ICO era coming
Crowdfunding is large and growing. In any case, in the real world, where several high-profile projects gave an impetus to this idea, this has long been the case. And now collective fanding is becoming the standard way of financing new crypto projects. And despite the fact that the crypto community has a lot of cool technologies at its disposal, it does not always work effectively. Perhaps it is time to use some crypto rules in crypto-crowdfunding.
Crowdfunding has become mainstream. Significant individuals in the industry say that in 2015 crowdfunding accounted for about $ 2.5 billion, while the entire sector was estimated at $ 34 billion (including 25 billion p2p loans and another 5.5 billion in fees and donations). Since there are problems in the global economy, and traditional sources of loans are scanty, growth should be expected in this sector.
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2014 was the year when the ICO idea emerged in the crypto environment - the procedure for the primary sale of coins (by analogy with the IPO - the initial public sale of shares). Before, a peculiar tradition of mining dominated: the reliability of new projects and their distribution took place on the basis of the principle of proof of performance. At that time, it was considered a fairer option than the idea of ​​“minimizing” coins and rewarding investors for the risks they take, in effect providing marketing and developing a new project.
The learning curve was cool, but the community quickly realized that crowdfunding had its drawbacks. Trust in an often anonymous developer with a handful of crypto-coins in their hands always carries some risks. Some time passed (although more than could have been expected) before certain security measures were introduced - escrow, accounts with several signatures, etc., in order to prevent access to finance before the agreement on all items. More and more developers came out of the shadows and gave their initiatives a human face.
However, working with even the most honest and competent teams, investors take risks. The crypto community learned the hard way that the whole chain is not stronger than the weakest link. Take the Bitcoin system "without trust", add some element that everyone trusted (for example, MtGox) and here is an example of a serious vulnerability.
In reality, most of the software for ICO was unreliable and frankly dangerous. And today ICO in many cases is a black box. Tokens are placed in an opaque database, which is also vulnerable to hacking or even complete deletion. In this respect alone, there is room for professional growth. Peter Godbolt, Lead Developer of Incent Loyalty Program, explains:
There is an obvious solution to the problem - use the blockchain itself as a registry. Such an approach can be popularized using applications that will not only scale well, but also prohibit organizations producing coins from affecting the balance.
Incent opens its software for other ICOs where the Waves blockchain will be used to store assets. Businesses can use this software as a turnkey solution for a nominal fee. Moreover, Incent will be distributed among investors as the main currency of remuneration, and at the same time will become an additional incentive for ICO-investors to invest their funds. Incent "sewn" in the system as a bonus for investors. There are a number of advantages for ICO issuers (security, ready-made solutions and rewards system), and for Incent holders (additional demand and popularization), and for Waves holders (transaction volumes, transparency and marketing). Incent has already signed the first contract for the use of its ICO software. However, the Incent ICO itself is not yet complete. This means that the Incent site will immediately have a real non-speculative activity.
The described approach will not solve all the problems of crowdfunding, but this is already a significant step towards the most effective use of the possibilities of the traditional approach. To go further, we need to change the paradigm and understand what a fully decentralized platform can offer in this regard.
Over time, Waves will add more functionality that will turn it into a powerful independent crowdfunding platform. Due to the fact that full nodes have not yet been released, as well as the ability to create tokens, everyone can run their own CAT (custom application token - application token or custom token). One option for their use is the fiat gateway — organizations such as banks and other financial institutions that act as intermediaries between the blockchain and the traditional financial system. They will issue fiatno secured tokens, like WavesUSD, whose value will be determined by the amount of real USD stored on the insured and audited account. This approach is already practicing Tether . In theory, anyone can issue fiatno secured assets, but only the most transparent and respected organizations will earn the trust of users.
These gateways and fiat tokens will enable ordinary retail investors to participate in crowdfunding using ordinary money. Using the Waves blockchain as an internal engine, you can conduct global crowdfunding campaigns, avoiding the disadvantages and problems of the fiat banking system (high costs, delays, bounced back or blocked transactions). Tokens issued for crowdfunding projects can be transferable. This allows you to sell them to third parties after the purchase - in contrast to the usual crowdfunding platforms, where there is no such mechanism.
However, regulation problems arise here, since depending on the nature of the project itself, the token can actually be regarded as a stock or other form of securities. This is important for the author of the project, because the Waves platform itself only works as a set of tools for any type of activity. However, the functionality that will appear in the future will provide some protection against such problems. For example, it will be possible to issue tokens that can only be exchanged with their issuer and cannot be freely traded on the open market. This will not only reduce the problems associated with the release of securities, but also find application in the music industry. So you can protect yourself from speculation on tickets / tokens for various events and inflating prices with resale in the secondary market.
In addition to the Decentralized Exchange (DEX) gateways, Waves can offer improvements in security and convenience. Asset-asset trades, underlying Waves, offer great opportunities. Until today, traditionally crypto projects have attracted funding in Bitcoins, Ethereum and other cryptocurrencies. This has advantages in the form of crypto-barrierlessness, but still it is not an ideal solution in terms of budgeting prospects. Volatility can be a true Achilles heel of a project that has just raised enough funds to launch. Bidding "asset-asset" allows businesses to put a specified number of tokens for sale in dollar terms.
With the API, which works as a set of powerful financial tools that allow you to literally create ready-made "cubes" for creating a project, the Waves Inside approach opens up new opportunities for crowdfunding organizations. Now they can reach a new audience, achieve greater efficiency and security. Such organizations as Incent can integrate their system into crowdfunding platforms familiar to users, including any desired functionality from Waves and their own developments. For example, the direct enrollment of altcoins for crowdfunding in different cryptocurrencies, where for each type of currency you can offer different prices and bonuses. Finally, greater platform flexibility is combined with even greater user security. Add smart contracts to this and you can even remove trust-related restrictions from escrow contracts.
The rapid growth of both sectors - cryptocurrency and crowdfunding - leads to their inevitable intersection. We have already witnessed an ICO for millions of dollars. With the advent of suitable software, most likely, they will become much more, not to mention the many smaller projects. And despite the fact that outwardly, crowdfunding in the future will not be very different from crowdfunding today, its structure will vary greatly from the inside.
Crowdfunding has become mainstream. Significant individuals in the industry say that in 2015 crowdfunding accounted for about $ 2.5 billion, while the entire sector was estimated at $ 34 billion (including 25 billion p2p loans and another 5.5 billion in fees and donations). Since there are problems in the global economy, and traditional sources of loans are scanty, growth should be expected in this sector.
')
2014 was the year when the ICO idea emerged in the crypto environment - the procedure for the primary sale of coins (by analogy with the IPO - the initial public sale of shares). Before, a peculiar tradition of mining dominated: the reliability of new projects and their distribution took place on the basis of the principle of proof of performance. At that time, it was considered a fairer option than the idea of ​​“minimizing” coins and rewarding investors for the risks they take, in effect providing marketing and developing a new project.
The learning curve was cool, but the community quickly realized that crowdfunding had its drawbacks. Trust in an often anonymous developer with a handful of crypto-coins in their hands always carries some risks. Some time passed (although more than could have been expected) before certain security measures were introduced - escrow, accounts with several signatures, etc., in order to prevent access to finance before the agreement on all items. More and more developers came out of the shadows and gave their initiatives a human face.
Software for specific tasks
However, working with even the most honest and competent teams, investors take risks. The crypto community learned the hard way that the whole chain is not stronger than the weakest link. Take the Bitcoin system "without trust", add some element that everyone trusted (for example, MtGox) and here is an example of a serious vulnerability.
In reality, most of the software for ICO was unreliable and frankly dangerous. And today ICO in many cases is a black box. Tokens are placed in an opaque database, which is also vulnerable to hacking or even complete deletion. In this respect alone, there is room for professional growth. Peter Godbolt, Lead Developer of Incent Loyalty Program, explains:
“In preparation for ICO Incent, we evaluated several software applications. Basically, they were based on the traditional model of web applications running on PHP from a database in MySQL. We felt uncomfortable with these platforms, given their inability to scale without significant investments in system administration and security issues. It seemed to us wrong. "
There is an obvious solution to the problem - use the blockchain itself as a registry. Such an approach can be popularized using applications that will not only scale well, but also prohibit organizations producing coins from affecting the balance.
“We intend to use Google Firebase, which will provide a high level of security and good scalability. As an open registry for all investments, we will use Bitcoin and Waves blockchains - any investor can easily and quickly check the status of their payments using any of the many existing blockchain browsers. It will be a “no trust” system, where you can clarify whether the next level of the discount rate has been reached and whether your payment has arrived on time. In the case of Waves investors, everything will be even safer. Incent tokens will be transmitted directly to the addressee who made the appropriate contribution. ”
Incent opens its software for other ICOs where the Waves blockchain will be used to store assets. Businesses can use this software as a turnkey solution for a nominal fee. Moreover, Incent will be distributed among investors as the main currency of remuneration, and at the same time will become an additional incentive for ICO-investors to invest their funds. Incent "sewn" in the system as a bonus for investors. There are a number of advantages for ICO issuers (security, ready-made solutions and rewards system), and for Incent holders (additional demand and popularization), and for Waves holders (transaction volumes, transparency and marketing). Incent has already signed the first contract for the use of its ICO software. However, the Incent ICO itself is not yet complete. This means that the Incent site will immediately have a real non-speculative activity.
The described approach will not solve all the problems of crowdfunding, but this is already a significant step towards the most effective use of the possibilities of the traditional approach. To go further, we need to change the paradigm and understand what a fully decentralized platform can offer in this regard.
Built-in crowdfunding functionality Waves
Over time, Waves will add more functionality that will turn it into a powerful independent crowdfunding platform. Due to the fact that full nodes have not yet been released, as well as the ability to create tokens, everyone can run their own CAT (custom application token - application token or custom token). One option for their use is the fiat gateway — organizations such as banks and other financial institutions that act as intermediaries between the blockchain and the traditional financial system. They will issue fiatno secured tokens, like WavesUSD, whose value will be determined by the amount of real USD stored on the insured and audited account. This approach is already practicing Tether . In theory, anyone can issue fiatno secured assets, but only the most transparent and respected organizations will earn the trust of users.
These gateways and fiat tokens will enable ordinary retail investors to participate in crowdfunding using ordinary money. Using the Waves blockchain as an internal engine, you can conduct global crowdfunding campaigns, avoiding the disadvantages and problems of the fiat banking system (high costs, delays, bounced back or blocked transactions). Tokens issued for crowdfunding projects can be transferable. This allows you to sell them to third parties after the purchase - in contrast to the usual crowdfunding platforms, where there is no such mechanism.
However, regulation problems arise here, since depending on the nature of the project itself, the token can actually be regarded as a stock or other form of securities. This is important for the author of the project, because the Waves platform itself only works as a set of tools for any type of activity. However, the functionality that will appear in the future will provide some protection against such problems. For example, it will be possible to issue tokens that can only be exchanged with their issuer and cannot be freely traded on the open market. This will not only reduce the problems associated with the release of securities, but also find application in the music industry. So you can protect yourself from speculation on tickets / tokens for various events and inflating prices with resale in the secondary market.
Looking ahead
In addition to the Decentralized Exchange (DEX) gateways, Waves can offer improvements in security and convenience. Asset-asset trades, underlying Waves, offer great opportunities. Until today, traditionally crypto projects have attracted funding in Bitcoins, Ethereum and other cryptocurrencies. This has advantages in the form of crypto-barrierlessness, but still it is not an ideal solution in terms of budgeting prospects. Volatility can be a true Achilles heel of a project that has just raised enough funds to launch. Bidding "asset-asset" allows businesses to put a specified number of tokens for sale in dollar terms.
With the API, which works as a set of powerful financial tools that allow you to literally create ready-made "cubes" for creating a project, the Waves Inside approach opens up new opportunities for crowdfunding organizations. Now they can reach a new audience, achieve greater efficiency and security. Such organizations as Incent can integrate their system into crowdfunding platforms familiar to users, including any desired functionality from Waves and their own developments. For example, the direct enrollment of altcoins for crowdfunding in different cryptocurrencies, where for each type of currency you can offer different prices and bonuses. Finally, greater platform flexibility is combined with even greater user security. Add smart contracts to this and you can even remove trust-related restrictions from escrow contracts.
The rapid growth of both sectors - cryptocurrency and crowdfunding - leads to their inevitable intersection. We have already witnessed an ICO for millions of dollars. With the advent of suitable software, most likely, they will become much more, not to mention the many smaller projects. And despite the fact that outwardly, crowdfunding in the future will not be very different from crowdfunding today, its structure will vary greatly from the inside.
Source: https://habr.com/ru/post/402255/
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