10 Reasons why you should raise Funds with Decentralized Crowdfunding Platforms
Crowdfunding has significantly benefited from blockchain integration. As many people have pointed out, not only does the blockchain accentuate the positive qualities of the blockchain, but it mitigates the undesirable issues as well. Having said that, creators and backers may still prefer the more traditional crowdfunding approach because accepting change is hard. In this article, we will list out ten advantages of decentralized crowdfunding to show why everyone should start embracing this space.
#1 Zero geographical restrictions
Presently, crowdfunding platforms like Kickstarter and Indiegogo have heavy geographical restrictions and tend to favor western countries. The reasoning behind this is because there is a common assumption that people in western countries have easier access to debit and credit cards. However, as per a study by the World Bank, China will contribute $50 billion to the global crowdfunding industry by 2025. That’s 52% of the total global market! Using a decentralized crowdfunding platform, you tap into these unexplored markets pretty easily without restricting yourselves with needless bureaucracy. If you are a creator and you have a good idea, then you can host your project on the platform.
#2 Lack of Censorship
Centralized platforms like Kickstarter and Indiegogo have full control over the projects that get listed on their platform to cut down on spam. Unfortunately, this also means that a lot of entrepreneurs with really great ideas don’t get their projects listed for violating some vaguely written terms of service. In other words, if your ideals and beliefs differ from theirs, you may get delisted from their platform. Once again, in a decentralized platform, there is no central authority figure laying down the law. As such, there is no chance of censorship via a centralized entity.
#3 Reduced Listing Fees
Both IndieGogo and Kickstarter charge 5% of the funds collected as listing fees. Decentralized platforms like Pledgecamp allow creators to reduce or completely eradicate their listing fees provide they allow high enough backer insurance (more on this later).
#4 Reduced Transaction Fees
Payments in Kickstarter and Indiegogo are made via Stripe. Kickstarter does Stripe credit card processing charges of 3% + $0.20 per transaction, while Indiegogo does 3% + $0.30 per transaction. In a decentralized platform, backers can directly connect with creators and send them tokens directly to their cryptocurrency wallets. This payment is made directly without having to go through payment intermediaries like Stripe.
#5 Increased Transparency
According to a study conducted by Pledgecamp, more than 80% of projects ship late — and some never ship at all. This is a testament to the severe lack of transparency that is infecting this space. Backers can’t tell how the creators are using their pledges in the first place. All these issues have resulted in reduced between backers and creators, which has resulted in lesser projects getting the funding they deserve.
Transparency is one of the core components of blockchain technology and smart contracts. Every single thing that you put inside them can be traced right back to its very origins.
No one has reviewed this piece of content yet