BRO: Crowdfunding Made Smart!
When it comes to investing in the cryptocurrency arena, the prospects can at times be overwhelming. ICO’s and STO’s are seemingly popping up left, right and centre while failing to address the underlying issues which have plagued the industry since their inception.
Investors are drawn to ICO’s as they have proven to at times be extremely profitable, yet historically, they come with significant risk. Bad practices and corruption are the new norm and investing in upcoming coins can resemble a game of Russian roulette.
A recent study conducted by Statis Group in New York found that 81% of ICOs are scams, and only 8% of ICOs progress to trade on the market. Unfortunately, over the past few years, many investors learned this the hard way. Yet, the blockchain sector is one of innovation and resourcefulness, and when faced with obstacles the industry continues to persevere and reinvent itself once again.
Introducing; Believers Reward Offering (BRO), the alternative to ICOs or STOs that the cryptocurrency world has been waiting for. Born of necessity, this new technology has been engineered to address the failings of its predecessors: Initial Coin Offerings and Security Token Offerings. BRO is a crowdlending investment system which allows corporations to finance its development by borrowing crypto assets (stablecoins) from investors around the world, and is the first crowdlending protocol created on the blockchain that utilizes smart contract capabilities.
The primary concerns with ICO’s are twofold; lack of transparency leading to fraudulent activity and scams, and extreme price volatility and manipulation. BRO addresses these issues, and more.
Lack of Transparency
Scams and stolen funds are amongst the largest issue facing ICO’s. The anonymity and cross-border nature enable advanced forms of difficult to recognise pyramid schemes as well as blatant misrepresentation. There are many cases in which millions of dollars were raised before the company up and disappears. Fraudulent names and locations, along with jurisdiction regulations, make it nearly impossible to indict these individuals.
Believers Reward Offering aims to address these concerns by implementing a 100% transparent crowdlending system in which a smart contract is fully integrated to the BRO’s financing operation thereby guaranteeing the performance of the agreement between the investor and the borrower. A smart contract is a self-executing contract with the terms of the agreement programmed directly into the code. The agreement is subsequently deployed and distributed across a decentralized blockchain network, essentially binding the contract while automating the execution of the conditions. Once a smart contract has been put in place it is nearly impossible to withdraw or modify the agreement due to the inherent immutability of the blockchain.
By utilizing smart contracts, investors can be confident that the promises made by the Token in question will be carried through, and that the risk of an exit scam is reduced exponentially. All the terms and conditions of the BRO protocol are outlined plainly in the smart contract, including the initial amount to be reimbursed, the interest payable, the borrowing rate, the duration of the loan, the repayment frequency, and the events triggering the payment. There is no room for breach of contract or misrepresentation as the reimbursement is fully automated, irreversible and reflects the initial trust.
Volatility and Manipulation
The ‘Pump and Dump’ phenomenon has been another significant challenge in the world of ICO’s. A ‘Pump and Dump’ is a form of fraud, in which the price of a coin is artificially inflated through false and misleading statements, in order to sell it at a higher price. Once the orchestrators of the scam sell their overvalued coins, the price falls and investors lose their money.
By implementing several stabilization mechanisms the BRO protocol significantly decreases the opportunity for price manipulation, consequently curtailing the occurrence of ‘Pump and Dump’ schemes and limiting volatility. It does so by executing a three-pronged approach, ‘The Stability Trifecta’ if you will.
First, instead of repaying the investors with a one-time lump sum payment as is the case with the majority ICO’s today, the tokens are distributed over a period of 12 to 18 months (dependent upon the initial investment) through quarterly payments. 50% of the initial loan is repaid during the first quarter in the form of a stablecoin, while the remaining 50% is repaid over the term of the loan in the form of Tokens. The loan interest of 10%, 12%, or 15% is also paid quarterly in the form of TOZ Tokens.
Second, investors receive their tokens according to the start date of their individualized loan. This means that investors won’t all be receiving their tokens on the same day. By repaying the tokens over an extended period of time versus a lump sum payment, BRO substantially reduces the probability of a mass sell-off thereby limiting price volatility.
Lastly, as a means to encourage long-term holding, BRO offers incentives to the investors who do not sell their tokens but hold them. Investors will receive a bonus of 10% each quarter if they elect not to withdraw any tokens received in the previous quarter. By encouraging individuals to hold their tokens instead of selling them, not only does this limit volatility it stimulates growth in the valuation of the coin.
Final Outlook
By solving the central pain-points that have plagued ICO’s over the past few years, the Believer’s Reward Offering protocol is poised to take the crypto world by storm. Legitimate tokens will soon exclusively be crowdfunded and offered via BRO, while scam coins will remain in the realm of ICO’s and STO’s leaving a stark divide in the industry. Ultimately coin scams will become obsolete, and while I’m sure the fraudster will invent new ways to dupe the public, investors can be assured that their investment is safe with BRO. Goodbye ICO’s, Hello Believer’s Reward Offering.
