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Lack of transparency will kill ICOs and the Blockchain unless an element of trust is built into them, Tokenza plans to do just that.
If you are someone who is interested in startups or small businesses, it is highly unlikely that you have not heard about initial coin offerings (ICOs). ICOs have come into their own and according to TechCrunch, the money raised by ICOs has reached $800 mln by Q2 of 2017. The same publication though ironically reported in the same month that the US Securities and Exchange Commission (SEC) had charged two ICOs with defrauding investors. The SEC has a whole page related to ICO advisory aimed at potential investors. An excerpt from that reads, “Investing in an ICO may limit your recovery in the event of fraud or theft. While you may have rights under the federal securities laws, your ability to recover may be significantly limited.”
Fraud remains a significant problem with ICOs. Wired called ICOs the $3.8 bln bubble. The lack of significant safeguards has led to the mushrooming of token sales (ICOs), which are not only a threat to investors but can undermine Blockchain technology, genuine startups that want to raise funds as well as the stability of the world economy. What if the nature of the beast itself is changed to protect investors and the industry? Tokenza is a company that plans to build a decentralized crowdfunding and freelancing network that will change the way things are done.
On the outset, the primary purpose of ICOs seems to be fundraising, but the problem is - it is not money that makes great projects, it is the people. Without the right people to deliver on the vision of a project, all you have are castles in the air. The Tokenza project is not only building a decentralized crowdfunding network but they are also going to be providing a freelancing base that will allow startup projects to find the right people to execute big plans. The Tokenza decentralized network, which they like to refer to as just ‘the network’ will be based on Blockchain technology and will be underpinned by their token called TKZ. Project backers can use the tokens for funding purposes and by project owners for submission. What is more, freelancers can earn TKZ by providing their services on the network.
Tokenza Network is about moving away from the status quo that dogs the ICO landscape. It is about creating a proper ‘system’ that ensures stability and transparency. The Tokenza network will be built on the Ethereum Blockchain. Ethereum allows for smart contracts to be built and the Tokenza Network’s smart contracts and other developments will be open source. Transactions on the network are secure, auditable and publicly verifiable. For freelancers who are now part of the growing so-called ‘gig’ economy, they can take advantage of a stable system and one single token to get paid in from diverse startup projects. No longer will they have to suffer the tyranny of being paid in various tokens that have questionable value. This, of course, frees them up from having to handle numerous wallets and having to struggle with exchanging their sets of tokens for fiat at exchanges, etc.
On the Tokenza Network, things will be done differently when it comes to fundraising. The whitepaper released by them clearly outlines their technical and holistic vision for this. The constituents of the system will include project owners, backers, freelancers and curators. In order to bring the element of trust, users on the network should be compliant with international KYC and AML specifications. They will also be required to provide necessary documentation to get full access. Unverified users will be restricted in their ability to conduct transactions or work as freelancers to certain limits. It is compulsory for curators to be verified.
On Tokenza Network, each participant has an internal scoring and ICOs will be held in small and multiple fundraising rounds. Valuations will be more realistic and correlated to the stage of development of the projects. The platform will be structured so that there is considerable social pressure to deliver on a project’s stated goals and to comply with the rules.
As Vincent Fontaine, CEO of Tokenza tells Cointelegraph:
“Our vision is that in the future, no investor will invest into an ICO or a Blockchain project without using a platform like Tokenza. We are trying to create the one-stop-shop for Blockchain fundraising and freelancing, a platform where entrepreneurs, investors and freelancers are confident about everyone they are working with and incentivized to play by the rules.”
You do not throw the baby out with the bathwater. ICOs may be broken today, but they are fixable. Crowdsourcing needs the magic of decentralization and verifiability to make it reliable. This shall not only fix the broken ICOs but also allow formal and old economic participants with deep pockets like banks and financial institutions to start taking an interest in crowd sales. The Tokenza crowdsale to fund this initiative is about to start soon. Investors can head to their website to register for it and receive notice 24 hours before the sale begins. The project, we are told at Cointelegraph, has already received $200,000 of seed funding within hours from private investors and the company is in the process of being incorporated and a legal framework is being formed. Tokenza may just be the medicine to prevent the ICO fundraising bubble after all.
Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.
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