Why we plan out Desmos’ High-Resolution Fundraiser
Round-0 of Desmos will be opened on 14 July 2020. Please indicate your interest by filling out below form:
Forbole: wearing 3 hats
Forbole, the initiate core team building Desmos, is in an interesting position as it is a team with three hats: validator, block explorer and Desmos. Our experience as an active validator has greatly influenced how we plan out Desmos.
As validator, we fully understand the feeling of missing the chance to join the early private sale of a project you are working on. This happens as most (if not all) of the projects will not consider validators (or contributors such as developers and community builders) as their first angel investor.
Root cause of centralization
We think one of the root causes of centralization of stake is because projects raise too much money in early stage. In order to raise millions USD in early stage, projects can only rely on pure financial investors (mostly VCs) at a low valuation.
This is probably one of the root causes of early centralization of stake. Assuming a total staking ratio of 70% (which is quite high actually), owning 24% of stakes may lead to 34% of voting power. If projects raise over $1M in very early stage, this is not uncommon that they have sold this 24% to a few parties.
But early investors deserve a low price as they have taken more risks. If projects should keep a low valuation to reflect its progress and simultaneously keep the tokens sufficiently decentralized, then the remaining variable that can be adjusted is the amount of fundraise.
High-Resolution Fundraising
Instead of launching a few large rounds of private sale, we plan to launch a number of smaller tranches at increasing valuations more frequently in the next 12 months. We will keep improving our products and acquiring users during this period to justify the increase in valuation. Supporters may join us earlier at lower valuation or they wait for more tractions and join later depend on one’s risk appetite.
With this strategy, this is easier for us to keep moving. Forbole’s existing business model which provides recurring income (validator’s commission) and non-recurring income (software development) can also support Desmos as much as possible.
High-resolution fundraising strategy is not new, but this looks like an experiment in fundraising of crypto projects nowadays. To help us to decentralize as much as possible while obtaining the sufficient resources to build Desmos, we need your support. Round-0 of Desmos will be opened on 14 July 2020. Please read Desmos deck and introduction and indicate your interest by filling this form.
Thank you and stay safe!
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