Despite the current macro sentiment, the early-stage web3 project scene is more vibrant than ever before more and more new projects are launching, innovating, and trying to raise seed and pre-seed rounds.
But - will these projects take off?
Sure, web3 grant programs are always an option for young startups as they can provide the cash injection necessary to get the ball rolling. However, the classic venture capitalist approach isn’t a guarantee of the project’s long-term sustainability.
What if the raised amount isn’t enough and the money runs out? Does the project have a unique value proposition and the ecosystem to stay afloat? Will their community support the project even in harder times, when the expectation of quick profit is gone?
Those are all questions that you should be asking. Even though current funding models work pretty well, we tend only to remember the success stories and forget about thousands of quality projects that faded into oblivion over the last few years.
What new projects and enthusiasts should look toward is sustainable growth - something often overlooked in the web3 space.
Challenges with existing models
Nowadays, most web3 projects rely on venture capital firms for funding in return for equity or tokens. It’s a win-win scenario for all parties involved - the investors receive a nice little profit, while the project gets the source of income it needs to support the development of its product.
Seems like a match made in heaven until you dive a bit deeper and realize that short-term investing doesn’t benefit the project or the community.
With existing investing models, project founders generate tokens (which generally go to initial investors) that can be sold off to earn the initial cash needed to develop the product, followed by a public launch. The goal then becomes growing the value of the token.
All of this eventually goes against the needs of the community. Typically, allocations are often skewed heavily in favor of private investors and the team. In some cases, more than 60% of tokens may be allocated toward the two, completely neglecting the community.
It’s also worth noting that the token is only open to the public long after project launch, with the community missing on private rounds characterized by lower valuation - ending up becoming just exit liquidity for private investors.
Even though VC funds can catalyze a project’s growth in its infancy, they mostly seek out those that guarantee a return on investment in the short to medium term. If a startup doesn’t fit their mold, they’ll push business models onto projects to guarantee financial returns even if this isn’t aligned with the long-term success or the interest of the community.
Put all this together and projects may not have all the puzzle pieces to ensure a healthy ecosystem. Sometimes, they may lack the community support to keep the project alive.
We’re not suggesting the traditional one-sided ICO model is a good alternative either as that approach opens up communities to lack of oversight and needlessly high risk for scams.
Rather, we’re talking about an inclusive and democratic investment opportunity that places highly curated projects in front of a wide audience, provides the community with more control, and creates an environment where projects are positioned for sustainable growth.
Is there such an approach?
Benefits of citizend’s sustainable contribution model
There are plenty of launchpads in Web3. While there isn’t anything inherently wrong with them, raising funds through this method could hinder the growth of fresh projects. Mechanics on these launchpads are to blame as they prioritize encouraging short-term price spikes to generate FOMO and attention.
What you get here is a strategy where the distribution of tokens always ends up being skewered, resulting in price increases at launch, shortly followed by a steep decline.
On our launch platform, everything is community-driven and curated, and each project’s success is based on merit.
Every member of citizend has equal voting power when deciding which projects are strong enough to secure a contribution slot on the platform. Any project that meets legal requirements can be listed. After that, the community will decide which project is worth their resources and interest.
That way, the incentives of the project will stay aligned with the community - no changes made to the business model strictly to serve the early investors.
Just like in any business, long-term commitment is one of the key success factors. Considering the community has the voting/veto power, it’s easy to see how it will bolster a high degree of commitment to the project because of a feeling that everyone is working toward a common goal.
Potential impact on the web3 ecosystem
Citizend has the potential to completely revolutionize the way projects are launched in web3. The core aspect of this launchblock is the community. Regardless of their background and their influence, every member of citizend gets an equal say in which projects are launched on the platform.
Here, everything is all for one and one for all. Details on projects are fully disclosed and community members are encouraged to share their findings with their peers.
On a macro level, citizend will lead to more diversity in the type of web3 projects getting launched and reaching success.
Interesting or unique ideas sometimes don’t have the opportunity to acquire the necessary funding as capital investment firms will overlook them due to risk. It all changes when regular users get a say in which projects should receive financial support - fostering a more diverse ecosystem where innovation can thrive.
As a result, the entire web3 community will become more resilient and vibrant, and will keep attracting new and different investors who truly believe in the spirit of innovation.
Citizend: enabling sustainable growth for early stage teams
Web3 is a work in progress and all of us are in the process of sorting out the kinks. At the moment, investors’ risk aversion on new and exciting projects that may not bring in huge profits right away is negatively impacting innovation in the industry.
Here at citizend, the core focus is on empowering teams and the community and creating an ecosystem where sustainable growth and long-term success are the name of the game.
You can speed things up by joining now - the future is just a few steps away.
Get your citizend passport: citizend.xyz/participate
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