The 92% Problem in Crypto
Since the inception of Bitcoin in 2009, thousands of cryptocurrency projects have come into the space. Every altcoin has claimed to bring utility and value to build upon the proof of concept built by Satoshi.
As of this writing, the global market cap of all tokenized digital assets exceeds $USD1.75T. In spite of the massive growth in the architecture of Web3, there is a bed of scepticism that causes centralized institutions to hit the snooze button on mass adoption.
Mundane analogy aside… If we could sum up the single roadblock that is ahead of our vision of a trustless Web3, it would be this:
The vast majority of digital assets are outright scams.
According to a study from Satis Group LLC, a New York-based premier ICO advisory company that also works as a digital asset focused investment bank, over 80% of ICOs are scams. This was evidenced by data found via publicly available sources.
The ICOs in this study had a minimum market cap of $USD50M and were expected to go into active trading. Each project was put into six main categories: Scam, Failed, Gone Dead, Dwindling, Promising, and Successful.
Some Quick Definitions on the categories we’ll focus on.
Scam: Projects that showed usual availability and promises, but turned out to be fraudulent. Even with no apparent red flags.
Failed: Projects that raised partial funding for their ICO, but were abandoned midway or refunded due to lack of completion.
Gone Dead: Raised funding, but never made it to exchange due to challenges.
We don’t know what’s going through your head. But those numbers are astonishing to us. Adding this context to the issues of volatility, lack of utility and education, no wonder the elites are only dipping their toes in.
Setting aside the bottlenecks to mass adoption, how does this problem affect investors, both institutional and retail? In the Information Age, we have access to more data (knowledge) than ever before. At the same time, this ocean of information creates a glut. Which makes it harder to ascertain good data from misinformation — or worst, scams.
There’s no publicly available source that is able to reliably point out and prevent scams or no-utility projects. And when a bad actor builds trust with a community of investors, the consequences of the capital raised are devastating in many scenarios.
Moving further along in the study, we find something very interesting in our six main categories.
Projects that were scams, failed, or abandoned have one commonality: They never made it to active trading. That means over 90% of cryptocurrencies are never traded on a CEX or DEX. This leads to a variety of outcomes, but the main pain points here are thus: investors lose money and crypto looks like a joke.
The vast majority of digital assets will go the way of the DotCom Bubble. This is expected. Except in building the future of Web3, we can and ought to learn from the mistakes of Web1. This is why Imbue is so vital to the future of the digital age.
With our decentralized infrastructure for crowdfunding and venture funding, Innovators from any walk of life will not only be able to bring their great ideas to reality. The whole world will be able to verify that the projects they’re investing in are actually worth it.
In the Imbue DAO, seeking funding will be as simple as proposing your idea, your funding goals, and the milestones you achieve to earn funding. In this process, the community that wishes to participate will vote on the projects that receive funds from investors. Then, at each milestone, before each round of funds are released, progress is verified with votes from the project council.
All of these touchpoints are verified via the Polkadot validation framework. Accountability empowered by the blockchain.
You can probably imagine that there’s a whole world of use-cases and organizations that this solution will serve. And unlike the vast majority of altcoins, our DAO will have a working product before any private sales or venture funding. Our local testnet on Rococo is being refined now via active feedback from our Telegram community — public testnet set to launch in Q2.
We are moving closer and closer to mass adoption every day. We just need an alternative to #DecentralizeTheVCs and bring accountability.
About Imbue Network
Imbue Network is a decentralised crowdfunding DAO built on top of the Polkadot blockchain platform. It is an idea incubator open to the entire world that allows anyone, from any walk of life and for any kind of endeavour, to submit and vote on Ideas worth Funding from the communities that believe in them the most.
Contact Imbue Network
- Telegram: https://t.me/ImbueNetwork
- Twitter: https://twitter.com/ImbueNetwork
- Medium: https://imbuenetwork.medium.com/
- Linkedin: https://www.linkedin.com/company/imbue-network/
- Official website: https://www.imbue.network/
- Official website: https://www.imbue.network/
