Explaining the process of Book ICOs
While there are a lot of blockchain projects, only a few of them have real-life use cases that are already being implemented. Recently Publica was mentioned among only four blockchain products one can actually use today.
In this article, we are going to explain how Book ICOs powered by Publica’s platform are actually functioning.
Short introduction
If you are not familiar with the concept of Book ICOs, here’s a quick intro for you — a Book ICO is a crowdfunding campaign run by authors with the goal of raising funds for the production of literary works. The whole process is fully decentralized and all transactions are managed by smart-contracts. Instead of selling promises, an author is actually selling BOOK tokens with each BOOK token representing a copy of the upcoming book. This BOOK token serves as an access key for the corresponding book’s content. Just like in the case of traditional ICOs, the crowdfunding goal is completed when the hard cap (or soft cap) is reached.
Let’s dig into details.
A detailed explanation of the Book ICO process with examples
- Here’s an example of an ongoing Book ICO campaign on Publica — https://app.publica.com/eazye-crypto-investor-a-survival-guide
- When an author launches a Book ICO campaign, the platform automatically creates a unique smart contract for the BOOK token (each book has its own BOOK token name, in this case, the BOOK token is called — BOOK_ECIASG)
Since Publica is running Book ICO campaigns on the Ethereum blockchain, it is possible to check every smart contract on Etherscan.
3. I have bought one BOOK token (contributed to Book ICO) from the author’s page with MetaMask extension.
The whole process is transparent. Here’s the transaction:
What can we see from this transaction?
- 90% of contribution went to the book’s smart contract address https://etherscan.io/address/0xe989a03cb5c2e2e882023cf3bfa48d82cb5fcf65 (and will remain there until the end of the Book ICO campaign).
- 10% automatically went to Publica’s address. This money is what Publica earned.
Reader’s perspective
As it is seen, the book is not written yet, however, the buyer receives a BOOK token instantly. In the current implementation, unpublished books are not visible in Publica’s e-reader app, however, every purchased BOOK token is actually there in the buyer’s wallet.
To prove that BOOK token is on the buyer’s wallet, we can simply check Etherscan or add this BOOK token as a custom token using any interface, for instance, MyEtherWallet:
Once a BOOK token is received, a BOOK token holder becomes the owner of a book copy, and no one — including Publica — can revoke his/her ownership. The BOOK token holder can now do whatever he /she wants with their token — can send a BOOK to another person’s wallet as a gift, for example.
After the end of the Book ICO, once the author has uploaded the book to the platform, a buyer will see the corresponding book in his/her ereader app (in the future the workflow will be improved and buyer will see all BOOK tokens on the wallet even for books that are not uploaded to the platform yet).
Ending of a Book ICO
There are 3 possible scenarios of a Book ICO campaign:
1. An author has stopped a Book ICO
Authors have a possibility to stop a campaign. In this rare case, the system will check the status of a Book ICO campaign. There are only two possible outcomes — SUCCESSFUL (if a soft cap is reached) or FAILED (in case a soft cap not reached).
If a Book ICO fails, all contributors will be able to return their contributions back (this process is described below).
2. Book ICO’s Hard cap is reached
In case a hard cap is reached, the Book ICO’s status instantly updates to SUCCESSFUL.
3. Campaign’s finish date is reached
In this case the system will check if the status of a Book ICO is SUCESSFULL (soft cap reached) or FAILED (soft cap not reached).
Previously purchased BOOK token will always remain on the contributor’s wallet, doesn’t matter if the status of the Book ICO is SUCCESS or FAIL. In case of SUCCESS, the money that author earned during the Book ICO (90% of contributions as described previously) will be transferred to the wallet address authors specified in his/her account (author is asked to specify a wallet address in the author’s dashboard before launching a Book ICO campaign and this address is embedded into a smart contract code).
When an author finishes a book and uploads it to the platform (this information is displayed on the campaign’s page), readers will see the book appear in their e-reader wallet app.
There’s no risk for Book ICO supporters
In case the Book ICO fails — all contributions will remain on the smart contract address. Since the process is fully decentralized, neither the author nor Publica will be able to access this money. If a Book ICO fails, the campaign’s landing page will automatically display a refund button and all Book ICO contributors will be able to manually claim a refund by clicking “Return funds” button (once claimed, the money will be automatically sent back from the book’s smart contract address to contributor’s wallet address).
Note: when claiming a refund, contributors will also need to have some ETH to pay a transaction fee (refund transaction).
Publica has no control of authors’ or readers’ tokens, and only takes 10% as a service fee (which are not refundable in case Book ICO fails).
What’s next?
Excited? Participate in a Book ICO now. The complete list of all ongoing Book ICOs can be found here.
How to participate?
We’ve already created a handy tutorial on how to participate in a Book ICO and you can find it here:
And just in case you are struggling with anything else like creating your cryptocurrency wallet, buying PBL or wondering how to create your own Book ICO, please visit our Tutorial Section.
