The Abyss is the digital distribution game platform that was the world's first project to execute DAICO--the fundraising model combining benefits of DAOs (Decentralized Autonomous Organizations) and traditional ICOs.
Completing its token sale on May 16, 2018, the project has raised more than $15M in total (at the rate of the day). The following article covers the story, revealing the lessons we learned after the sale process, provides tips for understanding the DAICO concept, and it explains the benefits and importance.
Tip #1: Be transparent
Back in October 2017, while getting The Abyss ready for the crowdfunding campaign, we aimed at conducting a 100 percent transparent token sale. We tried to find the right solution that would secure this transparency, but each option we looked at didn't satisfy our criteria.
In January 2018, Vitalik Buterin (co-founder of the Ethereum blockchain) presented DAICO, an innovative fundraising model that matched our vision perfectly. DAICO uses elements of DAO and traditional ICOs and can be viewed as implementation of a smart contract genuine idea. With DAICO, absolutely all features are in the smart contract and cannot be changed. That secures the token from any fraudulent activities of the team and community, cheating eliminated.
We refused to conduct pre-sales and private sales for the sake of maximum transparency. Considering the unfortunate experience of other blockchain projects, we protected all our wallets with multi-signatures and made them available for public review. Contributors of quite a lot of ICOs do not even know where the raised funds are stored. With DAICO, the token sale is 100 percent transparent, and all terms and conditions can be checked at any time.
The real party starts after the token sale ends. Well, using the word "party" is a bitter sarcasm since the team simply can't withdraw the money and go to Las Vegas. Funding is not released in a lump sum. There is a minimum monthly budget allowance assigned from the very beginning, called the tap. Every following month, token holders are invited to vote on increasing the tap. So, we keep the community constantly updated with our development progress in order to enhance holders' trust. This combination of smart contract immutability and strong relationships within the community makes DAICO the most favorable model for a long-term and transparent run.
Tip #2. Use democracy as a business model
Driven by the principles of democracy, The Abyss project adopted the voting system to convey decision power to its contributors. The poll for tap increase is more of an operational feedback, but there is a basic security mechanism--the refund poll.
Buterin's idea was too new to make a project around it, and we've made an attempt to improve it by introducing the Oracle system. According to our concept, the Oracles, the noted industry experts, had the power to start the poll for refund in case the project turned into a scam. We sent letters to all widely respected experts and invited them to become Oracles, but received no reply.
Some of our community members supposed that the Oracles may have a financial interest which could be harmful to decision making. Realizing that we can count on ourselves only, we removed the Oracles, leaving our backers face-to-face with the smart contract.
However, we improved the voting system, making it the DAICO key feature, and provided token holders an opportunity to vote for a refund in the event the team failed to implement the project. As we moved on, we discovered four more factors that were crucial for adopting the DAICO model.
Tip #3. Choose community first
Community is a helpful tool in navigating the project. It generates either positive or negative feedback, both of which are of high importance. Positive reviews are always encouraging and serve as indicators that you're moving in the right direction. Negative feedback sometimes helps you to make necessary corrections and to avoid crucial mistakes.
We've cared about The Abyss community all the way, listening to and interacting with our community members. We had our official website translated into 16 languages (without using machine translation--it was totally organic) and hired six professional community managers. This allowed for easy and fast communication with The Abyss contributors and supporters in our target markets.
Tip #4. Think quick, act fast
Timing is crucial. Don't hesitate to announce/implement the idea that you deem is brilliant; otherwise, someone may get ahead of you.
We've announced conducting DAICO 10 days after Buterin's original blog entry, and 10 hours before another project that also claimed to be the world's first DAICO. The Abyss was not only the first to announce, but it was also the first and only to execute the DAICO. At the moment, there are some projects exploring the idea of DAICO, but none in the sale stage.
Tip #5. Respect and obey the law
Compliance with local and international laws is vital. Consequences of breaking the rules may kill everything.
We've consulted with lawyers and made a list of countries with laws that prohibit their citizens/residents to participate in crowdfunding in order to avoid problems both for us and others. Some include Bangladesh, Kyrgyzstan, and eight more, with China as a leader of non-crypto movement. Yet another challenge was the KYC/AML (Know Your Customer/Anti Money Laundry). The smart contract was set to accept funds only from verified participants. Those who had not passed KYC/AML yet were added to the gray list. They could contribute to the DAICO, but the assets were frozen until KYC/AML was complete. We had more than 3,500 rejected applications.
Normally, the KYC/AML providers pay for each verification, while the user can send 10 applications or more before receiving approval. Reasons vary--photos can be too dark or there are glares or flashes on documents, incorrect dates, etc. All of this can result in paying 10 times for one user. The only solution in this situation was to implement our own pre-moderation system that helped to reduce the number of rejections and avoid unnecessary costs. But there were still many other issues, since we had to process all applications manually.
The question of U.S. citizens' participation is acute for all token sale lovers. We decided to follow the path of progress and to conduct DAICO in the U.S. under Regulation D under the Securities Act of 1933. We could have sacrificed the U.S. market, since 90 percent of our audience is from Asia, but we wanted to show by our own example how to adapt to the laws of various countries.
Tip #6. Find the right jurisdiction that supports your business
The right jurisdiction allows for an easy and fast registration, while securing comfortable working conditions.
In the course of six months, we have changed two jurisdictions. The first was Belize, then Switzerland, the motherland of Ethereum. We thought it would be the ideal jurisdiction for us and filed an application to FINMA, the local regulator. After two months of anticipation, we received nothing. In late March, Malta claimed itself the blockchain island and offered friendly financial regulation for the local companies. We registered The Abyss LTD in Malta, and all documents, including legal opinion, and have been received really fast.
Tip #7. Fine-tune to perfection
On the way to DAICO, we introduced many other features, proving we're not a scam project, including mobile app, platform's prototype, etc. We were the first on the market to implement whitelisting through the Telegram bot. The bot boosted activity in all our Telegram channels and helped to reach more than forty-five thousand followers on our main group.
Other notable figures of The Abyss's preparation for a token sale included:
- 3 months to develop the smart contract
- Redeveloping the smart contract three times
- 5 audits of smart contract conducted by various auditors
- More than 125,000 registrants on the official website
- Token Sale rescheduled five times
About The Abyss
The Abyss is a digital distribution game platform and a sole one-space place for the best MMOs, offering a comprehensive infrastructure for all MMO/MMORPG lovers. The Abyss provides beneficial terms and conditions for gamers and developers by delivering multiple earning opportunities available through blockchain-powered services.
The Abyss is being developed by a large team of professionals with a strong gaming background and vast expertise in game-projects launching and management. The Abyss team comprises more than 90 employees at the moment and is constantly expanding.
The company is looking forward to establishing partnerships with game developers and global service providers. The list of current partners includes Xsolla (payment and technical solutions), Kingsoft Cloud (cloud solutions), Changelly (an instant cryptocurrency exchange service), and many more.