Tokenization of Open Source Projects
Funding for an open source project? Sounds a little bizarre, right? But in this post, we explore the potential that blockchain is giving this idea.
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Funding an open source project is always a tough task for any open source project owner. There are multiple possible reasons behind this, but one reason may be the inability to create a proper need for backers to support an open source project. After all, the open source project will be available for free after it gets released. So, why back an open source project in the first place? There are many examples of open source projects that have been successfully funded. Some of these include MyCroft, Q.bo One and more. This leads us to one more important question, is there anything that can change the current state of open source projects funding? Well, an Initial Coin Offering (ICO) can.
Let’s explore another new option that can be used for funding open source projects; Initial Coin Offering (ICOs).
What Is an Initial Coin Offering?
Funding of startups or projects has drastically changed in the past year or so. Earlier, startups focused on getting funded by venture capitalists, angel investors or incubators. With fierce competition for fundraising, startups are now moving towards ICOs. So, what exactly is ICO? Let’s explore.
According to Micha Benoliel, in his post about ICOs, he describes an ICO as follows:
“An Initial Coin Offering (ICO) enables funding of projects through the sale of tokens or cryptocoins, which are similar to shares of a company, though usually without equity being exchanged.”
The startup or the project owner will create the necessary ecosystem in order to distribute and manage the token. Brave ICO is one of the prime examples of how successful ICOs can be. Brave raised $35 million in just 30 seconds after it went public.
Will ICOs Play an Important Role in Open Source Projects Funding?
Until now, we have discussed two important things. First, we discussed how hard it is to do crowdfunding for open source projects, and then we discussed how ICOs are changing the world of startups.
Now, the real question remains, will ICOs play an important role in open source projects? If we take a look at the current market state, it is hard to gauge the true impact of an ICO on open source projects. However, there is one example that stands out. TrainAI, a leader in artificial intelligence, is currently working on an open-source AI-development ecosystem built on Blockchain technology. They plan to release a token sale of $50 million.
In the future, we may see many similar platforms take advantage of the same working model. We can find similar ICOs being implemented in non-open-source projects. One such example is LiveEdu.tv, an edtech startup that is also working on their ICO which will be released soon.
In conclusion, we can say that there is a clear future for open source projects if they are designed to take advantage of the token and blockchain technology. Another thing that can impact its success is the involvement of the community. The community needs to become more mature and understand the concept behind ICOs and then participate in them by either buying tokens or connecting to the new audience and convincing them about the benefits.
Do you think that there is a future of ICOs in open source projects? If so, don’t forget to comment below and let us know.
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