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Digital asset early investors are to get relief from the risks associated with traditional ICO, STO and also IEO as emerging DYCO (Dynamic Coin Offering) has become a better alternative framework for crowdfunding.
The fears that scammers will sell fake news to make uninformed investors put their money into the project might soon be a thing of history. The digital currency sphere is changing rapidly in a way that it is aligning with the regulatory policies ahead of mass adoption.
As a result, days of projects emerging every other day, and collecting a significantly huge amount of capital from investors, and walk free might be buried forever. This was a trend that was mostly observed during the 2017/2018 crypto bubble that saw a lot of investors’ funds get multiplied in up to 1000.
However, the after-sale of tokens in that period also brought out a lot of victims, whereby several projects went dark after crowdfunding. Regulations remain the top hindrance in mass adoption both by retailers and institutional investors.
What DYCO (Dynamic Coin Offering) Can Provide
According to a detailed article by CoinGape, DYCO is the first early-stage token investment opportunity, which creates a price floor in the secondary market, hence offering protection to investors without any sort of limitation.
Some of the main characteristics of a DYCO crowdfunding is the burn and supply reduction, assured token buybacks, and also trust-less locks. A Dynamic Coin Offering has five key market participants including DYCO participants, FOMO-driven traders, Arbitrage traders, fundamental-driven traders and finally the project’s Buyback Treasury.
The participants are strategically designed to generate ongoing volume and liquidity for the token sold through the DYCO way. One thing that is to be clarified with tokens issued through this method is that they are not stablecoins as they possess similar traits. However, they are utility tokens that are prone to a speculative value before the launch and also affected by the utility value after product launch.
Once an investor takes part in the token sale, their blockchain address is whitelisted for purposes of buyback claims. This is done to mark the eligible addresses for a buyback. This assurance gives the participants the exclusive advantage of arbitrage opportunities if the market price ever falls below the agreed price.
According to DYCO inventor, crowdfunding creates a price floor to allow the participants to claim a risk-free profit whenever the market price falls below 20% of the ICO price.
With this kind of crypto mindset, investors are likely to increase in different token initial offerings as the regulations favor them to risk their capital.