Exploring the Decentralized world
Decentralization has brought about significant changes in different industries, and crowdfunding platforms are no exception. Platforms like Kickstarter and GoFundMe have been caught up in controversies, leading to the disruption of the traditional crowdfunding model. Blockchain has brought about Juicebox, a new crowdfunding platform that leverages smart contracts to codify donations, refunds, and disbursements on-chain.
Unlike traditional crowdfunding platforms where the platform staff has discretion over the deployment of funds, Juicebox's deployment of funds is governed by code-based rules. Launched in July 2021, Juicebox is the first Web3 programmatic treasury management protocol for Ethereum-based projects. Its aim is to simplify the process of building a treasury and issuing tokens to a decentralized project community, which is usually a complicated process.
Exploring the Juicy World of Decentralized Crowdfunding on Juicebox
Juicebox's design allows anyone to configure and deploy a smart contract for fund management and token distribution for any project. The platform requires a project name, description, website, and official media to create a funding cycle, manage funds by setting a funding target and duration, commit portions of every withdrawal to other Ethereum wallets or Juicebox projects to pay contributors, charities, or other projects, set rewarded tokens to the community when they contribute and the reserved percentage, and set additional configuration such as discount rates and other restrictions.
Individual investors can donate ETH and get the project token at an exchange rate. There are currently 372 projects powered by Juicebox, raising a total of 44,195 ETH (approx. $88.4M). The top two projects are AssangeDAO and ConstitutionDAO, which account for 66% of all funds raised. Juicebox charges a 5% fee from all funds in exchange for $JBX, the governance token of Juicebox.
Juicebox has not been funded by any VC, but it has already raised 6,721 ETH (approx. $13.4M) funded by its community in JuiceboxDAO through 15 funding cycles. The transparency of each donation, redemption, withdrawal, and reserves sets Juicebox apart from most crypto projects, which usually show this in one section of their whitepaper.
With blockchain technology, community power has evolved from ICOs to IDOs to pools within those DEXs, e.g. Curve CIPs (Curve Improvement Proposals) and factory permissionless pools. Anyone can propose a project, which has led to many interesting advances, but also many scams. Juicebox allows anyone to start their own DAO, and while some projects are reasonable, not every DAO is. There is a need for individual investors to assess the risks and benefits of these unvetted permissionless projects or DAOs.
Conclusion
In conclusion, Juicebox is a great example of Web3, where anyone can raise funds directly from the community. Its transparency and community-based approach meet the requirements of a DAO, representing the spirit of decentralized, token-based economics. Decentralization has brought about significant changes in crowdfunding, and with the integration of emerging technologies like AI and IoT, the future of DAOs looks even brighter.
Patrick Widmer, Zug, April 18th 2023.Links
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