How Participatory Funding Fosters Sustainable Growth in Bear Markets
Capital providers can help projects develop solid fundamentals to build a sustainable product and business development growth.
Since our inception in 2018, AllianceBlock has been committed to the vision of creating a platform that is capable of protecting both builders and capital providers from scams, fraudulent behavior, and hostile activity in the market. As early proponents of the values and philosophy of decentralized technologies, our Co-Founders Rachid Ajaja, Matthijs de Vries, and Amber Ghaddar jointly envisioned a fair, transparent, inclusive, and participative system of capital-raising and incubating startups.
AllianceBlock believes everyone, regardless of their wealth, should be able to participate in early capital-raising rounds, democratizing early access to these opportunities. However, they must be able to do so in a way that doesn’t promote irresponsible or unsustainable practices. Fundrs and its participatory financing model are the fruit of the work we’ve been doing to achieve our vision, alongside the end-to-end infrastructure that we’ve come to build for both builders and capital providers.
An overview of Fundrs
Fundrs is a participatory platform where Seekers raise capital and resources from Funders. Seekers are crypto and traditional startups, SMEs, or high-net-worth individuals, looking for funding for the next great idea. Funders are the AllianceBlock community, a group of industry experts, institutions and capital providers. We have discussed these at length in a previous article we published.
We designed Fundrs to be a more open and decentralized capital-raising platform, building on top of the traditional capital-raising models such as venture capital. Where venture capital is only available to a small group of participants, Fundrs expands access to more groups and individuals. More importantly, the platforms aim to source insight, expertise and participation from a wider audience of groups, individuals and contributors.
As a Funder, anyone can get involved with Seekers’ projects not just by providing capital but also by giving feedback, sharing expertise, and generally helping to shape the project’s future direction. This system is built on top of a reputation system powered by rALBT, AllianceBlock’s reputation token. You can learn more about rALBT in this article.
Built-in quality control
In addition to a decentralized capital-raising model, the more significant benefit for Funders is increasing project accountability. Fundrs is an interactive platform where both Seekers and Funders can discuss project information, objectives, and development. This continuous collaboration allows Seekers to improve and refine their projects and be more transparent to their Funders. Funders, in turn, are incentivized to help shape the growth and development of projects they’ve provided capital to, creating a solid core community around a project that benefits everyone ultimately.
Fundrs also introduces multiple methods for raising capital. At launch, we will be supporting private sales and presales, which allow Funders to be involved early in the development of Seeker projects. And in the future, we are building out the decentralized lottery system for capital-raising, including milestone-based financing.
Private sales and presales are the first opportunities for Seekers to present a comprehensive project pitch, showing that they have solid fundamentals. This is also the best time to get early feedback about developing the project further and the direction they are taking to deliver on their vision.
As a Funder in these rounds, capital providers can significantly influence how the Seekers project is shaped to help it succeed while also gaining a reputation as experts and valuable contributors that build a healthy ecosystem of projects. In our experience, getting valuable feedback from the beginning of our development helped build a strong community around AllianceBlock. It enabled us to build on our successes and cultivate a sustainable development ecosystem around our solutions.
We introduced our decentralized lottery mechanism for capital-raising when we launched on Testnet. This is an ideal method for Seekers who already had a head start but would like to introduce their projects to new capital providers and grow their communities. The system enables a fairer way for potential Funders to get into capital-raising rounds but also incentivizes Seeker projects to make a more substantial showcase of what they have done so far and what they plan to do next.
And through milestone-based financing, Seekers are empowered to deliver their milestone targets to unlock the capital they’ve raised. This allows Funders to monitor how far the project has progressed, continuously give feedback and support to improve the project and unlock additional capital to continue development. Milestone-based financing will be introduced further down the line as we deploy Fundrs.
This model of participatory capitalism isn’t just about decentralizing funding–it is designed to cultivate a sustainable capital-raising environment for both Seekers and Funders. This enables the community of potential Funders to scrutinize and collectively evaluate a Seeker project’s fundamentals properly. At the same time, this helps Seekers build towards sustainability for their businesses and build solid use cases for their projects.
Projects with solid fundamentals and strong communities delivering meaningful solutions are precisely what a bear market needs — and are best positioned to survive the current market conditions. Moreover, these projects thrive in bull markets, making them ideal early opportunities during bearish conditions.
Historically, many startups (in blockchain and elsewhere) fail not only due to the lack of funding at the beginning but more likely due to an abundance of it. With significant capital injection and deeper liquidity, projects can lose focus and efficiency, failing to set up a sustainable business model with efficient operational processes. Through the power of community involvement with Funders and taking advantage of different methods for raising capital like milestone-based financing, Fundrs enables the best possible conditions for Seeker projects to succeed, building with sustainability in mind, which benefits Funders as well.
Fundrs for Funders
Who are Funders? Funders can be anyone — not just those with the ability to provide capital but also individuals or groups with knowledge or skills that can be used to help startups grow sustainably on the Fundrs platform.
The expertise that potential Funders can provide isn’t just limited to technical or programming expertise. Know-how in design, UI/UX, marketing, commerce, growth hacking, legal, finance, economics, HR, or other disciplines is beneficial to Seeker projects and the Fundrs ecosystem. Participation in Fundrs through sharing expertise allows Funders to increase their reputation and mint rALBT (reputation ALBT). rALBT is necessary to access capital-raising rounds and, more importantly, to participate in the broader AllianceBlock ecosystem.
This revolutionary participatory funding model leverages the skills of Funders to make Fundrs far more than just a funding platform. It addresses one of the biggest bottlenecks facing tech firms today — talent. At the rate the skills gap in the tech industry is growing, there will be a need for 4.3 million more workers by 2030. Startups will become increasingly disadvantaged compared to established employers with bigger budgets, so innovative solutions are needed to make talent more accessible.
In the future, Fundrs will expand, making contributor expertise available for Seekers by incentivizing Funder participation and developing our reputation system via rALBT. Increasing one’s reputation and rALBT can unlock more opportunities for involvement in capital-raising rounds on Fundrs and the broader AllianceBlock ecosystem. We are also developing a marketplace for skills on the Fundrs platform. Experts can advertise their skills, making it easier for Seekers to identify collaborators. In turn, Funders can browse projects that may be seeking their expertise.
Projects with access to a diverse range of highly skilled experts will ultimately be better positioned for success. The Fundrs platform can provide a solid support base of DeFi experts, while the opportunities for rewards in rALBT make it attractive for more people to join, broadening the talent pool. Connecting skilled labor through the Fundrs platform could find you a new job with a high potential startup, rewarding high-quality contribution with rALBT.
What makes Fundrs the ideal platform?
So, on a practical level, what can you expect from Fundrs? We’ve designed the platform to be as user-friendly, accessible, and intuitive as possible, with a UX and UI consistent across our suite of products.
Fundrs is interoperable, supporting projects across multiple networks. We are supporting Ethereum, BNB Smart Chain, Avalanche, Polygon and Moonbeam at launch. If you’re already participating in a particular DeFi ecosystem, you will likely find projects on Fundrs that aim to integrate with your favorite dApps. But you’ll also have the opportunity to discover projects and communities on other platforms if you are interested in diversifying.
AllianceBlock takes a security-first approach to smart contract development. All our code is audited regularly and upon every upgrade and application release. In line with our long-term vision to make DeFi a more appealing environment for TradFi, we are also building towards compliance and regulation, allowing users access to a wide range of offerings, from permissionless to fully compliant, or a combination of both.
Furthermore, Fundrs is only one of the tools in the AllianceBlock suite of services. Fundrs is just the gateway for builders and capital providers into crypto. Through the AllianceBlock DeFi Terminal, potential Seekers can launch liquidity mining and staking campaigns to raise and lock liquidity on multiple networks. Funders can participate in these campaigns to earn rewards while helping ensure stability for the project token.
The AllianceBlock Bridge makes it easy for both Seekers and Funders to move their tokens across different networks. Listing on the AllianceBlock DEX enables Seekers to build liquidity on multiple chains while allowing Funders to provide liquidity whilst mitigating impermanent loss.
And through the AllianceBlock TIDV (Trustless Identity Verification), Seekers have a seamless, decentralized, and optional way to require KYC for capital providers across all integrated AllianceBlock solutions and offer different levels of compliant options and opportunities for Funders. TIDV also makes it easy for Funders to undergo KYC while keeping their privacy at the forefront, only sharing information where necessary.
So much to look forward to
For the AllianceBlock community, there are plenty of reasons to be excited. We always look to onboard trustworthy projects and teams to the Fundrs platform as Seekers. Launching alongside Fundrs, our future-proof compliance solution, TIDV, is the first step in implementing our compliance layer, showing our continued commitment to compliance.
With secure and trustworthy smart contracts powering an entire ecosystem, you’ll be able to get access to all the DeFi services you need under the AllianceBlock umbrella without navigating several apps and wallets. Additionally, each product has its underlying protocol, SDK and API that builders can leverage and build on top of, further increasing the utility of ALBT.
The networking effects of the AllianceBlock community are very promising. We expect Fundrs to be fertile ground for projects to match with talent and use that talent to validate projects through milestone-based financing. Maybe joining Fundrs could lead to your next job offer coming from an up-and-coming DeFi protocol, keen to onboard your expertise!
Our vision realized
Fundrs was at the root of AllianceBlock’s formation in 2018. At that time, we saw several projects fail with similar market conditions, leaving early contributors empty-handed. Now that we’re going through a bear market again in 2022, we are at a pivotal time to introduce Fundrs and drive the industry’s evolution to enable a sustainable environment for projects to grow. As we worked on this original vision, we encountered a range of challenges facing DeFi builders and participants and have sought to bring solutions that will smooth the road to adoption.
Four years on, the launch of Fundrs is the culmination of our Co-Founders’ initial shared vision. Launching Fundrs on Mainnet in the coming weeks will mark the beginning of a new age of decentralized, participatory project funding where anyone can get rewarded for their contribution and projects/founders have a fair chance to succeed.
If you want to be ready for the Fundrs Mainnet launch, make sure you’re earning rALBT by performing actions on the Testnet or by staking ALBT on Mainnet. t-rALBT earned on Testnet and iou-rALBT minted on Mainnet will be convertible to rALBT once the complete Fundrs platform goes live on Mainnet. You can stake ALBT to generate rALBT here, allowing you to be one of the first Funders off the starting block!
About AllianceBlock
AllianceBlock is bridging the gap between decentralized and traditional finance by remedying issues that exist in both spheres and linking them more closely together. They see the future of finance as an integrated system in which the best of both worlds can work together to increase capital flows and technological innovation.
By bridging traditional finance with compliant, data-driven access to new decentralized markets, DeFi projects, and ecosystem-scaling tools such as funding and interoperability, they are building a next-generation financial infrastructure that aims to provide regulated financial entities around the world with the tools they need to seamlessly access the DeFi space.
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