ShareHolder: ICO 2.0

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ShareHolder: ICO 2.0

Share Holder contract was created as an ICO 2.0: it is possible to run an ICO using this contract alone: no ERC20, no negotiations with third party Token exchanges... The contract works as a mini bank with shares as cumulative accounts: whatever profit arrives to ShareHolder, is distributed among shares; price of shares increases, accordingly.

https://duke-of-ether.com/images/share_holder_white_paper_01.jpg

Additionally (it means that the feature can be turned off), the contract can be used in a fund rising mode. To better understand this feature, let's consider a "traditional" ICO first. You buy tokens, and ICO owner gets money. Then tokens are traded at a market price (hopefully) covering token holders' initial expences.

Now with shares of a ShareHolder there is no market price: the price at any moment can be calculated as "initial price + profit accumulated" (an owner of a ShareHolder contract can also set a small trading commission).

An intended use of the ShareHolder contract is to attach it to your on-chain business, so that your business automatically sends part of its profits to ShareHolder. It is similar to dividends paid by "real life" companies, you can even write (in your contract) some complex rules to calculate those dividends, instead of just getting N% of a profit.

Now, if you have some group of busines co-owners, and want them to get their share of profit, it will work just fine. However, if you try applying this model to a fund rising event as it is, it will not work: you sell shares to strangers, add YOUR profit to them, and buy shares back at a higher price!

To make ShareHolder work for a fund rusing campaign, we have introduced the following changes to the model (can be turned on or off): People can buy shares at certain "initial price" and sell them back to the contract (it is much more convenient to do via Share Holder Web page) at zero price. It means that initial (crowd sale) money are distributed to a Contract owner.

Then as the business brings some profit, part of it is being sent to ShareHolder to be accumulated in shares; price of shares goes up and (in theory, if business is successful) at some point the accumulated price of a share exceeds its original price.

https://duke-of-ether.com/images/pricing.jpg

Note that ShareHolder has the "buy back" flag: if set, then as soon as a share holder sells the share back to the contract, it is being removed from the trading pool (so you don't have to give that profit away anymore).

Share Holder Web UI (You need to be logged into MetaMask)

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An official announce of an ICO

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An official White Paper

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ShareHolder Contract User Guide

ShareHolder: the concept.

No mater how nasty the license agreement is, there always are people tempted to (illegally) copy the contract in order to use it independently. Leaving aside all legal reasons, here are some practical considerations proving that using it through our contract is a better idea:

1. Web Site

2. Advertizing network

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What is in it for investors?

Before we go into steps, tools and time line, we need to answer the most important question: "what is in it for investors?" In the "real world" crowd funding campaigns, there are laws and regulations that make investment... well, it is not 100% safe, of course. But it gives you at least some promises. Unlike in block chain, where such regulations simply do not exist.

First of all, most ICOs do not answer a simple question: "what value do they have behind their tokens?" Will they buy them back at a fixed price? Mostly, they wouldn't. Will they pay dividends to token owners? No, there is no way for them to do it properly, and no obligation to do it, too.

This is a very important point: no mater how nice the "white paper" of a campaign is, a token, once issued, has NOTHING to do with a company. It can be traded at a market price, on online token exchanges, but: no dividends, no promises, no voting right in a company...

It is a token, it is not a share.

Until now. Our Share Holder contract allows to create a link between company's earnings and dividends paid. If a company does business in a block chain (we do) and if its contract is linked to Share Holder contract (ours do), then a specified fraction of all future profits is assigned to share holders. It is written in an Ethereum contract, it is in a block chain for every one to see, and we can not change it after the contract was deployed.

To use this technology to our advantage, we have added Share Holder as an optional feature to our

ICO Generator. And of course, when generating our own crowdsale contract, we used it: tokens you buy during our crowd sale are accompanied with ShareHolder's shares. Then, when crowdsale is over, tokens will be traded on online exchanges at a market price (which means that we have nothing to do with them anymore), but shares... Shares are different. For details, please read the Share Holder Tutorial; to put it briefly: they can ONLY INCREASE in price, and a pre-defined part of any profit we get will be sent there and become available to share holders.

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The following image illustrates the ShareHolder work flow. As an example contract we chose the "Duke of Ether" game, an "outside" contract sending a profit stream to ShareHolder contract. Note that a single ShareHolder can receive profit from unlimited number of contracts.



ShareHolder can work in parallel with ERC20 contracts, if necessary. Or you can create an ICO based on ShareHolder alone. Share holders can buy and sell their shares, and price of shares steadily goes up as more profit is being sent to a ShareHolder contract.

Of course, ShareHolder also supports bonus shares (for example, you can give free shares to developers team or to bounty campaign participants).

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Shares

In a perfect world, a SHARE would be a cumulative account: you put money in it when you buy it, and you get it back when you sell it (minus commission). Then a company (one that issued a ShareHolder contract) pays dividends, they go into your account, and price of your share goes up. Now you can sell it at a higher price.

However this business model just means that you will distribute your profit to strangers, for free. To justify issuing shares for the business, we have to turn it to a fund raising action. You SELL shares and take money (fund raising). When you reach the goal of your ICO campaign, you begin sending profit to shares, so their price begins to go up: from zero. Hopefully, at some point you will put enough profit for share holders to have a positive balance.

When you think about it, this is   exactly what happens with ERC20 based ICOs, except share holders profit from your business (if succeeded), instead of market fluctuations.

The following picture illustrates the pricing model for shares a ShareHolder contract manages.



First, we begin selling shares at min. price (an initial price). This is a fund raising stage of our ICO, as you can see, the price we offer to buy shares back is zero and funds raised are distributed to the owner.

After the goal is reached, the "buy back" price begin increasing: the more profit our business generates, the higher the price.

At some point we put enough profit to the contract for the "buy back" price to exceed the min. (initial) price. After that point, the both "buy" and "sell" price go up (as more profit is deposited), and the difference between them is just the trade commission.

Therefore, ShareHolder contract makes it unnecessary to use the 3rd party online exchanges: it serves as an exchange itself.

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Jan 10, 2018   

Alpha version of Signature Scanner (for Bitcointalk) is released
A final version of a Signature Scanner is scheduled for release right before the pre-ICO.

What is Signature Scanner?

Many ICO Campaigns offer their tokens as a reward for posts on bitcointalk.org having signatures advertizing that ICO. Counting those posts and assigning reward to participants is a task that should be automated, so we did it.

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As ShareHolder buys shares back, they can (unless you specify otherwise in your settings) become available for other people to buy.

Say, had a share, and you sold it. Now that same share is back in ShareHolder's pool. ShareHolder owns it, and whatever dividends and price appreciation it has, all belongs to owner of a ShareHolder contract. This is similar to company owning its own shares.

At any moment, a ShareHolder contract can sell that share to any one willing to pay the price. Note that as that share has some dividends in it, its price is higher. So a person buying share pays more than you originally paid. If she sells share, she'll get more, too.

Next dividends, next price increase, and so on.

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ShareHolder based ICO: Hands-on
Our ICO does not require KYC or any other kind of a whitelisting. It is 100% in-chain, based on a ShareHolder contract. We do not use ERC20, as ShareHolder can do similar job without relying on third party Token Exchanges.

ShareHolder contract acts as an exchange: it can sell shares to clients and it can also buy shares back. As our other contracts send profit to ShareHolder, price of a share will increase. Note that it will happen only after a fund rising is over, for details, see ShareHolder tutorials on this site.

To trade shares, you need to be logged into MetaMask (Chrome's plug in to access Ethereum block chain from a Browser). On a ShareHolder Web Page, enter number of shares you want to purchase and click "Buy". MetaMask will show you the confirmation prompt, and after a few minutes a transaction will go through.

Warning! Please familiarize yourself with the logic of ShareHolder ICO before investing!