DES – Decentralised Escrow Service (Descrow) is the first in the world and unique by its nature decentralised escrow platform for conducting ICOs.
Decentralized escrow is a new concept in the blockchain space, which describes a means of control over the invested funds. The involvement of escrow agents or companies, as a guarantee of liability, turns out to be an insufficient measure, due to the human factor that discredits the security of independent, distributed system. Meanwhile, the decentralized way of regulating ICO campaigns could turn out to be the best solution for regulating processes in a distributed market.
DES helps to define the rationality of further financing via general voting of investors at different stages of project implementation. We are confident, that it is impossible to develop a programmable code or establish an efficient business model in a short period of time, as it takes at least half a year to go through different stages of project realization. Thus, the compliance with the roadmap and stage-by-stage financing is a key element to make an efficient project. Each and every stage of project’s roadmap includes activities to be accomplished within a specific time-frame and submitted for investors’ final approval in order to get to the next level of financing.
Descrow enables to check the true intentions of project-makers and to protect investors from loss of the income in case of force majeure circumstances. Investors will benefit from Descrow as it allows to verify the startup team’s intentions and readiness to follow the roadmap. In case team fails to meet the obligations, investors can stop financing via voting.
In most of the cases it becomes clear at the first stages, whether the team is competent, how professionally it develops the project and how it is motivated to finish the project. Descrow ensures the maximum safety and proper distribution of invested funds. In case of non-compliance with the established obligations or unreasonable failure of their execution, full return of the reserved investments will be performed within the Descrow workframe.
With the help of the funds collected during the ICO and commission fees, DES is going to establish an insurance fund for the assets invested during the first tranche.The first tranche is more than others exposed to the risk of theft from the side of unscrupulous teams.Upon the occurrence of insured case, affected parties will get compensatory payments from this fund. The amount of the reimbursement will be estimated in proportion to the scam-project tokens but won’t exceed 70% of the funds lost by the investor.
Mechanisms of Descrow
- Insurance Fund
Up to 100% protection from scam projects
- Safe Holding and Trading
Investments are reserved at personal accounts of investors, extra income from trading
Step-by-step schedule of projects realization
- Escrow Smart-Contract
Automatic investments based on projects’ KPI
- Expertise and Arbitrage
Advice for investors, acceleration of projects, resolution of disputes.
- Proof-of-Vote Payment
Financing depends on investors’ voting
How does DES work?
The Descrow platform will work by the principle of stage-by-stage financing the projects. Any startup for carrying out ICO or preICO will have to represent for acquaintance to potential investors a detailed road map of the project. Together with White Paper and other accompanying documentation.
Such approach makes all promises of developers from just “declaration of intent” into a detailed plan. And for each stage the necessary sum of financing with the accurate description registers, how much, where and what for this money will be directed.
After checking of a startup by Descrow experts, the project is allowed to fund raising. Further the ordinary procedure of maintaining ICO/PreICO, but with one fundamental difference follows. Money doesn’t arrive directly to the startup authors. It is reserved on accounts of investors in their private offices, and only after the open voting it becomes possible to decide whether to allocate the following tranche or not.
In the smart contract there are means only for the first tranche of a startup and only this money in case of failure the project remains at the disposal of developers. The rest comes back to investors.
This procedure is described in our White Paper. Here, not to congest the text, we focus attention to essences — thanks to Descrow investors can not just invest in projects, but also control a startup development online.
ICO has passed, what’s next?
After ICO closing, investors face much problems. Often after funding the team of a startup loses motivation to actively work as it was at a stage before and during fund raising. As the result — development of the project is slowed down that can’t please investors.
Other axiom is that developers have threatened on too ambitious goals, and couldn’t realize the project. Or creation of a startup has simply come to a standstill.
Well and, of course, the worst of all, when investors “peck” on initially scam project where swindlers even didn’t think about any creation.
There could be different situations, but the result is always the same — ICO passes, and together with it investors lose their money. The Descrow platform is designed to fight against it.
After ICO ending, authors of a startup receive a tranche for realization of the first development stage of a product according to the Roadmap. Till expiration date of works on the first stage they have to report the investors on the achieved results. If there are no results — there will not be the second tranche.
How control is implemented?
The developers’ reports with concrete examples about the achieved goals will be sent to investors by e- mail and to their private office. After investors have received reports, five days for vote are allocated. Each investor has to define whether he agrees to continue financing the project.
If most of investors, who control more than 50% of project tokens voted pro, financing continues. The investor sends transaction to the smart contract which resend the next tranche to developers.
We’d like to notice that we will conduct ICO at the own platform, to show with the personal example its viability and prove its efficiency.