Challenges faced by the crowdfunding industry
Fraud and scams
Lack of transparency and control in fundraising procedures often leave investors getting de facto incomplete or even scam projects — not the ones they signed up for, and some are sophisticated scams — with little scope for redress.
Additional costs
Intermediaries add costs to fundraising, and services like Crowdfund Mafia and Agency 2.0 act as intermediaries-to- intermediaries, consulting on a percentage basis to select platforms.
Rigid funding strategies
Current crowdfunding tools are inflexible; stakeholders have few options for managing different fund volumes without risking to deal with fraud and forced to reject particular funding strategies.
High fees
As intermediaries continue standing between stakeholders and fundraisers, investments become more costly than they could be. Fundly reports that initial fees reach $8 on particular fundraising platforms, with even more fees to pay per donation.
Unsafe communication
Forced to reach users through email, chats, and other standard yet vulnerable web-based communication tools, project managers cannot establish secure communication channels with stakeholders and ensure information doesn't reach bad actors.
Lack of funding opportunities
Traditional funding means restrict investors in their possibilities; in such industries as, for example, mineral production, investors have to deal with credit card-backed slow and unreliable payments and likely opt out of such markets.
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Contact usBlockchain solutions for crowdfunding from Aetsoft
Immutable campaign rules
Store all campaign information — phase description, goals, milestones, marketing materials, legal documents — on a forgery-proof, securely accessible distributed ledger where investors can access it to verify campaign process and requirement compliance.
Decentralized fundraising
Make fundraising processes transparent and KYC-compliant; smart contracts will issue money for project owners only when required milestones are reached. Stakeholders, in turn, could vote for the legality of each project in absolute democracy (through consensus algorithms).
Lowered operational costs
Thanks to smart contracts, you can automate operations and eliminate third parties to cut extra costs for fundraisers and eventually let them invest only the sum they initially planned to invest.
Private communication
Talk to communities and make announcements by sending private messages encrypted with public keys (visible to senders and recipients only).
Flexible fund management
Access a range of new funding strategies, like scheduled payments or regular payouts, by managing revenues safe and transparent with blockchain-enabled escrow, messaging, deposit, withdrawal of digital assets, and other tools.
More funding options
Digital assets based on the blockchain enable previously impossible funding and investment methods, including via tokenization of real-world assets and rapid, low-cost cross-border transactions.
Blockchain applications in crowdfunding
Use case 1. Wealth creation for low-income regions
Currently
Most low-income regions, particularly those in Africa, don’t have access to credit systems, and their residents don’t have bank accounts. Lack of proper financing leaves them in dire straits.
With blockchain
Blockchain-enabled digital assets remove crowdfunding barriers between war-torn, impoverished areas and modern means of financing with direct, p2p money transfers (of course, internet connection is required).
Use case 2. More rational fund distribution
Currently
With an excessive number of crowdfunding consulting firms and platforms, each requiring fees, the ultimately raised amount is far less than the one you initially planned to collect.
With blockchain
Smart contracts exclude middlemen, making such services as recommending the appropriate crowdfunding platform and fundraising itself autonomous and less pricey.
Use case 3. Establishing campaign transparency
Currently
Crowdfunding campaigns remain shady procedures, where insufficient record-keeping makes room for fraud during fundraising and failed donors’ expectations as a result.
With blockchain
Blockchain-enabled ledger keeps a comprehensive and permanent record of all fundraising activities throughout the entire campaign, ensuring accurate and consistent record keeping.
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