Bancor recently conducted its ICO on the Ethereum network raising 390K Ether which roughly calculates to $150 Million. Despite such a success, it unveiled a whole new level of issues with the ethereum network which might turn into a mess in the future.
Problems with the Ethereum Network
During the crowdsale, a huge number of people swarmed the ether network sending their Ether to the smart contract that held Bancor. The Ethereum network is not scalable enough to handle this much traffic in such a time space which resulted in transactions being dropped. People had to wait for around 30 minutes to see if their transaction made it through. Some people reported that their transaction disappeared from the network after 30 minutes and they had to send it again.Some people who didnt want to wait sent the money twice or thrice just to make sure it went through which resulted in them overbuying than what they intended.
Another issue was that Bancor in their terms declared that the crowdsale will only run for 1 hour but due to the issues in the Ether network they had to extend it to 3 hours. This was a violation of their own terms which could result in investors losing their money. The investors that had invested after calculating the amount of money that the ICO will raise were left in despair as the time span was increased to thrice the original time span. In Bancor’s defense, If they hadnt increased the time span they would have raised much less and to only a few people. Also, they didnt know that the Ether network wont be able to handle the ICO. Legally, there is no law governing their move to increase the time span which shows the risks associated with these ICO’s.
Vitalik himself said that the network is still not scaled enough and is constantly working to improve the technology. Despite such issues, Bancor raised so much money that they wouldn’t have ever raised if they went to a VC. Many more ICO’s are coming and we will get to see what is going to happen to the Ether network.