dICO Whitepaper - SuperNETorg/komodo GitHub Wiki

Fully Decentralized ICO Using The Komodo Platform

The most important part of a decentralized crypto coin/asset's lifecycle, the ICO, is centralized. Being centralized, it is subject to the whims of government decrees about what can and cannot be ICO'ed. As long as you pay the required toll fees, you will be granted a license to sell coins/assets, unless it is deemed that it won’t be approved for whatever reason. As for how long this process takes, that is totally in the hands of whatever government agency is dealing with it.

People should have the right to barter what they own for whatever they want (assuming it is not a universally illegal item). People should also have a right to privacy, or at least a right to not self-incriminate.

Any government is free to proclaim any specific crypto to be totally illegal for its own citizens. However, it is not right that any single government can dictate to the rest of the world what is and what is not illegal. Assuming we can agree on this, we are able to create a totally decentralized ICO, making it also exponentially more difficult for whales to gobble up the entire amount for themselves.

A fully decentralized ICO as compared to a centralized ICO, would be like torrents versus Napster. As much as a government would like to be able to control (dictate) what people can do with their own money, they won’t be able to.

There are two sides to an ICO: the offering side and the purchasing side. We will assume that purchasers are adults who are capable of thinking for themselves and don’t need a nanny state to decide what they are allowed to do with their own assets. Furthermore, invoking the thousands of years old right to barter, it could well be that lawyers can find grounds in common law to supercede the more recent regulations. After all, if you own something, shouldn’t you be able to barter it for something else? If you are prevented from doing this, in effect, you have lost ownership. And if you didn’t consent to this, it seems a lot like a theft has taken place.

In case that your rights are being infringed, it should be within your power to mitigate damages using reasonable means, for example by using the Komodo Platform.

The first step is to create funds that are private and that only you know how to access. Since you are the only one with this knowledge, only you can incriminate yourself (if it is indeed against your local regulations for obtaining an ICO). We will assume that you prefer not to self-incriminate, nor do you feel like giving up your privacy. What you do with your own funds, privately bartering for an ICO, can only hurt yourself in case the ICO fails. Personal financial control and privacy implies that you are solely responsible for your own capital. Therefore, investing it wisely means that you need sufficient knowledge by doing your own research. Equally important is possessing the ability to assess the level of risk of each of your investments. If an ICO fails, causing you to lose money, you have only yourself to blame, as it was you making the decision to invest in it.

By using JUMBLR, you can create private KMD to use as you deem.

Now, let us envision a BarterDEX order book full of an ICO's unspent transaction outputs (UTXOS). BarterDEX can be used to barter your private KMD UTXOS for an ICO's. It is a direct swap without anybody in between. There can be no money transmitter issues when your private KMD are being swapped directly. Your private KMD is converted into a private amount of the ICO in a totally private address. Nobody knows that this happens, except you. This is true financial freedom.

From the issuer's side, when using Komodo Platform's “assetchains” feature, it turns out that technically there isn’t an ICO at all as all coins are issued on the first mined block. This is done privately by the issuer. Because running a blockchain and issuing coins to yourself is not legal, it implies you are in a totalitarian state and must make plans to relocate.

Once you have all the coins for the ICO, they need to be split up into a large number of small UTXOS and be distributed across dozens (or hundreds) of servers around the world. It is hard to fathom any way that this process violates any laws of any country that respects human rights. In this case, the right to use computers and the internet.

At that point, there will be thousands of UTXOS of a small enough size to be below any reasonable KYC requirement. Of course, the issuer should have legal representation and a friendly jurisdiction (like Singapore or Isle of Man) to be the domicile for all the legal paperwork. It might be that an IP based geo-filtering for the USA and China needs to be added to prevent citizens of those countries from violating their own laws. We might need all participants to self-certify that they are not doing anything against their own local laws or at least indemnify the issuer against any damages.

Then the issuer runs the BarterDEX and sets prices for the UTXOS. As soon as this is done, people can “order-match” and obtain part of the ICO. However, keep in mind that it is not the intention to have one giant whale sized order to obtain the entire amount offered. The global distribution and usage of the BarterDEX process limit the number of UTXOS any single person can obtain at a time. Given a large demand, all diligent participants are expected to acquire a proportional amount to their bids.

An additional advantage of a decentralized ICO is the immediate availability of a trading market. In fact, the ICO itself was distributed through this very trading market, meaning all decentralized ICOs will start trading right away.

Komodo Platform utilizes its existing technology base of Jumblr and BarterDEX to create a game-changing method for conducting a fully decentralized ICO. Monaize will be the first of many to issue their ICO, completely decentralized, on Komodo Platform.