EDG token buyer’s protection
Edgeless ICO day is approaching, so we are going to release more information on our Edgeless Token.
Due to the many the poor ICOs that have come before, more and more token buyers are getting serious about their fundprotection. Since a crowdsale is a ‘product’ for participants, we will outline here the main crowdsale governance elements protecting token buyers from scams, token devaluation, or a failed ICO.
1. Smart Contract Escrow — The ICO is based on Ethereum Smart Contracts which automatically govern all ICO process. Contracts are uploaded to the blockchain. During the ICO it’s impossible to interfere with this process. It also works as an escrow. What that means for ETH is that the smart contract automatically sends EDG tokens to participants. Other famous projects which have used the same escrow system are golem, vDice, and melonport.
2. Smart contract protection from hacking: Edgeless ICO uses officially tested/ released Ethereum Foundation contracts. We also build our contracts on that. However, ICO contracts are relatively simple, so there are not so many points at which it can be hacked. Moreover, we are carrying out significant contract testing prior to the ICO, and our contracts will be audited by First Blood’s IT advisor — Mikko Ohtamaa. Similar contracts have been used by other successful ICOs, such as golem, vDice, melonport.
3. Early participant protection — ICO minimum goal. We set milestone 1 as a minimum ICO goal of 50 000 000 EDG tokens sold (41666 ETH — 50 000 ETH). If this minimum goal is not reached, the ETH is automatically returned to participants. This process is guided by a Smart Contract, and it also protects early token buyers in the event the project does not raise sufficient funds for development.
4. Unsold token burning — The ICO sells 440 000 000 EDG tokens. Unsold tokens are automatically burned by the Ethereum Smart Contract. Token buyers are thereby protected from possible token devaluation, for example, in the event that half of the tokens were not sold, and a development team was in a position to devalue the token.
5. The dev. team gets 10% of the EDG tokens. Tokens are automatically locked for 12 months by a Smart Contract. This means token buyers can be sure that the Edgeless dev. team has an economical incentive to increase the value of the token, and token buyers are also protected from the risk of immediate token dumping following ICO.
6. Instant Bounty participant payouts are made based on the ICO ETH raised. Other part is released over time. This protects token buyers from bounty participants dumping tokens early and devaluing the token.
7. What if I do not understand Smart Contracts and I cannot be sure that all the points mentioned above are actually programmed into the contract? Actually contracts are not that long, and we will release a medium post explaining which line is responsible for which of the above functions. Our contracts will also be audited by a 3rd party to confirm that all the token buyer protection functions mentioned above are actually programmed into the contract.
8. Profit sharing tokens risk NOT appearing on large exchanges. That’s why our project does not offer a profit sharing token or deal with exchanges beforehand.
9. Project communication after ICO: Following the ICO, weekly project updates will be issued via newsletter/ twitter/ blog and other channels. In this way the blockchain community and token buyers can see the direction of the project. Constant project communication also raises the value of the token and helps the project to grow even more.
10. Raised funds diversification. Cryptocurrency value jumps around quite often and there is a risk of ETH price going down. Therefore, to protect raised funds from unpredictable pricing, the fund will be diversified into several different assets.
What do you think about token buyer’s protection which is available due to power of an Ethereum Smart Contract?