Zero Dollar DAOs: A New Kind of Crowdfunding
Crowdfunding is our future.
We no longer have to rely on big investors to supply a hefty paycheck to our projects. If we have an idea, we can simply pitch it to the Internet, the everyday customers. We can sell our idea directly to those who would purchase it. With the customers’ help, contributions can easily jumpstart a project.
Benefactory, a new decentralized crowdfunding platform, plans to change how projects raise money. Not only will the funds be safer in their contracts, but the contributions will be on the blockchain. Those who donate to the project will have their address and total amount given to the project recorded.
Niran Babalola developed the idea for Benefactory after being inspired by the DAO. Babalola, who is a Project Engineer at Consensys, was impressed by the foundation of the DAO. Even though it was flawed, it was still quite an achievement.
“Not the millions of dollars raised, but the organization itself: a few thousand database entries gave scattered strangers a shared purpose,” Babalola said in a post.
This is where Benefactory is different from the DAO. Instead of funding one entire organization and storing all the funds in one place, the commonwealths, or zero dollar DAOs, they will fund individual projects. The commonwealths will not hold any of the funds.
Babalola spoke to CoinTelegraph describing the Benefactory in more detail:
“A commonwealth is just a collection of crowdfunded grants toward a shared mission. Contribution amounts can be displayed to the public, but more interestingly, the amounts can be consumed by other contracts. A voting contract like Carbon Vote can easily be built which uses commonwealth contributions instead of ether, so commonwealths can speak with one voice and democratically decide what counts toward the commonwealth’s mission.”
Babalola decided to operate his project on the Ethereum blockchain because, “It is the most mature and interoperable platform for defining new social and economic interactions that can occur without middlemen.”
He continues in the CoinTelegraph interview, that reason alone is why everyone should only use Ethereum to start creating and building apps.
The first commonwealth, Common Press, is set to launch next month.