Token-Based Financing -Part 8

2. Commitments granting

If controlling the supply can prevent the dilution of value, the issuance protection mechanism can handle the threat of value loss, which can be achieved by delaying the issuer’s acquisition of assets or postponing the time for asset realization. Smart contracts usually stipulate to provide a portion of the tokens for insiders, and then to lock them up until certain conditions are met before they can be used. Before the condition is triggered, the code prohibits the transmission, sale or use of tokens.

3. Modifiability

In many ICO projects, modifiability has gradually been obsoleted. Some ICO system designs have built-in modification functions. Developers can simply copy the data stored in the smart contract and create a new one, which is pre-filled with data from the former. When the issuer finally completes the product development that the ICO aims to fund, they may refuse to redeem the original tokens. This can be accomplished by two sets of rules: the primary smart contract that interacts with the user and a series of secondary smart contracts that incorporate code by reference. Similar to the typical relationship between a website’s terms of service and its privacy policy: the former usually contains a link to the latter and is designed to tie visitors to both.