What is Decentralized Autonomous Initial Coin Offerings (DAICOs)?
Decentralized Autonomous Initial Coin Offerings (DAICOs) are a method of funding and distributing a new cryptocurrency while minimizing the need for trust amongst the initial owners.
DAICOs aim to combine elements of Decentralized Autonomous Organizations (DAOs) and Initial Coin Offerings (ICOs). DAOs are organizations that function based on conditions written in code as opposed to human decisions. ICOs on the other hand are a mechanism for distributing coins at the beginning stage of the lifecycle of a digital asset.
As of the time of writing, DAICOs are still a theoretical concept as opposed to a working model.
What would DAICOs do?
DAICOs enable coin and token owners to have their funds returned to them in the case of certain predefined conditions. For example, if an ICO reaches a certain predefined market cap, participants keep their coins and the project keeps their funds for further development and marketing. However, if this ‘soft cap’ is not met, the project is considered failed and initial investments are returned to participants while coins are no longer valid.
Where did the idea for DAICOs come from?
The idea for DAICOs came from Vitalik Buterin, the founder of Ethereum. He proposed it as a method to protect potential ICO investors from fraud and other risks associated with early-stage crypto investing.