Key to the concept is the fact that, given no change in BTS price, the escrow agent can acquire a Hero on the market to pay back the loan, releasing to him the price of two Heros one of which goes to the investor and one reimburses him for the cost of paying off the loan.
If BTS increases in value, this becomes profitable. If it decreases in value, then the underwriting reduces only part of the risk of waiting for the final product.
It doesn't add up. If there is no change in BTS price, and the developer incurred some costs but did not deliver the product, who takes the loss?
Surely, it must be the investor who takes a loss in this case, as he can recover only half of the initial investment (because the other half is used to pay off the Hero lender).
It looks to me that your schema boils down to this: we combine an ICO with a bet on BTS price. Thus the ICO needs to raise at least twice as much funds as the developer actually needs to deliver the product and the surplus is used to bet on BTS price.
If we win the bet, the investor gets extra profit which will offset a potential failure of the crowdfunded product. If we lose the bet, the investor takes a double hit: he loses on the bet and additionally has full exposure to the potential failure of the product.
In other words:
EDIT: I'm not saying that combining an ICO with a bet on BTS price is a bad idea. It offers risk diversification which can be valuable. But in my opinion it does not magically eliminate the risk, just splits it between two quite unrelated outcomes.
Yes. Two things have to fail for the investor to take a loss. Failure to deliver the product and failure of BTS to rise under the market conditions we are engineering. Presumably the investor is offered a good price to offset the residual risk. There is no free lunch.