Believe it or not: Web 3 will deliver on the true promise of crowdfunding

Web3 promises that crowdfunding will go far beyond what Web2 is capable of. To fulfill this promise, we must fully embrace Web3’s trust-compliant policy as well as its technology.

Web2 platforms such as Kickstarter, GoFundMe and WeFunder allow individuals, nonprofits and startups to solicit donations and even venture funds from their communities. This is a powerful invention. But as we all know, there is a problem with this Web2 platform.

Marginal group

The first problem is access, which limits the amount of funding available for projects and exacerbates inequality. Many financiers have been barred from accessing these platforms, including marginalized groups such as sex workers, residents of countries with authoritarian and / or authoritarian governments, and large parts of the world that do not have financial infrastructure.

The second problem with Web2-based crowdfunding is capacity and accountability. Web2 crowdfunding platforms are large, centralized companies. Their size gives their market power to raise external fees, and their centralized nature creates vectors for governments or executives to block access to many funds.

More subtly, yet perhaps more problematically, crowdfunding projects on these platforms are mostly centralized organizations. Funders are forced to trust them to keep their promises. Kickstarter projects are notorious for their tendency to fall short of delivery expectations, and even well-established charities are not immune.

The nature of low friction

Built on the globally available crypto rail, Web3 crowdfunding platforms overcome access constraints and other frictions inherent in the Web2 platform. Their global and low-friction nature is one of the main drivers of the recent Web3 crowdfunding boom, most famous with the Constitution DAO.

How do they work? General Web3 Crowdfunding – exemplified by the Jusbox and Mirror platforms – receives ETH from funders and returns a token as a receipt. Tokens, stimulated by the beauty of Web3 composibility, can be used for a variety of purposes. Some crowdfunding projects use their tokens only to identify contributors, while others use them as governance tokens. The common denominator for all of these uses is that tokens are fun! People like to get the token and own it, even if the token doesn’t actually give them any rights.

In other words, Web3 platforms solve direct access issues and issues with platform strength and accountability.

Juicebox and Mirror both follow the ‘ETH In, Project Token Out’ model, but each focuses on different aspects of the process. Juicebox offers multiple options to projects to customize how funds are received (at ETH) and how project tokens are distributed. The platform also has the option of rewarding primary funders with a portion of the grant funds once the main goal has been met. All of these configurations are encoded in the Jusbox Smart Agreement, so financiers can be sure that the rules will be followed.

In contrast, Mirror Crowdfunding has limited customization. Instead, it offers projects a platform from which information about the project can be disclosed. Embedding crowdfunding tools directly in a published article is a powerful way to attract potential fundraisers to your crowdfunding and this is a big reason why so many projects have used mirrors in this way.

Crowdfunding platforms like Jusbox and Mirror enable Web3 technologies to raise funds from anyone in the world without fear of the platform changing the rules on them, with minimal friction and relatively low fees. In other words, they solve the problem of direct access and the strength and accountability of the platform.

However, currently structurally, they are not yet addressed Project Problems of power and accountability. Most of the crowdfunding projects receive a handful of ETHs in multisig controlled by a few project founders.

Fundraisers – who now have project tokens – may in some cases indicate their choice of how to raise funds – such as through a snapshot vote – but they must still Faith The founders of the project have to follow that signal. Before anyone decides to finance one of these projects, they must decide if they can trust the founders.

T.Rustless Web 3 Crowdfunding

Faith is not always a bad thing. Many projects are started by highly trusted founders, and those projects are usually able to progress more efficiently because the wheels are greased by the belief that others are able to place in them.

It is easy to assume that the trustworthy founder is a prerequisite for any new project. After all, with a few notorious exceptions, there aren’t many examples of unscrupulous founders starting a new project!

However, we don’t see the cost of trust just by looking at projects Is Instead of starting, look at the cost Absence All will be worth it প্রকল্প projects that never got a chance in the first place because the right people haven’t been able to trust the founders enough to help finance their efforts.

These are missing projects that people from the underprivileged, marginalized communities or those who are afraid to reveal their identities in an authoritarian regime, descendants of expensive universities or people without family connections, young people, or career changers who have yet to make it. A reputation in their new case.

Many of these people have world-improvement ideas and have the ability to bring them to life – in fact, it is argued that they are the only ones who will come up with a unique approach to solving the most important problems – but they are seldom given a chance because of their situation. Makes it hard for anyone to believe them.

Funneling ETH

Web3 gives us tools to unlock the potential of those people so that people can trust them – if we are willing to use them.

How could that work? Crowdfunding platforms like Jusbox and Mirror are in an excellent position to help reduce the need for trust to projects. Instead of turning ETH into a multisig, controlled by the founders and out of reach of the funders, these platforms can give the funders a tool that allows them to withdraw (exit) from a project at any time until their funds are set up. This will significantly reduce the risk that even non-founders may run away with the funds, reducing the need for funders to trust them.

At DAOhaus, we took this approach when designing our Yeeter crowdfunding platform. In the Yitter project, the funds raised go to a DAO treasury, and funders receive non-voting shares in the DAO, which allows them to withdraw funds at any time if they are not happy with the direction their project is taking.

While funders can hold project team accountable without trusting them, the reputation of the founders does not matter; Only their powers and actions. That Web3’s true promise.

Towards an unbelievable future

DAOs and Web3 can change the world for the better. But we will give them the best opportunity to do what sets them apart from traditional organizations and Web2: distrust. By creating processes for crowdfunding and coordination that meet the requirements of trust, we can empower entirely new people to create and create projects that improve our entire lives.

You can contribute to that change. Support projects founded by those who cannot rely on their reputation. And choose crowdfunding tools that actively reduce trust requirements.

Spencer Graham This is a key contributor DAOhausAn Ethereum-based community.

https://ift.tt/NK2wBR5

Baca juga

• Upcoming Drops: October 24-30
• Abbott and Costello have immortalized their legacy as NFTs
• Telegram gears up to launch its on-board Web3 marketplace