Introducing Weifund: a smart-contract based crowdfunding platform
WeiFund is a crowdfunding platform that leverages smart contracts. Founded and developed primarily by Nick Dodson, WeiFund is a spoke within the ConsenSys dApp ecosystem.
Decentralized Crowdfunding: A New Frontier for Raising Capital in the 21 Century*
Crowdfunding has changed the way organizations, groups and individuals have raised capital in the 21st century. In the past decade, conventional crowdfunding has positively impacted millions of worthwhile endeavors. However this movement is still in its infancy and new developments in decentralized technologies, specifically the blockchain, will initiate a new paradigm of capital raising and market-making in general. This post will cover conventional crowdfunding as it stands, and outline the future of its evolutionary counterpart — decentralized crowdfunding — and how Weifund is paving the path towards that future.
Crowdfunding exemplifies a trend toward development of projects with customer and fan bases already defined. It resembles a swarm-like motion toward specific ideas or inventions that actual people desire, with collaboration and community building core to its ethos. Within the crowdfunding trend there is growing niche — decentralized crowdfunding. What separates this niche is both technical and philosophical in nature.
Conventional crowdfunding is centralized and resembles a traditional corporation. It provides a service, charges a fee, and acts as a middleman or matchmaker [1]. The critical difference in decentralized crowdfunding is that it will accomplish the connective matchmaking and initial service by replacing that corporation with software at a fraction of the cost it takes to run that traditional business. The technological stack it uses is uncensorable, unalterable and more secure than any possible combination of the technology previously available before it.
Ethereum is an example of the underlying technology, which is a smart-contract ecosystem that will automate many intermediary business processes in a transparent and open manner [2]. For crowdfunding, the future will become so basic, simple, and clear, that this new philosophical paradigm will appear to materialize without much work at all. The bulk of the focus of business will shift from intermediaries to content creators, innovators, and a marketplace of participatory consumers.
Using Ethereum, Nick was able to code a crowdfunding utility in under 150 lines of smart contract code. This fact is both a technological marvel and an important step toward a more free and democratic way to raise capital for projects, movements and ideas across the globe.
WeiFund hopes to establish a beachhead in decentralized or web 3.0 crowdfunding. It intends to be ultimately supportive of campaigns and platforms in the space for years to come, by providing the initial code, interfacing and resources to make crowdfunding a fundamentally accessible and free utility for everyone.
WeiFund is not just a crowdfunding utility for merely raising capital. It is extensible and modular so that other smart-contracts can interface interdependently with its core. For example, this will allow individuals to start equity crowdfunding campaigns where the headache of share issuance, management and ownership is a thing of the past. Think of receiving 1000 shares in a project you just contributed to, and within seconds trading those shares on a virtual exchange such as EtherEx. With this utility, we can collectively organize our ideas and resources efficiently , outside of the baggage that has followed such economic behaviours in the history of investment.
Campaigns operated on smart-contract ecosystems can be hyper-financed, where complex token or ledger systems can be instantaneously implemented in real-time, tremendously expanding the set of available options for investors, contributors and campaign operators [2]. WeiFund and similar decentralized crowdfunding platforms will leverage the inherent nature of smart contracts to open the front door of this technology. From here, we can begin to discuss what future we want to build for ourselves. While decentralized crowdfunding may at first only address a niche in consumer or organization market demand, it is possible that with increasing market demand, WeiFund or similar services could become the new standard for contractual crowdfunding.
For more information, please visit our website http://weifund.io or follow us on twitter @WeiFund.
Nick Dodson, Ashley Taylor, and the ConsenSys team
@IAmNickDodson @ConsenSysLLC
References & Footnotes:
[1] “The Future of Finance: The Socialization of Finance” available athttp://www.parksquare.com/uploads/insights/TheFutureofFinance_Part_3_03-13-15.pdf (last visited Oct 4, 2015)
[2] Vitalik Buterin, “A Next-Generation Smart Contract and Decentralized Application Platform,” November, 2013, available athttps://github.com/ethereum/wiki/wiki/White-Paper (last visited Oct 4, 2015).
[3] Oxfam, “Wealth: Having it all and Wanting More,” January, 2015,available athttps://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/ib-wealth-having-all-wanting-more-190115-en.pdf (last visited Oct 4, 2015).
[4] Jed Cohen, “The Future Of Crowdfunding: What The Next 5 Years Will Bring” Feb 20, 2015, available athttp://www.forbes.com/sites/theyec/2015/02/20/the-future-of-crowdfunding-what-the-next-5-years-will-bring/ (last visited Oct 4, 2015).
[5] Jodi Helmer “6 Trends That Are Shaping the Future of Crowdfunding” August 14, 2015, available at http://www.entrepreneur.com/article/248122(last visited Oct 4, 2015).
[6] “The Future of Crowdfunding” (KPMG) September 23, 2014, available athttp://www.eban.org/wp-content/uploads/2014/09/23.-The-Future-of-Crowdfunding.pdf (last visited Oct 4, 2015).
[7] Mor Assia “Fund Forward: 8 Exciting Trends in Crowdfunding That Are Coming Sooner Than You Think” May 19, 2015, available athttp://www.crowdfundinsider.com/2015/05/68010-fund-forward-8-exciting-trends-in-crowdfunding-that-are-coming-sooner-than-you-think/ (last visited Oct 4, 2015).
