Using Nxt as ICO Platform

Blockchain based crowdfunding campaigns has become very popular recently. The Nxt blockchain offers several simple models for issuing a crowdfunding campaign without the need to write smart contracts, with built-in user interface and with strong security provided by the blockchain itself.

Let’s look at some of these built-in crowdfunding modules

Asset based

Issue an Asset on the Nxt blockchain, specify the number of tokens, then offer your asset for sale. The asset will be immediately available for trading using on blockchain bid/ask orders, with its value denominated by NXT . Trading between accounts can start as soon as the token is released. The asset issuer can pay dividends automatically based on token holdings at a certain blockchain height and can reduce the supply of the tokens (but not increase it)

Crowdfunding Examples: NEM, SIA, ADEL, JANUS

Controllable Currency

Represents a restricted token that only the token issuer can offer for sale and all transfers must include the token issuer as sender or recipient. Use controllable currency to issue and sell, a token that represents balance in a future system. The token is only used for recording the balances until the actual system which utilizes the token is launched. Accounts cannot trade or transfer it between themselves.

Crowdfunding Examples: Ignis

Reservable Currency

In this model, tokens are not issued immediately, instead the token issuer sets a block height by which the token is to be issued, and an amount of NXT needed in order to issue the token. Users then lock their NXT to reserve their token balance. In case the required amount of NXT is not raised before reaching a certain block height, the token issuance is cancelled and funds are unlocked. In case the required amount of NXT is raised, the tokens are split between investors according to their proportional NXT investment and the raised NXT amount is credited to the token issuer account.

Crowdfunding Examples: TNSSE, NXT Academy

Other Advantages

When using a blockchain for crowdfunding, all users need to create their accounts before participating in the crowdfunding. This saves the need for the token issuer to go through a manual reclaim process of actually distributing the tokens which is necessary when using a centralized crowdfunding platform or a simple send tokens to Bitcoin address scheme.

Nxt provides friendly user interface for crowdfunding inside the official Nxt wallet so there is no need to develop sophisticated user interface just for the purpose of the crowdfunding campaign. However, if you like to develop your own crowdfunding widget, you can do so by implementing a wallet plugin or an independent web page while reusing the existing wallet infrastructure and server API.

In case of high demand for your tokens, Nxt has implemented the option for users to schedule their buy orders before the crowdfunding begins and thus considerably reduce the chance of power users to front run others with their buy transactions as happens so often with ERC20 based crowdfunding.

Transaction fees on the NXT network are affordable, currently in the range of 0.1$ per transaction.

The NXT token is publicly traded on multiple exchanges with average daily turnover of around 10M$. Trading NXT for Bitcoin or altcoins can be performed using the wallet itself using the ShapeShift or Changelly exchanges.

Summary

The Nxt blockchain provides several simple, robust and secure crowdfunding models which do not require the implementation of complex smart contracts or complex web site back-end and considerably reduces the security risks.