Following the recent spate of multi-million dollar cryptotoken crowdsales, ICOs have emerged as a new method of effective fundraising. As the number of projects opting for the ICO route of investment continues to rise, the Chinese blockchain industry associations have come up with a set of guidelines for such initiatives.
According to reports, six different blockchain industry associations have jointly come up with the framework for ICOs, called Guiyang Blockchain ICO Consensus. The well-timed framework is expected to give rise to responsible, well-structured crowdsale campaigns that ensure the protection of everyone’s interest by reducing investor and stability risks.
However, the Guiyang Blockchain ICO Consensus framework is an advisory as the organizations involved lack regulatory powers. At the same time, the framework may come in handy for the People’s Bank of China — the country’s central bank and a governing body to introduce regulations based on it.
China has been playing a crucial role in the cryptocurrency ecosystem. The country contributes the highest hashing power to the Bitcoin network and has plenty of blockchain projects originating from the region. As a majority of crypto-projects tend to choose ICOs as the preferred fundraising method, the number of crowdsales in the country is expected to increase in the coming days.
In a report, one of the business publication compares the influx of VC and ICO funding into companies working in the blockchain sector. The trend shows a significant increase in the financing through ICO channel over a period of one year. Presently, about 20% of the total investment into the sector is raised through crowdsales. The trend is expected to continue for some more time, which makes ICO guidelines and regulations necessary.
At present most participants in the ICOs rely upon the whitepapers and roadmaps published by the project. With no standards in place, the project information on many occasions is vague at best. Guiyang Blockchain ICO Consensus like frameworks can potentially introduce the much-needed structure into the sector.
Ref: Business Insider | Image: NewsBTC