By Eimear Dodd
Arbi, the ICO escrow service, has announced plans to launch a public Initial Coin Offering (ICO) in January 2018. According to its website, “Arbi’s mission is to protect investor funds during ICO and to provide a full range of legal services to ICO teams.”
Since mid-October, the start-up has been in a private funding round with an ICO pre-sale scheduled to begin in mid- November 2017. At the time of writing, the exact start date was not visible on the company’s website. The white paper explains that these early funding rounds will be used to develop technological solutions and support the marketing required for the public token sale.
The Arbi tokens are on the Ethereum blockchain and as a utility token, customers will also get a discount on Arbi’s services.
— Arbi (@Arbi_ico) October 23, 2017
What is Arbi?
Arbi is a professional escrow service company for ICOs. The idea of an escrow service is familiar in the offline world as a third party who holds a contract, bond or sum of money until the given party has fulfilled a certain condition. For investors, an escrow service can provide additional security and reduce some of the risks.
Arbi is a Swiss-Russian collaboration set up early in 2017. The operational team is based in Russia. The company already has a number of advisors in place who are listed on its website. Arbi has a social media presence with a Facebook page and a Twitter account though activity so far has been limited. This is likely to increase during the build-up to the public ICO.
It has a strategic partnership with Malkov and Partners, a law firm based in Switzerland and authorised by the Swiss regulator to provide escrow services. The collaboration provides offline experience in escrow services that can be adapted to the requirements of an ICO. The white paper states that Arbi is also in negotiations with a number of other strategic partners.
Arbi’s white paper outlines five goals for the company:
- Ensure investment protection by attracting relevant experts
- Increase the transparency of ICO fund spending
- Establish a best practice in the use of escrow for ICOs
- Increase investor confidence in ICOs by reducing the risk for fraud potential
- Create a community of ICO escrow experts
How does Arbi plan to provide escrow services for an ICO?
ICO Investors who use Arbi’s escrow services would transfer their funds to a multisig wallet, instead of directing to the project team. Arbi would then select experts who are most relevant to the particular ICO project. The selected experts would monitor the project against the milestones outlined in its white paper. Once a milestone has been reached, Arbi would release the funds for the next stage of the project. The white paper contains more details about the design of the process.
The service aims to increase transparency, security and confidence for investors, ICO experts and projects hoping to fund themselves through an ICO.
As a fundraising tool, start-ups can use ICOs to trade future crypto-coins for cryptocurrencies with immediate value. If the start-up is successful, the coin’s value will increase. Like any investment, there are risks particularly those related to the uncertain status of the ICO. Additionally, buying a token does not give the purchaser a stake in the company in the same way that a traditional investor would receive if they invest through a traditional IPO. The introduction of an escrow service could potentially reduce these risks.
Arbi token holders would also receive a discount on the start-up’s escrow services. While the public ICO is taking place, Arbi’s roadmap outlines that the company plans to finalise the multi-sig smart-contracts required for its escrow services during the first quarter of 2018. Other milestones due in 2018 include: providing legal services for ICOs and listings on exchanges during quarter two. According to the white paper, Arbi plans to service 10 ICOs on average each month with the aim of reaching 25 ICO clients within the first quarter of 2019.
The full white paper can be reviewed at Arbi’s website: arbi.expert.