The power of the crowd should never be underestimated.
Crowdfunding can bring new, game-changing products to fruition that otherwise may not have seen the light of day.
But the system is imperfect – and blockchain is here to help.
Businesses use crowdfunding to raise capital to create a product or project.
Pebble Time was a smartwatch crowdfunding project from 2015 that raised more than 20 million USD with 78,000 backers.
The crowdfunding aspect of Pebble Time made it highly successful, which led the team to bring out a second generation later on, before eventually selling the technology to FitBit.
Crowdfunding allowed this technological development to happen.
No doubt crowdfunding has changed how businesses are being built, but the platforms introducing this innovation are flawed.
Studies show that the majority of crowdfunding campaigns don’t meet their deadlines – and even worse, 14% don’t end up delivering anything. This is ruining the experience for those supporting and believing in the projects.
Almost 70% of crowdfunding investors say they won’t contribute to a crowdfunding campaign again after a bad experience.
It's important to understand the root cause of these delays and miscalculations.
Traditional crowdfunding platforms make money on the transaction fees of successful crowdfunding fundraisers and not the success of the venture after crowdfunding.
Crowdfunding investors are not aware that the platforms take no responsibility for projects that over-promise. Quite the opposite, platforms profit from polished campaigns as they raise more funds.
Project creators often spend more time planning a successful crowdfunding campaign than the actual work ahead as there is no accountability afterwards.
Even the most experienced teams might miss details because there is no need to waterproof your plan.
Addressing these issues is Pledgecamp – a next generation crowdfunding platform built on blockchain technology.
A model built for delivery
Taking the focus away from marketing and putting it back on the product, Pledgecamp switches the narrative to help projects stick to their goals.
How do they achieve this?
Backer insurance is a form of smart contract escrow that locks up funds raised through crowdfunding.
Each milestone presented by the company is assigned a portion of the funds. Once a milestone is reached, the company in charge receives funds to head towards the next one.
Pledgecamp ties community involvement and rewards into this milestone process using a consensus mechanism. Backers need to be satisfied with the work completed before additional funds are released.
A vote is held to evaluate whether the backers agree that a milestone is complete. If the vote is passed, more funds are released. In the case of setbacks, voters can decide to allocate more time before reaching a judgement.
In the event that backers decide a project has not met its milestones, the remaining funds are distributed proportionally to the backers, based on their contributions.
The utility of the Pledgecamp (PLG) token is baked into the platform – improving the platform for backers, while simultaneously incentivizing holding for PLG speculators.
PLG is a payment method used to back campaigns and used by projects to pay for services within the platform.
While in the frontend crowdfunding investors will still be backing projects with their credit cards, it will be converted to PLG in the backend.
There is also a bounty program built into the Pledgecamp platform where community members can earn rewards by completing tasks set by project owners.
PLG holders are able to stake their holdings in return for a secondary coin known as Camp Shares, which unlocks a new level of utility.
With Camp Shares, if a user stakes more than 10 million PLG, $1,000 USD worth of PLG at ICO price, they are eligible to become a moderator.
If a project has an issue that backers aren’t happy with, they can flag it. If the issue is widely reported, the platform recognizes that it must be ironed out. In traditional crowdfunding, backers would have no say.
With Pledgecamp, moderators vote. The consensus mechanism randomly selects 12 moderators to vote on the future of the project in question. In return, moderators receive a reward based on the amount staked from the listing fees.
Pledgecamp also has a built-in marketplace where crowdfunding projects can pick from vetted vendors for their production, marketing or other partners, using PLG as payment.
Pledgecamp puts the power back in the hands of the people.
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