By
Kofi Ansah
September 20th, 2022
Blockstarter aims to make trustless ICO environment utterly reliable by creating an ecosystem, which will allow anyone to launch a provably honest ICO campaign.
The ICO market has experienced a mind-blowing hype this year. While the most of the community believes it is in decline now, the aftershocks seem to keep on hitting the industry with dozens, if not thousands, of new crowdsale campaigns kicking off every week.
While hypes come and go, this method seems to have become a well-established way of raising funds for a project. In the early days of the blockchain era startups and innovative companies had to seek financial support from venture capitalists and funds, but those days are gone now. Hype or not, it seems more than possible that new projects will prefer to use ICO model over more traditional ones from now on.
The ICO Glut
Ethereum as the first platform of choice for token sale campaigns has also experienced a tremendous upsurge during this summer. Most tokens issued by those up-and-coming companies were (and are) compatible with Ethereum’s ERC20 standard and use the platform’s infrastructure. Using Ethereum seems to be a questionable solution for certain community members who cite BitShares, Waves or Aeternity as more reliable options, however, this criticism didn’t stop newcomers from turning to Ethereum.
The ICO hype was compared to tulipmania, which, ironically, is the same term that certain traditional finance players used to describe bitcoin a few years ago. However, bitcoin looked relatively harmless to them, especially when compared to the ICO model which most regulators believe to be a nearly-fraudulent venture.
The infamous SEC decree and alarming moves of the Chinese government have apparently sobered some ‘disruptors.’ These days it’s a common courtesy to dedicate a screen at a project’s landing page to assure potential contributors that the company’s tokens can pass the Howie test. Regulatory issues even tackled the very language of the industry: while a year ago the term ICO seemed perfect, now there are numerous synonyms invented for legal purposes: crowd sale, token sale, token generation event, contribution campaign, and so forth.
Still, after the establishment of Enterprise Ethereum Alliance, which is an umbrella organization for an enormous number of companies, it seems that the ICO model, whatever its name would be, is here to stay: with giants like Microsoft, MasterCard or Intel being the members of the alliance, it seems that ICO will garner much mainstream acceptance a little ways down the road.
Chaos and Creation in the Cryptoindustry
The world of ICO’s has seen a lot of weird stuff. Some projects were rightfully or wrongly accused of scam; the glut of new projects has turned the list of existing cryptocurrencies into the longest scroll in the history of the humankind; and some projects have been hacked in the middle of their campaign.
The lack of trust and any community-driven regulation have driven the entire ICO industry in some sort of a chaotic state. Regular users have no chance to know for sure whether a new project is worth investing in, or it’s just another castle on the sand.
While in theory the community and its collective wisdom could decide whether a project is worthy, in fact it has never gone as planned. Those hacked projects have been repeatedly accused of staging the hack to run away with all the funds they have raised. It’s not even the question of whether it’s true or not; it’s a more profound question of the actual impossibility to prove anything in the world of blockchain, which was intended to be utterly transparent.
Could This Be the Solution?
The problem of bringing some order into that chaos is quite viable for the entire industry, however, there have not been much attempts to have this issue solved.
One of the most remarkable solutions was offered by Blockstarter, a project that develops a platform for ICO’s. Once developed, it will feature a user-friendly interface; numerous options like customized smart contracts written automatically for specific purposes of a project; and an API for third-party websites that would empower a campaign, among other options.
While it all seems quite promising, one of the most important features proposed in this solution is the utter reliability of the entire ecosystem.
Andrei Stehno, the CTO of Blockstarter, says:
For now we’re testing the solution with projects of two kinds: experimental and reliable. The former are used to prove the model they propose, so they are launched for research purposes. The platform actually checks the company’s ability to implement their project following the tested and provably reliable model.
Thus, once deployed, the ecosystem will allow anyone to launch a provably honest ICO campaign in a trustless environment.
These days, there are numerous companies in traditional industries like logistics, retail, or real estate that opt to use the ICO model to deploy a decentralized solution based on blockchain technology. However, quite often they cannot develop the entire IT infrastructure to support their campaign, and holding it proves to be quite a difficult thing to do. With the friendly and comprehensible user interface it would take them only few minutes to launch and support their campaign.
However, most importantly, such a solution could become the first step in developing a trustworthy standard for crowdsourcing campaigns that the industry desperately needs. Such standard could cut out all scam projects, let more interesting projects in, and eventually become the link between traditional industries and the cryptoindustry.
