The gambling application ICONbet officially became the first DAO on ICON when it launched today.
A DAO, or decentralized autonomous organization, is an organization unregulated by a specific governing body, being managed instead by a set of autonomous smart contracts.
“DAO is the future of companies,” says the ICONbet team, who have decided to remain anonymous out of concern for regulatory uncertainty. Given the industry’s constantly changing environment, the team explains it is “not worth the risk until rules become clear.”
Why organize as a DAO in the first place?
“DAO is truly open-source, where anybody can participate in ICONbet DAO and receive rewards for their contribution, similar to ICON’s delegated proof of contribution,” explains the ICONbet team. “We want on-chain rules to enforce governance and distribution of profits. As a result, players can have trust in ICONbet even if the team is anonymous, because all the codes are open sourced, and they would only need to have trust in codes, which will enforce the actual governance and distribution.”
In this way, the success of ICONbet depends on all DAO members — i.e. TAP token holders — rather than solely on the efforts of the ICONbet team.
ICONbet differs from other blockchain gambling services by giving TAP token holders the right to control ICONbet’s treasury money and thereby gain more profits than what is generated by the ICONbet platform. Some 250,000 ICX will initially be locked in the house treasury.
“If TAP token holders feel that ICONbet is not doing well, they can decide to kill ICONbet and get the house money distributed among TAP token holders,” says the team. “To our understanding, we are the only gambling DAO platform that does this. In addition, we are one of very few DApps or DAOs that have open sourced the smart contract codes.”
312.5 days until DAO
Though ICONbet will start off as a centralized entity, as explained in its white paper, it will transition into a DAO as more people participate. Over the course of 500 days, ICONbet plans to give 80% ownership to players in the form of TAP tokens.
“This means the initial ICONbet team will no longer control the game. We will not be able to kill games or stop games. Even if we decide to take down the website, other TAP token holders could put up a new website pointing to the same smart contracts. They can also make new games that target the same smart contracts.”
Once the team has less than 50% of TAP tokens, ICONbet will become a true DAO. They believe this will take 312.5 days.
The team has a lot planned. While the gambling platform is starting off with only a roulette wheel game, it hopes to introduce new games and services based on community feedback such as slot machines, poker, lotteries and maybe even a DEX to add liquidity for TAP tokens.
To help developers create their own games, ICONbet plans to release a software development kit, or SDK. Though no timeline for the SDK has been set, the team will begin considerations once more TAP tokens are distributed. “Right now, there is no need for an SDK as ICONbet’s initial team is the main owner of the DAO,” says the team. “We can make new games ourselves first. As we approach true DAO, we will begin our SDK plans.”
Legalities and building on ICON
While legal liability is certainly a tricky issue with DAOs, the ICONbet team is confident the measures they’ve put in place are enough. “We have done everything according to the book,” they insist. “We contacted many lawyers who are experts on this and have received proper legal advice. In this way, we are not concerned about the current regulatory environment.”
They’ve also geofenced areas of high risk, a matter of particular concern to the team.
ICONbet has chosen to build on ICON for three reasons. The first is the DApp Booster Program (DBP), which enables the team to comfortably give away 80% ownership knowing they can receive future earnings from ICON if the service becomes popular. Fee Sharing and Virtual Steps from ICON’s transaction fee system are also good incentives they plan to incorporate into their next games.
The third reason is youth.
“The last reason is that ICON is a young blockchain,” says the team. “We have seen that DApps like this can be very successful on other blockchains, and we feel that we can make it into a success story on ICON too.”