Here's How ICOs Advanced Crowdfunding.
Prior to token sales, the presence of tech startups was heavily confined to a few developed countries. With the rise of smart contracts, the means to offer cross-border funding to projects with strong propositions became a reality. ICOs have funded incredible projects that are based across the globe; this has given anyone anywhere the opportunity to pursue a betterment of society through technological advancement irrespective of the limitations his/her birthplace may place.
However, not everything is rosy.
An Abused Opportunity
Initial coin offerings are an incredible opportunity for visionaries across the world. During the first quarter of 2018, billions of dollars were raised through ICOs and it had seemed as if venture capital could truly be decentralized.
However, as some people began to abuse the goodwill of token buyers and began to execute mass-scale scams through token sales, justifiable fear and uncertainty plagued the market. The consequence of this was that the ICO market almost dried up by the last quarter of 2018. In an effort to recover the token sale market, the leading cryptocurrency exchanges have launched initial exchange offerings (IEOs).
While ICOs did enable a market where fund raising was more accessible than ever before, they were short-lived due to the very nature of how open they were. IEOs became the natural follow-up; one that limited access to only those projects that passed preliminary vetting of the exchange. This reduced the security risks associated with token sales. While the market may have evolved, its fundamentals have not eroded: IEOs retain the ease of funding access that was offered by ICOs. Now, the bar is simply higher than before as exchanges often demand a minimum viable product and some proof of a genuine community presence. The opportunity for visionaries is still there but they simply have to put forth more initial effort than before. This naturally has a higher effectiveness at wading off the scams.
Evolving Other Forms of Crowdfunding
While token sales have been arguably the most successful form of crowdfunding to date, not all products can integrate a utility token. This limits the kind of projects or ideas that can leverage the advantages of token sales.
Projects that cannot integrate a utility token rely on traditional crowdfunding via early bird discounted product sales on platforms like Kickstarter and Indiegogo.
Fundraising on such platforms, however, hasn’t evolved much. Crowdfunding on most of the popular fundraising platforms is easily accessible; this carves the platform users into two groups: those that are understandably overly cautious and thus skip on possibly great products due to sheer worry, and those that take a chance far too often and end up getting scammed.
For these in former group, the market is unable to reach equilibrium as those who recognized utility in a product avoided simply due to legitimate concerns drawn from the lack of security of the platform; those in the latter group end up as victims. Thus, there’s a clear need to advance the crowdfunding economy. While the smart contract benefits of blockchain technology cannot be delivered products that do not aim to leverage utility tokens, other aspects of more advanced protocols can be leveraged to make crowdfunding safer even for projects that aim to raise capital through early bird sales of products.
A new crowdfunding platform called PledgeCamp is aiming to deliver protocol in which the staking aspect of novel consensus mechanisms can be tweaked and integrated into project launch executions. Each project is divided into milestones and the funds allocated by backers are distributed across milestones. If a project founder delivers a stake that matches the first milestone, project backers face no risk as the escrowed funding is only released once backers approve product progress.
In case a project turns out to be a scam, the founder’s staked funds are issued to the backers; in case it is legitimate, escrowed funds are released to the project founder as milestones are cleared.
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thanks for this
Hi @hatu
Sounds good, it would be a good way to be a little more sure if it's a scam or not...
However this company or how can you call it a trust fund? Who gives her the guarantee under what aspect she has support to be able to support the ICOs
Trust fund?
There is no trust fund involved. I advise you to have a reread.
These platforms of crowdfunding, were or are a real headache, have usually been used by scammers and unscrupulous people. Now PledgeCamp, it sounds like safe. You should share with the public, a little more of its attractions. Sounds good.
nice one @hatu
Someone always get to learn something from your post anytime when been read.
Thanks for sharing
Hello @hatu, apparently from wherever you look there is certain risk, the best thing is to train us to a great extent as life demands today to give the stature tomorrow.
Risk management is important but that should be a responsibility shared by the platform.
what a great article you follow me i will follow. backyou.https://steemit.com/@awais697
excellent blogman..Thanks for this..
excelente información desde venezuela.
Good
I myself have lost several dollars in ICOs due to scam projects. That drew the line for me to never partake in ICOs unless I have done my due diligence in learning about the product and it's viability. With this new platform, invest will much obliged to invest in products
Your experience is a testament to the importance of evolving the crowdfunding industry.
This is a good read. We hope @Pledgecamp will deliver as proposed. Let's give them a chance.
This is a wonderfull..
Interesante
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this platform is helpful
We see Pledgecamp offering a viable solution to the transparency and accountability issue on current crowdfunding platforms, as well as a major use case for blockchain technology.
This is an amazing article, I've lost many of my money to ICOs and I've made-up not to invest in them but rather invest in a free and fare projects like VEIL without ICOs. And lots of these projects without ICOs are doing very good. Note many ICOs also made some people money but all are just on one's risk.
Will love to see more of articles like this from you. Keep up the good work
Now that's what I like to call a Crypto Meme 🤣
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Interesante
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It sounds like a nice idea. is there a working demo for PledgeCamp? From what I understood it is not live yet
These projects coming up with crwoedfunding are just beginning to scare investors. I really do prefer projects that have established investors, not seeking for all these crowdfunding, ICO stuff. Veil privacy coin project had no crowdfunding or ICO, yet the project is doing very good.
Exactly.. That's one reason I hold that project Veil in high esteem. I wish other projects can be like that. But these days, the team just come up with projects when they do not have proper backings.
Thanks for sharing this interesting Post.
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Nice one Hatu. But I still prefer projects that do not go for crowdfunding. Take a look at the Veil privacy coin, no ICO, no crowdfunding of any sort. That's the type I go for.
Congratulations @hatu!
Your post was mentioned in the Steem Hit Parade in the following category:
Good info...!👍👍
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Sounds like a win-win crowdfunding platform. This should have been the model right from the start. What use for ethereum smart contracts if it wasn't used this way. People's greed, false hopes, mambo jumbo tech words fueled the scams in ICOs
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That sounds like a pretty cool idea. A lot more control for those who are investing and a bit more work for the visionary.
Still, people should know that investing in a startup company is always risky. Not many make it past the first year.
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Heard of Pledgecamp but don't really k
Now how safe it is. Thanks Hatu for sharing. Am not really a fan of crwdfunfing though. I know projects like Veil that absolute didn't go for any crowdfunding or ICO yet doing well.
Good article and nice info about PledgeCamp . ICOs damaged a lot to crypto world with scam projects and now trend moved to IEOS.Actually some projects like daps,enjin,veil started without ICO or crowdfulding and doing great so far.Research well and not invest to ICOS quickly.
Wait. .. Great insight @Hatu. If I may ask, how do we bring in some privacy measures to curb the prevailing issues with crowdfunding? You may check out how privacy is being utilized on blockchain. We have some projects already doing this. Veil coin is incredibly great at this.
@hatu, Without any doubt people will try to use an opportunity for their own benefits and this way we see many SCAMS too.
It's important to evolve time to time to stop the abuse because if the rate of abuse or Scam increases then definitely adoption rate will decrease.
Have a great time ahead and stay blessed brother.
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Just coming across this Hatu. Nice article. I do prefer projects without any sort of crowdfunding like Veil. Seems I read your article on it. Keep it up.
Really unfortunate that many abused the ICO crowdfunding model. This is not the first time I have heard about the escrow model, it was referred to as "ICO 2.0" back then. I've no idea if the project that implemented it was successful.
I have nothing against ICOs or IEOs but some self-funded or privately funded projects are also doing well in the market (check out veil if you want an example) So perhaps ICOs or IEOs are not really needed?
I don't know why i dont really like projects with ICO and that was one of the reason immediately i saw its potentials and also found out no ICO
After i have a great deal in ICO i kind of try to stay clear of them, Veil that have given me a huge profit never conducted ICO
I still hold a few coins, but also got rid of many because of this (at a loss).
Seems can't be honest in the Crypto world, really doesn't get you anywhere!
I would probably be a millionaire by now if I were dishonest like that
Anyway, the bigger problem is the mistrust it caused in the Financial World (like the SEC, which is now only starting to come back around and warm to Crypto).