Taming the Whale: The developer Nick Johnson says it can fix the ICO problem


nnnThe current ICO mechanism does not guarantee the fairness and equalization of the tokens, especially the ether-based tokens. So some projects began to focus on the relevant solutions, worked at the APC Foundation Custler also proposed as ICO for the second high price dark shot of the proposal that the solution after the popularity of a substantial improvement in tokens financing. The current code has been published, but not tested. However, once the solution is found, ICO participant authentication will no longer be a problem.n
nnTranslation: Annie_Xun
nAlmost every day, ICO is launched in the chain of etherflies, and “whales” are increasingly headaches.n
nBuy a lot of tokens, these big traders in fact to small investors excluded from this area. And by virtue of not only purchasing power. In some cases, the “whale” swiftly manipulates the system, using the market dynamics to facilitate the payment of higher than the average transaction fee. An ICO participant in May paid even $ 6,000 only to go beyond other buyers.n
nIn any case, whales bring great problems to the project. Because when one or two groups hold a large amount of tokens supply, they will have a similar central bank’s right to control the market.n
nBut developer Nick Johnson thinks he has found a way to make the toll distribution more even and reduce the congestion in the ether-based network. Johnson is not a novice codemaker and is employed by the Ethereum Foundation, a Swiss nonprofit organization that manages the etherfloft.n
nHis idea is to look at the ICO as an auction, extending the tokens to a few days instead of hours.n
n”I think it is wise to use a system that can create a market equilibrium price, rather than relying heavily on the time you are involved.”n
nSo Johnson proposed a new tokens to sell the smart contract, and believe that once popular, it will have a substantial impact on the market.n
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nAchieve balance n
nIf Johnson’s name reminds you of what it is, it is because he is the co-founder of the Ether Square Domain Name Service (ENS).n
nLike ENS, Johnson’s token sales are based on the second high price dark shot, that is, the subject matter of the seal. His idea is that people are more likely to bid for items of real value as long as they are not influenced by the auction object of others.n
nJohnson’s tokens are sold as follows: First, the seller or the project owner sets the maximum amount of tokens to be sold, or the target. With any one as a limiting factor, but Johnson expects that in most cases, the tokens will be variable and the target will be fixed.n
nSecond, the seller publishes the time limit for the potential tokens buyers to bid. The bidder submits the maximum price and the amount of money that is willing to pay.n
nWhen the auction time is over, the seller estimates the traded price or estimates the optimal token price based on the bid quotation (in this stage, the bid quotation can be published, and each person can see the quotation and purchase amount of each tower address).n
nA bidder whose bid price is fixed, which meets or exceeds this price, can redeem the tokens at this price, and will be refunded at less than the price.n
nIt is worth noting that the transaction price estimate is part of Johnson’s coin sales, outside the chain of the tower. But the seller still gets the correct estimate of the incentive.n
nIf they will be high prices, will lose the low-end market sellers; the other hand, the internal limit on the amount of currency will take effect. The transaction price is to raise the largest funds, as well as the smallest tokens sales.n
nJohnson suggested that the seller announced the auction price at the same time the bid, so that the bidder can verify that the transaction price is indeed correct.n
nAt present, Johnson has released the relevant proof of the Solidity code to Github. But he warns that the code is not tested and can not be used for production. And he said that despite the completion of the project, but as long as people need, he can come out audit code.n
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nLimitn
nBut Johnson’s advice is conceptual, so many ICO projects are trying to find ways to expand the tokens distribution, but not always successful.n
nA significant solution is to set a cap for a single sale. But who does it? Everyone in the block chain is anonymous, such as the etherfront user’s representation is hexadecimal etherbox address. This makes it easy for individual entities to create multiple virtual accounts.n
nThe last two projects highlighted the challenge.n
nRecently raised $ 100 million in the etherbox communication application Status tried to use the “dynamic limit” to set a single transaction limit. When anyone tries to use a lot of money to buy tokens, only a small part of the offer is recognized, the rest is returned.n
nWhen some buyers write a note to allow them to send a transaction request from multiple etherbox addresses, the idea is counterproductive. So the ICO contract by the witch attack, sales activities after the end of a few days, many transactions or to be determined state, so that the overall slowdown in the ether square network.n
nStatus ICO, OmWorksGo decided to take a different approach based on the ether-based center-based exchange.n
nThe project eventually to almost all 25 million US dollars tokens sales to the brokerage firm Bitcoin Suisse. In order to purchase OMG tokens, buyers must register their accounts to verify the identity of the real world.n
nOmiseGo special adviser Thomas Greco said that although the use of intermediaries contrary to the spirit of the chain chain (the main purpose is to let all go to the center, including the user identity), the project had no choice.n
n”We are studying and frustrating to realize that we currently do not have a secure chain of coin sales.”n
nBut if Johnson’s tokens concept is deployed quickly, future ICOs will not need a third party.n
nJohnson summed up its advantages:n
nn”If you build the system, you can determine the market price, everyone can participate in the market at this price, the whale can not get too much advantage, then you are true people do not matter.”n

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