What’s wrong with crypto investing?
If you ask traditional investors, you’ll probably get responses like:
- Most projects have zero transparency.
- There are too many impractical solutions being developed.
- Few project leaders have the business experience needed to successfully launch their platform.
While three distinctly different issues, they can all be traced back to one major problem: Most projects don’t consider the needs of the traditional investor, which can be a crucial mistake when going after, excuse the pun, the big fish. This is because too many blockchain startups focus on attracting whales rather than the functional, conservative crypto investor.
This causes a number of long-term problems which can negatively affect the integrity of a project. For starters, whales aren’t necessarily interested in the long-term success of the project. They’re looking to invest in a startup when the price is low, then sell as soon as they’re able to maximize their profits.
Whales Aren’t Concerned with the Project
Naturally, there will be whales looking for investment opportunities everywhere, not just in the crypto space. However, the problem with blockchain projects is that they become so whale-oriented that companies start to lose the scope of their initial goals and objectives and wind up catering to whales rather than the blockchain community and their long-term investors.
What’s more, many whales end up manipulating the value of tokens to further increase their earning. If you’ve ever watched the price of a token soar after it was being overhyped on social media, or watched a token crash after negative, speculative news about a project went viral, then you’ve witnessed whales manipulating the market firsthand.
The Industry Needs a Workable Alternative
As it stands right now, the blockchain industry is overrun with whales looking to become the next and scammers looking to make a quick buck. Before we can truly legitimize blockchain technology and onboard serious, longterm, value-based investors, there needs to be a change in how startups raise funds.
Going forward, blockchain projects should:
- Have safeguards to protect supporters against scammers.
- Be aligned with the interests of the serious investor.
- Be able to sustain themselves without the assistance of pump-and-dump whales.
- Be free of speculation and unnecessary hype.
Guess what? We’re closer to this reality than you think.
The Solution Is The Distributed ICO
Distributed ICOs are a new, more efficient way for blockchain projects to raise money. They do this by bringing the security of smart contracts and traditional project management to the blockchain arena.
Instead of generating hype and appealing to the deep pockets of whale investors, distributed ICOs target the serious blockchain enthusiast by ensuring supported blockchain projects are practical and capable of addressing real-world issues.
Here’s how the Distributed ICO works:
- Funding is based on the actual needs of the project. Startups are only able to raise the money they need to ensure their platform succeeds, effectively reducing the need for whales.
- Funds are distributed over an extended period of time rather than at once. Like years and quarters, the project is divided into periods and rounds. At the end of each round, a specific number of tokens are allocated to the investors.
- At the end of each round, investors are able to vote on the future of the project. This ensures that the platform is always aligned with its investors. If the investors vote not to continue the project, their funds are automatically returned and the ICO is terminated.
Moreover, the distributed ICO model rewards early investors by offering tokens at a discounted rate in the early periods of the ICO.
Sound interesting? to learn more about Distributed ICOs and how you can use them to take your blockchain project to the next level.
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Read more at https://globalcoinreport.com/why-the-whales-couldnt-care-less/
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Published at Tue, 22 Jan 2019 12:18:56 +0000
