A new method of crypto crowdfunding has emerged in the form of Dynamic Coin Offerings (DYCO), which could replace more traditional methods such as Initial Coin or Exchange Offerings.
Many industry observers have attributed the high risk ‘Wild West’ nature of Initial Coin Offerings in 2017 and 2018 to the subsequent bear market which resulted in the price collapse of the majority of altcoins.
The prevalence of scams and fraud in the ICO scene a couple of years ago definitely attributed to a wave of regulations and rules that have swept across and hampered the industry over the past two years.
IEOs, or Initial Exchange Offerings, were one solution but they too are not without their inherent drawbacks. Major exchanges such as Binance can effectively pump an obscure token sky high by giving it all of the backing and hype.
This is akin to market manipulation and centralization which goes against the ethos of the entire industry.
DYCO: a new way of crypto crowdfunding
Enter the Dynamic Coin Offering, which could revolutionize the way crypto crowdfunding takes place.
A DYCO is a token sale framework in which utility tokens are USD-backed for up to 16 months. This generates a stable token sale model that has the freedom to move upwards.
Through a system of guaranteed buybacks, financed by 80% of the raised funds, a DYCO’s downward movement is limited.
The speculative and utility value of tokens launched on this model are based on product success, demand in staking, revenue-based buybacks, product fees, and token-based loyalty programs.
This effectively creates a limited downside, or a virtual stop-loss, for DYCO investors while granting them full exposure to the success and appreciation of a token from the day it is launched.
Buyback rounds, token burns, and supply reductions are carried out in order to further ensure that there is upwards price momentum.
Trustless locks are also employed to prevent teams from dumping tokens on the market and devaluing them.
Orion, the first DYCO
The first project to embark on the DYCO system is Orion, which is a trading terminal that seamlessly aggregates bottomless liquidity from all major crypto exchanges.
The platform solves one of the largest problems in decentralized finance (DeFi) by aggregating the liquidity of the entire crypto market into one decentralized exchange.
Orion will be the first token sale to implement a DYCO framework, with its ORN tokens to be USD-backed for up to 16 months after the token generation event.
There will be three buyback rounds over this period during which 100% of tokens are refunded back for 80% of the sale price, meaning that refunds can potentially push the supply back to zero.
Orion is set to break ground both through its pioneering token offering method and attempting to solve one of DeFi’s greatest problems.