Investing in new companies is very risky. Statistics show that 9 out of 10 startups fail because of a number of various reasons. Participation in public token sales is even more uncertain.
The newly presented opportunity for raising massive amounts of money in a short period of time – even by people not fully qualified to fulfill their promises, is combined with lack of regulations and often insufficient awareness and research by the regular person (investor).
The problems with the integrity and corruption among the ICO listing sites, influencers and in the crypto ecosystem as a whole also don’t improve the situation for the average investor.
There is a lot of noise out there when it comes to ICO scams and the funds lost in them, however, that will be a negligible number compared to the overall amount of money that investors will lose because of failed and abandoned projects.
Teams without enough experience, technical roadblocks, bad money management, inner conflicts, lack of professional qualification and dedication and many more factors will determine the future of many projects early in their existence. At the moments, it’s estimated that over 95% of the early-stage blockchain projects fail in the first two years of their existence.
Despite the risks pointed above we strongly believe that investing in early-stage blockchain projects is very needed and when is done right could be beneficial for every side, as it is a contribution to the progress of technology, aiming to bring a positive change and solutions to specific problems, alongside making a profit.
What, Why & How?¶
What is an investment insurance?¶
Secured with a refund option amount of funds, a percentage of the total investment made in a public sale of a project. If the project turns out to be unsuccessful - for example in case of abandoned, terminated or failed projects and token value drop - the secured amount of the insured investment is refunded to the investor.
The investment insurance is completely separated from your investment. The contributions to a project do NOT go through (is not made via) the dApp, meaning that you make it just like you normally do.
You can make your insurance request both before, as well as after you make an investment, but you must use the same Ethereum account that will receive the project tokens when they are issued.
Why I need it?¶
Securing your ICO/STO/IEO investment with a refund option mitigates your risk exposure to scams, project failures, and drastic token value drop. This allows you to greatly increase your earnings by profiting from the successful projects and reducing the losses from the unsuccessful ones to a minimum.
As opposed to some of the previously proposed (and never successfully implemented) solutions for risk reduction of the ICO investing, the dApp takes into consideration and uses the efforts of all type of participants in the process - owners, investors, and community, allowing each side to benefit from the platform. It does not put all the burden on one or the other and implements the most important DAO characteristics.
It is one of the most significant & mature decentralized applications to date. It’s not flawed by centralization or predisposed to corrupt practices and other anti-blockchain principles like some of the existing experimental token sale methods - for example, the Initial Exchange Offerings (IEOs).
The dApp reduces not only your exposure to the risk of a clear-case exit scam but allows the investors themselves to collectively decide a project state and reach a consensus over a project status as a whole - if it has been failed or not.
How it works?¶
The investment insurances are covered by a collective pool of funds with high liquidity, managed by public, open source and completely transparent community-driven decentralized application built on the Ethereum blockchain.
The platform incorporates all of the “DAO” principles. It’s fully open source, managed entirely by smart contracts and all of the data is stored on the blockchain. It’s run by the participants in it and they have different roles, based on their actions and goals.
During the 2-year project coverage period, every investor that has investment insurance is able to vote that the project has failed and request a ‘refund state’. If enough investors vote, the state will be assigned and investments refunded.
The concept in its core is similar to that of the traditional insurance practices, but executed by public smart contracts and adapted for the process of investing in early-stage blockchain projects and the crypto environment.
Supported Platforms & Projects¶
As of right now
(v. 1.0.0) the dApp only covers projects built on the Ethereum blockchain.
We are actively working on choosing the best possible solutions for adding more platforms
while keeping intact the fully decentralized and transparent nature of the application.
In order for a project to be integrated with the dApp, its token must comply with Ethereum ERC-20/ERC-223/ERC-721 standard or one similar to (compatible with) them.