.. DO NOT EDIT.
.. THIS FILE WAS AUTOMATICALLY GENERATED BY SPHINX-GALLERY.
.. TO MAKE CHANGES, EDIT THE SOURCE PYTHON FILE:
.. "api/gallery/fraud/scam_contracts/plot_02_ico_exit_scams_daico.py"
.. LINE NUMBERS ARE GIVEN BELOW.

.. only:: html

    .. note::
        :class: sphx-glr-download-link-note

        :ref:`Go to the end <sphx_glr_download_api_gallery_fraud_scam_contracts_plot_02_ico_exit_scams_daico.py>`
        to download the full example code or to run this example in your browser via JupyterLite.

.. rst-class:: sphx-glr-example-title

.. _sphx_glr_api_gallery_fraud_scam_contracts_plot_02_ico_exit_scams_daico.py:


ICO exit scams and the DAICO (2017-2018)
========================================

In 2017 initial coin offerings raised billions of dollars for projects that
existed only as white papers. Nothing tied the team to the money: once the
sale closed, it could withdraw everything and disappear, an *exit scam*.
In December 2017 the SEC's new Cyber Unit froze the PlexCoin sale, which had
promised a 1,354% return within a month. Buterin's DAICO proposal of
January 2018 keeps the ether in the contract and releases it at a *tap*
rate :math:`\tau`, while contributors may vote to refund what remains:

.. code-block:: solidity

   function withdraw(uint amount) onlyTeam {
       require(withdrawn + amount <= tap * (now - start));
       withdrawn += amount;
       team.transfer(amount);
   }

A team that vanishes after time :math:`t` then takes at most
:math:`\min(\tau t, \text{raised})`, and the contributors recover the rest.

.. GENERATED FROM PYTHON SOURCE LINES 26-30

.. code-block:: Python

    import matplotlib.pyplot as plt

    import blockchainkit as bk








.. GENERATED FROM PYTHON SOURCE LINES 31-33

Two sales of 10 million, one with a tap
---------------------------------------

.. GENERATED FROM PYTHON SOURCE LINES 33-82

.. code-block:: Python



    RAISE = 10_000_000


    def run_sale(tap, days=30):
        world = bk.contracts.World()
        buyers = [f"buyer{k}" for k in range(10)]
        for name in buyers:
            world.fund(name, RAISE // 10)
        sale = world.deploy("team", bk.fraud.TokenSale, tap, name="sale")
        for name in buyers:
            world.transact(name, sale, "buy", value=RAISE // 10)
        taken = []
        for _ in range(days):
            world.advance(seconds=86_400)
            available = world.view(sale, "available")
            if available:
                world.transact("team", sale, "withdraw", available)
            taken.append(world.balance("team"))
        return world, sale, buyers, taken


    world, sale, buyers, open_sale = run_sale(tap=0)
    print("no tap: team takes", open_sale[0], "on the first day")
    assert open_sale[0] == RAISE

    TAP = RAISE // (100 * 86_400)  # About 1% of the raise per day.
    world, sale, buyers, tapped = run_sale(tap=TAP)
    print("tap: team has taken", tapped[-1], "after 30 days")
    for name in buyers[:6]:
        world.transact(name, sale, "vote_refund")
    for name in buyers:
        world.transact(name, sale, "refund")
    recovered = sum(world.balance(name) for name in buyers)
    print("contributors recover", recovered)
    assert tapped[-1] + recovered == RAISE and recovered > 0.6 * RAISE

    fig, ax = plt.subplots(figsize=(7, 4))
    days = range(1, 31)
    ax.plot(days, open_sale, color="#dc2626", label="no tap: exit scam on day 1")
    ax.plot(days, tapped, color="#2563eb", label=f"DAICO tap of {TAP} per second")
    ax.set(xlabel="day", ylabel="ether taken by the team")
    ax.set_title("A tap bounds what a vanishing team can take")
    ax.legend()
    fig.tight_layout()

    plt.show()




.. image-sg:: /api/gallery/fraud/scam_contracts/images/sphx_glr_plot_02_ico_exit_scams_daico_001.png
   :alt: A tap bounds what a vanishing team can take
   :srcset: /api/gallery/fraud/scam_contracts/images/sphx_glr_plot_02_ico_exit_scams_daico_001.png
   :class: sphx-glr-single-img


.. rst-class:: sphx-glr-script-out

 .. code-block:: none

    no tap: team takes 10000000 on the first day
    tap: team has taken 2592000 after 30 days
    contributors recover 7408000




.. GENERATED FROM PYTHON SOURCE LINES 83-88

Exercise
--------
A team with a tap could instead propose raising the tap and vote for it
with tokens it bought back cheaply. What share of the tokens must it hold
to take everything, and how could a DAICO defend against this?


.. rst-class:: sphx-glr-timing

   **Total running time of the script:** (0 minutes 0.036 seconds)


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