On January 5th, Vitalik Buterin, the creator of Ethereum, posted a note under the name “Explanation of DAICOs” on the Ethereum Research forum, describing the ways of improving the ICO model by merging in some of the benefits of DAOs in a way that will minimize complexity and risk.
As Vitalik states in the post, DAICO contract is published by a single development team that wishes to raise funds for a project. The DAICO contract starts off in “contribution mode”, specifying a mechanism by which anyone can contribute ETH to the contract, and get tokens in exchange. This could be a capped sale, an uncapped sale, a dutch auction, an interactive coin offering, a KYC’d sale with dynamic per-person caps, or whatever other mechanism the team chooses. Once the contribution period ends, the ability to contribute ETH stops, and the initial token balances are set; from there on the tokens can become tradeable.
If the voters are very unhappy with the development team’s progress, they can always vote to shut the DAICO down entirely and get their money back.
The creator of Ethereum also notes that DAICO has a mechanism through which token holders can vote on resolutions, which can be made either by raising the tap or by permanently self-destructing the contract.