It used to be a bit of an Initial Coin Offerings (ICO) jungle: millions of dollars raised, many investors scammed. Fundraising is now more secure, allowing crypto projects to raise large amounts of money. In fact, Atari (ATRI) will launch the ICO of its token in November 2020. For projects that are more reluctant to ICOs, they may find their happiness at Polkadot (DOT) and its Initial Parachain Offer (IPO).
In the early days of crypto crowdfunding
Most of funding mechanisms that exist on the blockchain are based on traditional market concepts. We find in the cryptosphere classic crowdfunding mechanisms.
The Initial Coin Offerings was one of the forms of crowdfunding to emerge in the crypto markets.
A large majority of ICO unfortunately turned out to be fraudulent, resulting in the loss of millions of dollars for investors.
The Initial Exchange Offerings (IEO) then developed, allowing an exchange to raise funds on behalf of a project: Binance was one of the pioneers of this type of funding.
A place in Polkadot for crypto projects
Polkadot recently designed a 3rd funding mechanism for crypto projects: theInitial Parachain Offer.
The manager of Parity Technologies, Peter Mauric, explains that a IPO allows projects to obtain a place or a ” parachain slot »On the network Polkadot.
The concept of parachain slot is the basis of the architecture of Polkadot whose objective is to have 100 slots on the network.
According to Mauric, this financing model offers a high degree of transparency and flexibility: stakeholders are guaranteed to recover their tokens and funds are kept in a dedicated channel account.
Mauric indicates that one of the main obstacles are the availability of funds : in fact, investors’ funds will undoubtedly be distributed among several projects, which risks slowing down the launch of some.
Cryptoassets are highly volatile unregulated investment products. No EU investor protection. Your capital is at risk.
Will parachain slots attract crypto projects? Will similar new initiatives on other blockchains emerge? In any case, crypto projects cannot complain about a lack of source of funding. Can projects using Polkadot’s IPOs do without any registration with a regulatory authority like the SEC? You are never safe from unpleasant surprises with these laws, which allow financial policemen to penetrate even in the private spheres.
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