Here's an idea to fix Crowdfunding.

4개월 전

Initial coin offerings are one of the most utilized benefits of blockchain technology. They’ve enabled visionaries to grasp opportunities despite the burdens that may be forced upon them by the lottery of birth. ICOs have allowed investors to access valuable cross-border investments that would otherwise be limited to only major venture capital firms. Despite their benefits, ICOs, which are a form of crowdfunding, are now undergoing an evolution as initial exchange offerings (IEOs) are gaining steam.

IEOs diminish the key issues that were faced by ICOs. The main problem with ICOs is that the public has to personally vet the teams hosting a crowdfunding campaign; meanwhile, in an IEO, exchanges leverage their deep resources to vet teams themselves. Such a mechanism greatly limits the potential for scam token sales which were so common in 2018.

A few examples of exchanges that are offering IEOs.

IEOs are redefining crowdfunding for blockchain and blockchain-enabled developments, but not all crowdfunding campaigns can benefit from IEOs. Many products exist in the physical world or simply operate as a software that cannot integrate a token.

Non-tokenized crowdfunding campaigns have regularly turned out to be a scam, faced a delayed launch, or complete product failure. In the end, the crowd funders are left with nothing and thus few first-time funders become repeat crowd funders. While IEOs cannot help the non-tokenized crowdfunding campaigns, a new blockchain project can.

Starting from Scratch: Crowdfunding

One of the key benefits of blockchain technology is transparency and this is what gave people the initial burst of trust in public token sales. While public sales weren’t perfect—and thus led to the rise of IEOs—they were at least not as opaque as centralized crowdfunding platforms.

Leading crowdfunding platforms like Kickstarter are open grounds for anyone to pitch a product even if they are unwilling to deliver on the promise. Such channels have become an easy means to acquire capital through the use of sly marketing tactics and portraying a seemingly good list of qualifications.

Platforms hosting such campaigns have little interest in whether or not the project is delivered as they claim their fees when the funds are issued to the project. Commission is guaranteed irrespective of product success and so many platforms unwittingly promote projects that can be well-marketed, even if the people behind the project are mere hustlers.

This is one of the few cases where an industry can legitimately be described as completely broken.

The crowdfunding campaign is in such a poor state that it doesn’t need enhancements, but a complete recreation. PledgeCamp, a new blockchain-enabled platform, hopes to create the first platform that is centric to the needs and safety of crowd funders.

Milestone-Based Fund Release

PledgeCamp is creating a platform where payments are released to founders over a period of time rather than an instant release. As a project reaches its milestones, additional funds are made available. Thus, projects on PledgeCamp will have to provide evidence of their progress to unlock raised funds.

The milestones and the approval of milestone completion is decided by the crowdfunders of a product. Through such a mechanism, a project’s backers will be able to decide how much capital to release during varying levels of progress in a project.

Insuring against Scams

PledgeCamp takes a unique means to security against scams. Whenever a person wants to launch a project, he/she must deposit a minimum stake that will be refunded if the project founder provides documents that add transparency to the development.

Moreover, with the milestone-based capital release, funds won’t be released in advance to begin with. Thus, if a scammer tries to launch a project, he/she will lose the stake that was deposited at the launch of the project. Once a project fails to prove its legitimacy, its staked funds are distributed among the crowdfunders.

Systematic Review and Mentorship

PledgeCamp is going to review and vet projects prior to allowing the public to view them. This is something that aligns with the evolution of ICOs to IEOs since an experienced team will make sure vetted projects make their way to the public eye. Beyond this, PledgeCamp also integrates some key aspects of an incubator.

Projects launched on PledgeCamp will receive advice from the PledgeCamp team, which includes successful entrepreneurs who have raised millions of dollars and delivered multiple products for mass usage. This experience will be invaluable to new projects but is typically only provided by incubators. However, new projects often need the mentorship of an incubator and so PledgeCamp will ensure this void is filled with its own team’s expertise and knowledge.

Crowdfunding is quickly becoming an integral part of the internet age. It allows people to circumvent the norms of fundraising and quickly bootstrap their way to delivering incredible products. Of course, such an opportunity has attracted nefarious interests but that isn’t enough to negate all the positive aspects of crowd funding.

Crowdfunding is genuinely broken, and the industry is in a dire need of evolution because of the incredible opportunity it can offer to the world by enabling the realization of tomorrow’s innovation.

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I have always just found the whole crowed funding thing to be super risky, and thought it would just fade out, but it is almost getting stronger.

Whenever a person wants to launch a project, he/she must deposit a minimum stake that will be refunded if the project founder provides documents that add transparency to the development.

I like the idea of having some form of collateral. There should be consequences for failing to deliver, unlike now. However, as long as the funding is greater than the collateral there is still an incentive to try to scam people. Regardless, it is still a great idea!


Note the part of the milestone-based distribution.
If the person doesn't deliver, he/she won't get funds past the first milestone.


Great point! You'd lose the collateral AND the remainder of the funds would be kicked back to the funders. If you make the collateral larger than the first distribution then it would make 100% scams impossible!


Since the project backers decide on the milestones, they have the power to make the stake equal to the first milestone. :)


this also is a good point, banks have operated this way for a long time. you must prove that the project is on course before the next stage of funding is released. good way to proivde confidence and protection to investors

Any efforts that work securing against scam is highly appreciated in today's crypto based economy. What a pity heard today from Binance.....


Yep, there's a lot to do to make web interactions safer.

Still longway to go as project still has to have a platform to interact. 2-3 years normally the time this type of projects take and then rest will depend on developing the userbase


You're up to date with things! :)
Though, I don't think it'd take 2 - 3 years.

Thankyou for the info. Im looking forward to next level africa to begin, the first of its kind crowdfunding product to exist with a asset based NLA cryptocoin.

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I do think crowdfunding can play a major role in that.

I deeply understand that market need protection and that investors needing it too, but... what about Creator/Project Founder? If Creators have starting capital, maybe they can fund investor by himself, not needing a expensive Crowdfunding campaign.
Mentors and Incubators already ask to the Creator a lot of money to "certificate" business model and business plan, marketing strategy and team skill.
In other hands, Investors have a good opportunity to get great revenues from a success project and... in my mind, where a great revenue is possible then a big risk is included. Don't you?


Realistically, the founder only needs to match the first milestone for the project to be completely safe. There could easily be 20-some milestones in a good project and that means with 5% of the needed capital, a founder can reach funds for the entire project.

It's an intriguing outline and well thought out. Cryptocurrency is still a bit of a niche concept. Crowd funding reaches out easily to just about everyone. The idea may be to find ways to introduce more people "Normies" to cryptocurrency.

@hatu, You've travelled in depth way in this post and yes, Blockchain brought the true Transperancy and definitely more adoption of Public Blockchain system will raise the trust because of the Point Of Transperancy.

Keep up the great work and keep spreading more knowledge.

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I liked thanks for the information @hatu

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This post has been resteemed!
Good luck!


Thanks! :)

Great post this is


Haha sounds like Yoda.

Greetings @hatu

Important information that you provide in this publication.

The more security measures are applied in transactions, the more confidence there will be in the system and therefore greater use of it.

Right, and for funds to flow to innovative ideas to even the farthest regions in the world, it's imperative that this ecosystem grows.

Go Crowd Funding. Whoo Hoo!


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Nice post

@hatu nice post of my life

I own @crowdfunder and and I am open to letting someone jump in and take the lead since it will never be my main project.

  • The only requirement is that it must be Steem-based.

My main project is @humanism


That's nice of you.
From what I understand, you want to give away the domain?


No.. I am interested in someone else taking the lead of @crowdfunder in exchange for giving me a minority OR moderate stake (depending on how reputable the partner is).

If it's a very reputable partner I am willing to only receive a 10% stake... but it would have to be a reputable partner.

Having said that.. I do give things away.. just not @crowdfunder.


What's the current progress?


I only registered the domain name & username @hatu.

The rest will be done by my future partners. I registered years ago as an investment.

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Hilarious yet apt.

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I mean the featured image.

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The clarification helped.

Good points. Coincircle is doing the same. You may want to have a look at.


Will do; thank you!

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Thank you Hatu for this insightful content! Why not get it translated into Chinese to reach more audience? As a professional fintech translator, I can do it very well for you!


Hey, that sounds interesting.
I'll think about it.

You can PM me on Telegram @HatuSSS.

I Will Draw Your Photo As A Super Hero Caricature

Gotong royong

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Well it's about time someone came up with a way to stop the scammers.
There are many worthy projects out there that fail due to funding.
A scheme that we could all be confident in would see these people get the funding they need and protect the funders.
Confidence is the word here and it looks like it can be delivered at last.

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Well said!
Anything to boost safety overall while boosting confidence for the legitimate projects is welcome.

You made me remember what I had been thinking for some time, but seeing the difficulties of Venezuela I did not do ... but now that I see and live the stability in spite of the conflicts, I see that others activated their investments and succeeded. I speak from a crowfunding to open an Anti-Cafe style conference bar, to teach cryptocurrency courses and social networks .. I will do it in my own house .. I have several things to start. I hope you can count on your help for this plan


PledgeCamp could be an outlet for this?

Thanks for this content

@hatu i think this ios a really good idea, especially the part about scam protection, another way you could do it is depending on your controbution you get a share in the company/idea/project for exaqmple if there is 1000$ raised and I pledge 100$ i would recieve 10% of profits/dividends. i know some ICO's already operate this however it is one of the crowd funding ideas that i prefer. nice post, keep it up!

Due to irregularity in the coin market, i had always being scared of crowdfunding because of people who want to make away other people's money.however, i believe more ways to help people will be discovered soon

great post.

So many crowdfunding jobs in the past has had the stench of scams attached to it. The idea and execution has come it's journey, now it's working worldwide. Thank you for the great write up.