Proof of Use? Civil Believes This ICO Model Lets It Sell Anyone Tokens Legally

The original idea, funding a new decentralized platform by pre-selling crypto tokens to anyone who wanted to buy them, is being looked at more skeptically in many circles, especially as the U.S. Securities and Exchange Commission and other regulators debate what rules need to be put in place to protect investors.

That's why Civil's choice to open their token sale to anyone and everyone could seem like a good way to get them in trouble.

Based on its guidelines, Civil is, for example, demanding participation in the network before token holders can sell their coins.

The first way Civil is gearing its token sale towards an actual use beyond speculation is by explaining within the registration that the sale is for "Reach" users.

Participants will have to complete a quiz that demonstrates their knowledge of how crypto tokens and blockchain works as part of the onboarding process through Token Foundry.

Plus, buyers won't be able to sell their tokens from a wallet until that wallet has shown some level of use, which Civil calls "Proof-of-use." In this way, the holder then demonstrates some level of understanding of the protocol.

Small-scale purchasers will have to use 25 percent of their tokens on the platform and large purchasers will have to use 50 percent in order to unlock their tokens to sell or giveaway.

After raising $5 million in venture funding from ConsenSys Ventures last year, the token sale aims to hit a hard cap of $24 million, selling 34 million of its 100 million tokens to the public.

Because of the token's immediate utility, Civil might still prove attractive.

Soon, users should be able to tip writers or pay for other services from newsrooms in civil tokens.