A crypto startup with the goal of eliminating investor risk from ICOs saw the launch of its public testnet on Friday, October 4th.

Named Profit Line Inc. — or PLinc for short — the fundraising app is part of a larger dapp ‘ecosystem’ that rewards its users dividends as volume passes through its games; which include risk-free gambling apps such as dice rolling and slot machines, and a hot potato-esque game.

According to its developers, PLinc ICOs are designed to plug into this app system to ensure investors are ultimately refunded all contributed funds, using the same dividend-rewarding mechanic that lends the ‘risk-free’ label to its gambling apps.

At present, the application functions much more like a crowdfunding service such as Kickstarter than what one might expect from a typical ICO. Users can launch a funding campaign and raise ETH for whatever they have in mind. The PLinc development team have expressed interest in creating guides for project owners to add their own token incentives in future, allowing some campaigns to work much more like the ICOs we’re used to.

Protecting Investors

Indeed, this project by the Profit Line Inc. team comes as a welcome change to the cryptocurrency space. A study from ICO advisory firm Statis Group revealed that more than 80 percent of all ICOs conducted in the peak ICO mania of 2017 were scams. 4 percent failed, and 3 percent have since ‘gone dead’.

In fact, from a total of $11.9 billion invested in ICOs in 2017, $1.34 billion (11 percent) went to scam projects, with the majority going to the now infamous Pincoin ($660 million), Arisebank ($600 million), and Savedroid ($50 million).

As it stands, if an ICO results in an exit scam by the owners, investors are left with nothing but a valueless token. And while the project in development at PLinc won’t prevent owners from ditching their investors, it will — at the very least — see every investor refunded their ETH.

Will It Work?

Screenshot of the current PLinc testnet release. Source: https://ipo.plinc.io/#/

At present, there’s no telling whether the project will revolutionize ICOs in the way that many in the space would like. Potential drawbacks to the proposed system include the fact that project owners must either raise ten times the amount of ETH they need, or resign themselves to keeping only 10% of their target.

Furthermore, if PLinc developers fail to publish the tools necessary for ICO owners to set up additional token incentives within the system, it’s unlikely the project will see any real usage in the space beyond a niche crowdfunding service.

There is no release date for the service at the time of writing, but it will certainly be interesting to see how this project develops. Investor risk remains one of the biggest problems with the current ICO model, and seeing it eliminated — or even partially reduced — is something that can’t come soon enough.