Hello, BitcoinTalk!
Next month we’re announcing the ICO of our company, Royal Kingdom Enterprise. We’ve prepared the website here:
https://royalkingdomcoin.com/ This is not an official announcement thread per se (we’ll create one a few days prior to the ICO start date). We’re doing the ICO for the first time, and because this is a community thing, and because some of the ICO features are a bit unconventional, we’d like to hear your thoughts on it, and maybe some of your suggestions will end up in the final version.
Again, you can see everything detailed on the
ICO website, but, basically, the unconventional bits are:
1. Instead of doing the usual crowdfunding as others have been doing, our ICO is more similar to IPO: instead of selling 100% of tokens, we’re selling 20% (18%, if we don’t count the pre-sale investors). It’s because, unlike others, we already have products, sales, the company is active and paying salaries, the partners had invested their personal money and time to get this off the ground, so it’s similar to the company going public and presenting some percentage of the shares in an IPO.
* But then, the 82% seems like a threat to the coin price. The major coin holders are not going to sell the whole thing on the exchange. If anything, they would do a private sell that wouldn’t affect the market price (and that’s usually how big shareholders in traditional company sell their shares). But it’s not very convincing and calming, is it? Perhaps the smart contract algorithm to limit the huge transfers from those wallets would help?
2.There have been many solutions to answer the question “what’s in it for me”. Some tokens bought in an ICO were going to be useful inside whatever product they asked to fund. Some managed to pay dividends to the token holders, like in traditional companies. Some are just plain useless and only designed to benefit the authors - after they got ether or whatever from the ICO (or premine in the altcoins), the tokens are just being traded on the exchange, and the price follows the Tinkerbell law. We’ve decided to do something different. We will use the funds from the ICO to facilitate the company processes, and then use the 50% of our profit (profit being revenue minus costs) every month to buy the coins off of the open market (thus increasing the price), and then burn them (thus shorting the supply and increasing the scarcity). Token holders can trade the difference or hold longer for the better price. And 50% will be reinvested in the company. What do you think of it? Do you think it’s easy to understand the underlying economic mechanisms and does it seem straightforward?
3. Instead of setting a fixed price per token and thus trying to evaluate our own company (and let’s be honest, it’s always biased), we’ve decided to let the algorithm in the smart contract discover the market price automatically. Basically, we have a low fixed starting price, which is being slightly increased by the algorithm whenever someone buys the token. We’ve made sure to aim very high, almost impossibly high, so that at some point market will just stop buying the tokens. And at this point, the market price will be discovered, and when ICO is closed, the contract will burn the rest of tokens in the ICO pool. So, this raises two questions:
* First of all, it seems unfair to burn the unbought percentage, because the percentage of pre-sale tokens will de-facto increase. But re-distributing the unbought ICO pool between token buyers is tricky; and, also, it will create an incentive for the people who already bought the tokens to generate FUD so that others will stop buying and there will be left as much as possible for them. Versus the scenario where they will want people to buy more because it will increase the price. So, maybe chopping off the same percentage from the pre-sale token holders would be fair? Burning the same amount of coins proportionally to what has been burnt when ICO closed.
*Second, should we allow the algorithm to go both ways, and lower the price when people stop buying? It would be more tricky technologically and could irritate some that bought it by the higher price earlier. But it would also make the market price discovery more precise and increase the result for the team.
4. Here is the
contract source code for everybody to see. I’m still iterating on it though. But all suggestions are welcome.
So. What are your thoughts?
Serge,
CTO of RKE
