NuCypher to Represent New Tokensale Mode

Team represented the WorkLock concept as an alternative for traditional ICO\IEO, which should fix their issues
29 March 2019   483

The developers of the blockchain project NuCypher have criticized the existing models ICO / IEO, suggesting an alternative model of tokensale called WorkLock.

At the beginning of the article, the developers focus on the main problems and limitations inherented by many traditional ICOs and already familiar to IEO, as well as the mechanisms for distributing coins through airdrops. According to them, after the emergence of the ICO speculative bubble in 2017 and its deflation in 2018, it became clear to many that the tokensales had many problems.

For example, the initial coin offerings attract a huge number of retail investors, whose main goal is short-term earnings, and not the use of a token. This negatively affects the product, while the ICO organizers themselves become, in effect, hostages of the market.

In addition, the industry is full of frankly fraudulent projects, often ICO start-ups do not adhere to the roadmap. It is also a common situation when startup participants receive huge rewards, while not offering anything meaningful to the market.

Among other things, NuCypher notes significant regulatory risks, particularly related to the activities of the US Securities and Exchange Commission (SEC). The latter often classifies ICO tokens as securities, imposing severe restrictions and penalties on their issuers.

The company believes that in an ideal token distribution model, speculative factors should be reduced, compliance with the requirements of regulators should be maximized, and opportunities for market manipulation should be limited. In addition, the mechanism should encourage participants using the token for its intended purpose, and, therefore, contribute to the growth of the cryptocurrency ecosystem.

The proposed concept called WorkLock suggests the following algorithm:

  • Participants in the token distribution escrow ETH into a smart contract where it is locked;
  • In return, they receive tokens;

WorkLock Scheme
WorkLock Scheme

  • Participants are free to use those tokens however they like;
  • HOWEVER, if participants use the tokens for their intended purpose (e.g. running staking nodes) they will recoup their escrowed ETH after producing some amount for work (this is separate and distinct from any in-network compensation from fees or inflation);
  • If participants choose not to use the token for its intended purpose, they forfeit their escrowed ETH, which is effectively burned;

WorkLock Scheme
WorkLock Scheme

  • Participants may choose to do more work (after acquiring additional tokens to stake) to recoup their escrowed ETH more quickly.

NuCypher is convinced that such a model creates incentives for participants to use assets for their original purpose. In addition, they believe that WorkLock increases the likelihood that projects meet the requirements of regulators, since the model does not imply the purchase of tokens for speculative profits.

The developers noted that WorkLock is so far only a concept that needs to be improved and which has yet to prove its viability.

OCamlPro May Implement Unplanned Tezos Hardfork

Anyone can fork Tezos' blockchain but Foundation says "OCamlPro management does not have the best interests of the Tezos community in mind"
18 June 2019   304

The non-profit organization Tezos Commons Foundation has published an official statement about a potential hardfork, which may be initiated by the French development team OCamlPro, the company's grantee.

As evidence, the organization published the text of an e-mail allegedly sent by Starchain Capital, a recently registered cryptocurrency fund.

According to the document, the management of OCamlPro and Starchain Capital announced a collaboration to develop and implement a fork of the Tezos blockchain called Dune Protocol in September 2019. The letter also says that Starchain Capital is attracting “investments to finance a separate project.”

Representatives of Tezos recalled that the blockchain can hold forks anyone. The problem, according to them, is the “OCamlPro management does not have the best interests of the Tezos community in mind".

We found the text also includes a number of inaccurate (to put it mildly) statements that are intended to exaggerate the position of OCamlPro leadership. They did not create OCaml, Fabrice was not the ‘teacher’ of Tezos co-founder Arthur Breitman, and the main Tezos engineers who were originally at OCamlPro are now working at Nomadic Labs, not OCamlPro.

Shaun Belcher

Executive Director, Tezos Commons Foundation

However, confirmation of whether the letter is an original or a fake has not yet been submitted.

OCamlPro participated in the Tezos grants program and worked on projects, Liquidity and TzScan. However, OCamlPro refused to fully disclose the code of their products, which is one of the conditions for receiving grants. Tezos Foundation announced the termination of funding OCamlPro in case of non-compliance in the second quarter of this year.

In March, the Tezos blockchain project completed the first round of voting for proposals for updating the protocol. The winning bid was ‘Athens A’, which received 18,181 votes.