO industry. The ICO Governance Foundation, or IGF, aims to provide that oversight. The foundation’s core feature is its IGF-1 form, which allows companies to submit critical information about their ICO to the world. Companies can also register with the ICO Governance Foundation to control token sale smart contracts, or to request background checks for founding members.
To learn more about the foundation’s goals and strategies, read their whitepaper (https://icogovernance.org/wp-content/uploads/2017/09/Governance-of-Token-Sales-in-Decentralized-Capital-Markets-0.8.pdf) here or visit them online today at ICOGovernance.org.