How crypto is changing crowdfunding
A group of internet strangers came together and raised $47 million to buy a rare copy of the US Constitution last month. Kickstarter announced its own decentralized, crypto-fueled crowdfunding platform just weeks after ConstitutionDAO broke fundraising records. Now, let’s look at which blockchains will drive the future of fundraising.
The decentralized crowdfunding protocol of Kickstarter will be built on Celo- a blockchain aiming to power mobile payments and financial applications globally. The “total value locked” or the amount deposited, on the Celo blockchain has spiked by more than $500 million this year.
ConstitutionDAO raised about $47 million from about 17,500 unique addresses globally with the median contribution being only 0.051 ETH. although the group lost at a Sotheby’s auction to a billionaire hedge-fund manager Ken Griffin, the DAO’s record fundraising and the rise of NFTs are bringing an evolution to the auction landscape.
In January, a former Christie’s exec is about to auction 10,000 digital pieces of a 2005 Banksy painting as NFTs issued on the Avalanche blockchain. The Ethereum-like blockchain, Avalanche, has seen considerable growth last year, the total value locked reached more than $10 billion while the number of daily transactions on the network topped 700,000 recently.
While ConstitutionDAO used the dominant home for technology like DeFi and NFTs- the Ethereum blockchain, the Kickstarter and Banksy have glided to the competing blockchains, Celo and Avalanche. These two blockchains are smart-contract compatible and support a wide range of apps and protocols like Ethereum but with much lower network fees and faster transactions. Ethereum is moving forward with scaling solutions, the ETH2 upgrade to name one. But what does it mean for rival blockchains? How much market share can they achieve?