FT Chain — Decentralized Project Funding – FT Chain
One issue that has become very clear over the past few years is the funding mechanisms available to blockchain projects. Since the introduction of protocols that make it easier for anyone to issue their own token, the mass of fraud and scams has wreaked havoc in the cryptocurrency community.
Through issuing their own tokens, projects have a massive amount of funding at their fingertips, and often these funds are lost, “stolen”, or wasted, and token holders have no way to manage their investment.
We see token holders as shareholders of the project, so if shareholders in regular companies can vote about company decisions, such as how funds should be allocated, why shouldn’t token holders be given the same rights?
This is why FT Chain has created the Decentralized Project Funding mechanism, which can be implemented by projects via the FT Chain.
Funds raised are automatically locked into a smart contract, and projects cannot use the funds so frivolously. Instead, token holders can manage the project assets through a voting structure.
Funding Proposal
If a project would like funding for the development of a certain part of the project, the project submits a funding proposal via a contract. Investors (token holders) vote for the proposal through the projects token, and after the proposal voting time has passed, the project can unlock the corresponding funds.
If the funding proposal is rejected, the project team does not receive the funds.
Project Settlement/Abandonment
Token holders can also submit their own proposals in the form of a contract. For example, a failing project is not progressing as expected. Token holders can submit a proposal, and if voting is passed by other token holders, the remaining funds of the project will be returned to the token holders in accordance with their token holding proportion.
Project Refinancing
Projects can also submit proposals for refinancing. If a refinancing proposal is passed, investors are able to invest according to the settings of the financing proposal. When the fundraising is completed, the contract can automatically increase the corresponding tokens to investors that participated in the refinancing activity.
These are just some of the applications available when utilizing the Decentralised Project Funding ability of the FT Chain. We see these kinds of options essential in increasing the adoption of blockchain technology, especially in the further tokenization of assets.
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Published at Wed, 18 Dec 2019 03:54:45 +0000
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