This document summarizes key aspects of initial coin offerings (ICOs) and blockchain technology. It discusses past failures and successes of digital currencies like E-gold and Bitcoin. It then explains that blockchains provide trust through cryptography, immutability, and distribution. Smart contracts enable automated transactions through secured ledgers. ICOs allow startups to raise funds by selling tokens to investors. Security and risks are important considerations for running a successful ICO. Tokenization could expand the use of blockchains to represent real-world assets.

1. Page 1
Let’s talk
Tokenization
DEVOXX MOROCCO
2017BADR
BELLAJ
When developers get interested in Money

2. What’s the
Blockchain

3. Failure
Ecash
‘1983-1998’
E-gold
‘1996- 2007’
Liberty Reserve
‘2006-2013’
Success
Bit Gold
Success
Bitcoin
‘Since 2008’
Designed in 98
Failure Failure Succes Succes
A SOLUTION FOR A BIG PROBLEM

4. Simply put, the
blockchain is a
machine for creating
trust.
“
“

5. © 2017 MCHAIN
A SECURE AND DISTRIBUTED LEDGER
Secure
Uses cryptography to create transactions
that are impervious to fraud and establishes
a shared truth
Immutable
The database is “write once” so it is an
immutable record of every transaction that
occurs.
Distributed
There are many replicas of the blockchain
database. In fact, the more replicas there
are the more authentic it becomes.
Transparent : Data is stored in clear, available to
anybody

6. Alice sends Bob $70
Ahmed sends Farid $15
Smart Contract
Secured ledger

7. SMART CONTRACT: autonomous programs

8. INTERBANK
SETTLEMENT
DEBIT CREDIT
Balance 100$
Transfer 100$
DEBIT CREDIT
Balance 200$
Balance 100$Transfer 100$
DEBIT BANK A’s ACCOUNT 100$
CREDIT BANK B’s ACCOUNT 100$
TRANSACTION
BA
HOW IT WORKS?

9. N5545 N5546
Block validated by the network
and added into the blockchain (updated)
TX+Signature
Transaction cryptographically
signed and sent to the network
Nodes
ADDRESS: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN
ANNONYME
Transaction is complete
N5547
Block processed(Mining Process)Verified and included in a
block (timewindow)
TXj+Signature
TXi+Signature
N5547
HOW IT WORKS?

10. © 2017 MCHAIN
ICO : Initial coin
offering

11. © 2017 MCHAIN
WHAT IS AN ICO
Initial Coin Offering (ICO)' An
unregulated means by which funds are
raised for a new cryptocurrency venture.
In an ICO campaign, a percentage of the
cryptocurrency is sold to early backers of
the project in exchange for legal tender
or other cryptocurrencies, but usually for
Bitcoin.

12. © 2017 MCHAIN
SESAM
In 2016, 64 ICOs gathered
over $103 mln. (CoinDesk)
$257 Million: Filecoin

13. © 2017 MCHAIN
A NEW TREND

14. © 2017 MCHAIN
How to run an ICO
HOW TO RUN
AN ICO

15. © 2017 MCHAIN
AN IDEA WITH A TOKEN
Create the need

16. © 2017 MCHAIN
HOW TO RUN AN ICO
IDEA
White
paper
Campaign
&
advisors
Pre-sale ICO
Token List
ing in the
exchange
markets
ICO tracker : Tokenmarket.net

17. © 2017 MCHAIN
PLATFORM TO RUN ICO
• ICONOMI
• NXT
• Waves
• COUNTERPARTY
• ETHEREUM
• NEO
• Bitshares
• UBIQ

18. © 2017 MCHAIN
ICO ON ETHEREUM
ERC-20 standard: developed in late 2015, de-facto standard for fungible assets.
Many enterprises decided to raise funds via Initial Coin Offering (ICO): Users deposit money to a dedicated
web-service or Ether to a book building contract;
• The total investment is converted to a fixed number of tokens;
• A smart contract is issued, where each user gets tokens according to his
investment share.

19. © 2017 MCHAIN
ICO PARAMETERS
Token details (name,decimals,..)
Total Supply
Hard Cap (ETH,BC.)
Soft Cap

20. © 2017 MCHAIN
TOKEN SALE STRUCTURE

21. © 2017 MCHAIN

22. © 2017 MCHAIN
Security
& Risks

23. © 2017 MCHAIN
Security
Security of the ICO process and contract maintenance is a vital issue.
Threats:
Token loss due to contract misbehavior;
Availability loss: external contracts (say, exchanges) can not interact with the
token contract due to its errors.
Vulnerabilities:
Insecure code;
Error-prone interface.

24. © 2017 MCHAIN
The Decentralized Autonomous Organization 2016
Biggest crowdfunding ever :
The DAO was crowdfunded via a token sale in May 2016. When Ether was trading at
$20, the total Ether from The DAO was worth over $250 million (from more than
11,000 investors). Now its 330 (4B$).
Hacker gained control of 3.6 million Ether, around a third of the 11.5 million Ether.

25. © 2017 MCHAIN
DAO HACKED!!
The code written for The DAO had multiple bugs, and the recursive call exploit was one of them.

26. © 2017 MCHAIN
ETHERPARTY BREACH: ANOTHER ETHEREUM ICO GETS
HACKED

27. © 2017 MCHAIN
Parity vulnerability 1
The wallet exposed a function:
// constructor - just pass on the owner array to the multiowned and // the limit to daylimit function
initWallet(address[] _owners, uint _required, uint _daylimit) {
initDaylimit(_daylimit);
initMultiowned(_owners, _required);
}
which was in charge of initializing the wallet owners. However, the author forgot to include a check to see if
the wallet had already been initialized, thus allowing anybody to call this function and completely overwrite
the owners[] array, giving themselves full access to the wallet.

28. © 2017 MCHAIN
Parity vulerability 2
The wallet exposed a function:
An unwitting user took control of this library contract by calling the initWallet function on the library contract,
which gave him ownership of the library contract as it had not been initialized (since it was a library contract)
and the variable only_uninitialized had not been set.
The user then suicided self-destructed it, obliterating functionality for ~500 multi-sig wallets and effectively,
irreversibly freezing ~$150M.
A hard fork would be required to restore the contract and/or return funds.

29. © 2017 MCHAIN
Next is Assets tokenization
Tokenization is the process of converting rights to an asset into a digital token on
a blockchain. There is great interest by financial intermediaries and technologists
around the world in figuring out how to move real-world assets onto blockchains
to gain the advantages of Bitcoin while keeping the characteristics of the asset.
• Transfers of Ownership vs. Transfer of Limited Rights (SMART CONTRACT)
• The Key Legal Issue: Ensuring Token Consistency
• Response to the need for trust in intermediaries, poor infrastructure
integration, and the speed of settlements – are in third place.

30. Q&A