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A Summary of

Explanation of DAICOs

by
Vitalik Buterin
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DAICO

  • Improve ICO model by merging in benefits of DAOs in a way that minimizes complexity and risk
  • Step-by-step: 
    • Development team wishing to raise funds for a project publishes DAICO contract
    • Contract starts off in “contribution mode,” so anyone that contributes ETH to the project gets tokens in return
    • Once contribution period ends, the ability to contribute ETH stops, token balances are set, and the tokens become tradeable
  • Token holders can vote on resolutions; the intention is to start off with a reasonable monthly budget and increase it as the team demonstrates capability

Game-Theoretic Security

  • Any vote is subject to 51% attacks, bribe attacks and other game-theoretic vulnerabilities
  • DAICO minimizes these risks, requiring both the developer and the vote to be compromised to cause real damage
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