Gitcoin: Alternatives to the ICO model

Gitcoin: Alternatives to the ICO model

In addition to the slogan "build unstoppable applications", a use case by Ethereum has always been the decentralized financing of projects. However, constructs like the DAO or different types of token sales showed difficulties. With square funding, Gitcoin tries to break new ground here.

There is no question: the token sale market is dead. What started as a good peer-to-peer alternative to investors and VC funds has become a flood of empty marketing phrases, scams and finally strict regulations by the national authorities. And even in times of security token offerings, this actually new type of financing now leads a shadowy existence.

This is a shame because so many dedicated developer teams don't have a chance to find the funding they need for their projects. Especially when projects want to remain open source, one quickly comes across the Tragedy of the Commons: Who should pay for software that is free as in free speech and as in free beer (to change a well-known open source motto )? Yes, it does happen , but there is not really a lot of money , as proverbial rocks of the open source world can confirm. What is understandable: Many simply lack the money for really compensating support.

One for all, all for one: the power of quadratic funding

Almost two years ago, Vitalik Buterin published a paper together with Zoë Hitzig and E. Glen Weyl , in which an alternative to previous financing mechanisms is presented. In another article Vitalik describes the rather bulky paper a little more vividly. In this way, it also enables those who are not formula-savvy to understand the approach behind quadratic funding.

Quadratic funding tries to solve a known dilemma in the area of ​​financing. In summary, the problem is that previous financing models are fundamentally unfair. When investors vote with their capital (referred to below as money-centered), the system quickly becomes a plutocracy, a rule of the rich. A social money-lending mechanism (later referred to as human-centered) in which funds are collected collectively and then passed on via a voting process can also be unfair: the right to vote for those who give all their capital is no greater than those who hardly add something.

Quadratic funding tries to solve the dilemma by not increasing the influence of the donated capital linearly, but in the form of a square root function. Quite complicated, but a picture is worth a thousand words:

How to imagine quadratic funding like Gitcoin compared to other models

The figure above shows how the different financing models can be seen. A value measurement can be seen on the x-axis. The invested capital grows with this size. The Y-axis shows the influence that one buys through the invested capital. In money-centered systems, such as classic barter, the buyer would be in full ownership of the economic good above a certain amount. In a human-centered system, no matter how much money they feed into the system, no one can have complete influence alone. This is possible for him in the quadratic system, but he would have to spend a lot of capital on it.

But why quadratic funding? It is not for nothing that the X axis is labeled with "value assessment". The invested capital corresponds to the area in the figures above. And this grows linearly in the first two cases, but squarely in the last.

Gitcoin Funding: Grants und Bounties

So much for theory. What does this have to do with Gitcoin? One of the goals of the Gitcoin platform is to make investment in crypto projects fairer. Gitcoin wants to strengthen the open source ecosystem around Ethereum, and without luring with any coins. The platform uses square funding, among other things. Under Grants , there are a variety of projects, which interested people can donate money.

Yes, that's right: donations . Gitcoin is less about investing and getting a direct return of invest, but more about expanding the entire Ethereum ecosystem. You could put it this way: By supporting projects like Uniswap, you are helping the entire ecosystem and thus also the evaluation of Ethereum. Accordingly, ether investors can see it as an indirect investment. The token mania that we had in 2017 is definitely not possible.

Maybe you don't have money, but you want to get involved. For those with programming knowledge, there is definitely a large field of work here. One advantage: With these bounties there is good money to buy:

There are bounties for every skill level on Gitcoin

No money? No coding skills? No problem for Gitcoin

Now we are not all developers. Nor are everyone just fluid enough to support other projects. Even then, a visit to the platform is worthwhile. On the one hand, a wide variety of projects on the side help you stay on the ball with regard to new developments in the Ethereum ecosystem. But more importantly, those interested can learn a lot about decentralized Internet projects through quests - and win a few small, sometimes limited collectibles.

So-called kudos can be won for those quests, which can then look like this, for example:

An NFT token from Gitcoin

This gamification-driven learning approach, as shown in the quests on Gitcoin, is reminiscent of platforms such as Codecombat or Kaggle. This gamification helps beginners to better understand the different aspects of the Ethereum ecosystem. The quests also ensure that Gitcoin is not just a crowd funding platform, but also helps to enter into an exchange with the ether community.

►Website: http://axtschmiede.com
Support My Work On Patreon https://www.patreon.com/zealftw
If you want to support me for free then you can do so via the following options, thank you!
Use the Bittube browser And Make Money While Browsing! Here’s the link: https://bittubeapp.com/?ref?2JXLODL50

Publish0x – a place where both Readers and Bloggers Earn Crypto https://www.publish0x.com/?a=open5lPd7A

Earn Bitcoin through one of the oldest Faucets https://freebitco.in/?r=18413045

Earn Litecoin http://moonliteco.in/?ref=b50d5a9004e3

Earn BItcoin Cash http://moonbitcoin.cash/?ref=536CAB98A8B8

Earn BTC http://moonbit.co.in/?ref=17c0b775e45a

Join me On Minds and earn even more Cryptocurrency! https://www.minds.com/register?referrer=THauerBYI

Signup and get a FREE Guide on How To Create your Morning Routine! https://mailchi.mp/f5cabc2538c0/selfimprovement