Tokens sold in a DYCO are money-backed with 80% (refund level may vary depending on project)
of the invested price for 16 months. In other words, the tokens are backed with 0.8x of the sale price.
3 refund rounds will open over the course of 16 months.
- 9 months after TGE, round 1 will refund up to 25% of sold tokens for 20% of the invested money
- 12 months after TGE, round 2 will refund up to 37.5% of token supply for 30% of the invested money
- 16 months after TGE, round 3 will refund up to 37.5% of the token supply for 30% of the invested money
Collectively, the three rounds refund 100% of sold token (25% + 37.5% + 37.5% = 100%) for 80% of the invested money (20% + 30% + 30% = 80%).
Since DYCOs issue tokens that are backed with 80% of invested capital, they create the opportunity for a mirror flip because DYCO participants can make money even when a token goes down in price. Only people who participate in the DYCO can claim token refunds.
For example, tokens bought prior to month 9 can be refunded over the 3 rounds to claim 0.8x of ICO price. If tokens fall more than 20% below the ICO price, say they start trading at 0.7x, then these tokens can be bought and then be refunded for 0.8x, generating a risk-free profit.