What is The Construct? — Report #2

Published in

The Construct

4 min readMay 20, 2018

The Construct, a decentralised crowdfunding platform for entrepreneurs and investors to fund and grow trusted projects. Built on the NEO network.

What’s the problem?

With traditional online crowdfunding platforms such as Kickstarter and Indiegogo there is a huge failure rate of projects not receiving enough funding or asking too much. Among the successful funds, output isn’t always met to the standard that was promised and in some cases not at all. These platforms also provide little to no investment incentive and essentially act as a pre-order promise service, yet it still attracts billions of dollars.

Welcome to crypto, Initial Coin offerings (ICOs) have enabled vast sums of capital to be raised in a very short amount of time (12 Million USD in 10min). The problem with the current state of ICOs is that they require very little true substance to raise these huge funds (Some don’t even hide it). This lack of structure attracts scammers and inherently doesn’t allow enough transparency to its investors.

In the current ICO space, a project generally only gets one opportunity to receive public funding via an ICO, forcing an all or nothing scenario for funding opportunities. There is a market for an alternate means of funding for both the project and investors. Projects need a way to incrementally receive funding based on demand and interest to allow for natural growth of the initial resources, team and capability. The Construct provides this solution.

What’s our solution?

The Construct leverages the financial opportunity ICO’s can provide. But solves these underlaying issues by implementing a unique funding structure for which relies on a planned project Funding Roadmap, specifying the exact process the project will take to reach the proposed output. A Funding Roadmap is broken down into a series of Milestones representing a significant task or goal which requires some sort of funding to complete, known as Funding Stages. A chain of alternating Milestones and Funding Stages will become the structure of the Funding Roadmap, which will be managed of The Construct’s Smart Contract.

Milestones

Our unique implementation of milestones aims to add a new level of engagement between the work a project delivers and the investors that expect results. A Milestone must be completed before the following Funding Stage can begin, which must be proven. Investors from the preceding funding stage will be given the opportunity to reject its completion if necessary (The majority consensus of investors are required for the milestone to fail).This opt-in approach is designed to maintain efficient project momentum while still holding project creators accountable.

Project Sub Token

Every project will be given its own Sub Token, which is a similar to a standard NEP5 system token except it is managed on The Construct’s smart contract instead of its own. This allows finer control of its distribution and refund mechanisms.

Technically this token could be exchanged like any other, however it doesn’t follow the NEP5 standard directly so it wont be supported by default, for now. A future vision would be to have an over-the-counter type exchange on the platform directly, or enable support on other exchanges.

Funding Stages

A funding stage on its own can be thought of like a mini ICO. Where it has a start date, end date, goal, and tokens minted. However unlike an ICO, it is integrated within a larger roadmap and with direct influence on the surrounding milestones by the use of Sub Tokens.

If a funding stage goal isn't reached by the specified time limit, all immediate contributors will be refunded. This guarantees a predefined demand and value to any given stage if successful, minimising risk for both the investor and the project as a whole.

Any stage can also have an associated discount, whereby Project Sub Tokens will be sold at a cheaper rate to the investor. Typically earlier stages will have a higher discount to offset investor risk.