Ether Camp, organizers of the biggest hackathon in the blockchain space, with now 1,086 hackers taking part, is to launch a new token – Hacker Gold – through which start-up tokens can be acquired.
Roman Mandeleil, founder of Ether Camp, which is to hold its second hackathon in November, told CCN:
[W]hat is unique is that we didn’t push the idea of the sale. We designed the system and now we are announcing that it involves a new token. Sort of energy bits for the Virtual Accelerator.
An uncapped sale of Hacker Gold, abbreviated to HKG, will be ongoing during the hackathon, with the sale beginning shortly prior to the event and ending five weeks after the event. The raised funds will go “directly to the development of the platform, which is now in the 2nd version and is going to move toward 3rd version” -says Mandeleil.
However, there’s a twist. According to the whitepaper, participating start-ups will be able to issue their own tokens to fund their projects during the hackathon which can be purchased only with HKG tokens through a virtual exchange.
Uniquely, start-up tokens issued during the hackathon will attract voting rights. According to the white paper, investors will be able to reject spending proposals and in extreme circumstances replace the team entirely. Voting thresholds for both actions, however, are extremely high at 55% for the former and 70% for the latter.
Mandeleil states that voting rights are “not on the IP or any ownership of the project, but on the money granted for the ICO – eventually money for development of the product” having previously stated that ether camp has a “very serious Law firm watching us, they even decided to sponsor the event to get some publicity.”
That firm is Pryor Cashman which presumably will deal with a number of other legal matters as there are conditions for start-ups to participate in their own crowdsale during the hackathon according to the whitepaper. The main one being the voting rights aspects, but also a seemingly cap on crowdsales after the event to 5x of HKG raised during the hackathon. Moreover, although start-ups can have their own crowdsales after the hackathon, such subsequent fundraising will not have voting rights.
According to the whitepaper this is the only token sale for the virtual accelerator, but it is not very clear why HKG is needed, save for funding development of the 3rd virtual accelerator platform, rather than using eth directly as all eth converted to HKG tokens go to Ether Camps and not start-ups.
Mandeleil states that HKG tokens act as some sort of points for the start-ups, the more you raise the more funds they can raise in the future and the more promising the idea. However, whether any token sale from start-ups raises any funds depends on whether HKG tokens have any significant value on the market which may apply less where the token sale is uncapped – highly inadvisable considering that the primary mistake of the DAO was an uncapped crowdsale.
In any event, although no eth raised during the HKG token sale go to start-ups, the winner of the hackathon receives a prize of $50,000 in eth or btc and, if HKG tokens gain any value, perhaps other participating start-ups will also have some seed funding to follow their ideas. How this will develop, however, remains to be seen.
Featured image from Facebook/Ether.Camp.