A proof-of-concept of a better crowdsale contract

If you think the value is 10M but suspect that the market will value it at 20M you should wait for more information, possibly till after he crowdsale until it goes down to what you value it at.

If you value it at 20 million and suspect the market values it at 10 million you will want to participate in the sale.

If you believe in your assessment of the value relative to the market you will be okay with some uncertainty. You could wait till the end of the sale for more information about the market valuation, but you risk not getting your transaction in in time, or having to pay a higher gas price to try and cut in line.

Therefore more confident investors will be certain to get in, and less confident investors can wait for more information.

I didn't catch that in your proposed auction mechanism the funds would be locked, and bids would be binding. As you rightly point out, that resolves the issue of people sending bad signals, either maliciously or because they change their mind. However, I think that introduces another issue.

The lockup period and binding agreement add an additional element of risk for participants. Currency volatility, unforeseen opportunity costs, or new information coming to light about the project during the lockup period. If the primary concern you have with an uncapped sale is the uncertainty faced by early investors, isn't your model trading one type of uncertainty risk for another, and in the case of the auction the risk applies to all participants, not just the ones that are confident enough to accept the uncertainty risk by investing early?

/r/ethereum Thread Parent