4 ms·

ICOs are being over-used in the context of blockchain oriented companies. Tokens were never meant to be a fundraising/shareholder vehicle, they were designed ai

ICOs are being over-used in the context of blockchain oriented companies. Tokens were never meant to be a fundraising/shareholder vehicle, they were designed aide distributed apps in their mission of decentralization. Tokens are meant to allow you to decentralize the operation of an app, not provide a means for fundraising. Augur is an example of a useful token, they issued a token as a means to decentralize the oracle for the markets that will be created on their platform. Their token (REP) obligates the holder to adjudicate market resolution on their platform in exchange for fees. Most of these ICOs are just mechanisms to raise money for blockchain based businesses.

DennisP 9y ago
That's one viewpoint, but token sales have been used as fundraising for several years. One of the earliest descriptions of a token sale on Ethereum is in the tutorials on ethereum.org; one quote: "Do you already have ideas that you want to develop on Ethereum? Maybe you need help and some funds to bring them to life." And of course Ethereum's own crowdsale in 2014 was a fundraising operation that made the whole project possible, and Augur itself used the money it raised in its token sale to fund development.