January 21, 2022

Crowdfunding Platform Kickstarter to Shift to Blockchain-Based Model

One of the top and most renowned crowdfunding platforms that exist in the market, Kickstarter is planning on abandoning its current business model and will be transitioning to a new model based on blockchain technology. An independent organization will build this for the crowdfunding company, which will initially be funded by Kickstarter, for working on the protocol. The Celo blockchain would be used for building the new platform. The crowdfunding platform is used for ideas, products and services and it made the announcement of shifting its operations to a blockchain-based model just yesterday. It published a blog post for making the announcement, which was titled ‘The Future of Crowdfunding Creative Projects’.

The company mentioned that one of the primary reasons for the shift was because of decentralization. Kickstarter said that the crowdfunding platform would become available to independent contributors, collaborators and even their competitors from all across the globe and they would be able to use it for connecting to or building upon. Moreover, they are planning for an open-source platform, so it can be forked by other similar projects and used for various purposes. This would bring the new platform to the entire developer community and it would provide the community with the tools they need for creating crowdfunding sites and not require any intermediation.

The company went on to say that the new organization would also release a whitepaper in the coming weeks. There are some other big companies that have begun to incorporate blockchain elements in their developments recently. According to the Kickstarter team, their crowdfunding expertise will come in handy when it comes to developing a blockchain-based protocol that can suit their needs in a better way. As mentioned earlier, an independent organization will create the new protocol, which will be financed by Kickstarter initially.

A Governance Lab will also be created by Kickstarter and it will be responsible for supervising the methods of governance relating to the protocol. They will also do research and even issue communications about the best ways of governing the new protocol through the use of blockchain tools, such as DAOs. The Celo blockchain would be used for deploying the crowdfunding protocol, which is a ‘carbon-negative’ and smart contracts-enabled blockchain because of the proof-of-stake consensus algorithm it uses. Kickstarter added that using Celo would help them in minimizing the protocol’s environmental impact. The price of Celo also benefitted from the announcement, as it rose to $4.48.

Since then, its price has come down to $3.93, which brings it to the same pattern as that of digital currencies like bitcoin, ethereum and others that are all posting losses currently. However, there are some Kickstarter users who have been very vocal about their dislike of the company’s decision. They have not only criticized the potential environmental effects of the switch to a blockchain-based model as these are becoming a mounting concern of late, but have also said that they do not understand the benefits that this kind of change could offer to the crowdfunding platform.

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