ICOs are getting too expensive. Entrepreneurs need a viable alternative to innovate.
At FundYourselfNow, we have helped many ICOs complete their fundraising successfully, including our own since 2017. One alarming trend that we have noticed is that the cost of promotion and advertising to run a successful ICO has increased more than 10 times since the start of 2017. Successful ICOs need a sizeable marketing budget before they can raise money. For example, a basic press release costs 5000 USD (0.3btc) on cointelegraph, and there is no guarantee that they will publish your press release.
At FundYourselfNow, our mission is to make the great ideas happen. There are many young entrepreneurs who have a vision and they just need a small amount of capital to turn their idea into reality. 96% of the projects on kickstarter raise less than 100k.
First-time entrepreneurs with no capital are currently priced out of the ICO market right now.
Over the last 2–3 months, we have been researching into how we can help serve the small entrepreneur better, and here is an interesting case which we want to share with everyone.
Community Funded Coin — A Case Study on EagleCoin
EagleCoin was started fairly recently in August. Their aim is to develop a global payment gateway using blockchain technology.
Like how most entrepreneurs start off, the founders were working on their project outside their working hours and using their own salary to fund the project.
What is EagleCoin?
EagleCoin is a Proof of Stake (POS)Token on the Ethereum blockchain. Staking is a concept where if you hold tokens, you will automatically get a few tokens (e.g. 0.1%) given to you for free every day. The Staking portion is handled via the smart contract.
To reward initial EagleCoin supporters, they are giving 100% stake reward for the first year, 50% stake reward for the second year and 10% stake reward for the third year. Basically what these means is that if you hold 1 EagleCoin now, you will have 2 EagleCoin next year.
Claiming your extra coins is extremely easy, just transfer coins to yourself periodically or claim it from the smart contract, which will trigger the staking code.
Their plan was to sell off tokens to their community and have enough capital to quit their jobs to work full time on this and achieve their vision.
The Successful Results of EagleCoin
They started off doing the usual bounty campaign in bitcointalk forum in November to get people to spread the word about EagleCoin as they have zero marketing budget and also going around to talk to people in Indonesia.
People really liked their idea. They were willing to help spread the word about EagleCoin even though the price of eaglecoins was really low (like 2 cents) back then and they were paying peanuts compared to other bounty programs on bitcointalk forum.
But their incentive structure & idea made sense for the initial supporters (since you get 100% more in the first year and you can claim free tokens every free day). They are planning 8 rounds of airdrops for their bounty program and they capped participation at 500 people for each round. Currently, they just ended round 3 of their bounty campaign and each round was oversubscribed.
Currently, they have over 2600 active telegram members in their international chat group and 1000 in their Indonesian chat group. They have over 10,000 twitter followers.
Concurrently, they also got listed on small exchanges like Etherdelta, IDEX for free. As community support was growing, they managed to get listed on a bigger exchange Mercentox too.
The coin price as of 9 Jan 2018 is 20 cents, 10 times the price when it was tradeable early Nov. Their market cap is now at 400k USD.
Within two months, they have raised enough through the sale of their own coin for the 4 founders to start working on this full time to fulfil their dream. In this current ICO world, this amount of money is a pittance. It won’t even be enough to get Cointelegraph to run a marketing campaign for you.
However, in Indonesia, where the average salary for a programmer is 500 USD or less, this means a great deal to them. It is enough for them to build a product. It is enough for them to start making a difference to their local communities and embark on their great idea.
The founder himself is not drawing any salary from the company, and makes his income solely by selling the free coins that he gets from staking. This is to ensure that his incentives are completely aligned with the interest of his own coin and his stakeholders.
EagleCoin is what I term as a community funded coin. They encapsulate the very essence of crowdfunding, and the initial growth is supported by community donations.
Ethereum Tokens Proof Of Stake vs Traditional Proof of Stake
Traditionally, Proof of Stake Coins (e.g. NavCoin) required the developer to create/fork a blockchain, make their own coin wallet and attract people to be transaction validators on their blockchain network
With Ethereum POS Tokens, anyone can launch a POS token within 10minutes for less than $10 USD for their own community.
The jury is still out on whether EagleCoin will succeed in the long run, but I believe they have pioneered a business model that truly make sense for all participants: the entrepreneurs, the investors, and the community.
At FundYourselfNow, we will be building a new feature that allows for easy creation of their Community token within minutes that allows staking.
Our hope that every single entrepreneur will be able to replicate the success of EagleCoin and raise the small amount of funding they need from their own communities to start their dreams.
A good friend of mine recently shared this quote on crowdfunding.
“I believe in the power of crowdfunding, even if it is a donation with no recourse. Why should entrepreneurship be in the hands of so few? Truthfully, it should be in the hands of society.” — Jamie Lee from Viola.ai:
We need all of you to make great ideas happen!
If you want to know more about EagleCoin, join their telegram group here.
Kenneth,
Co-Founder, FundYourselfNow