ShuttleCast 2 Recap: Fundraising with cryptocurrencies
On this episode of ShuttleCast - a podcast about scaling products in Web 3, CEO HongZhuang L shared his insights on fund raising with cryptos and the differences between traditional fund raising and new, crypto embedded fund raising. Topic discussed in this podcast episode:
- Traditional fund raising versus Web 3 crypto fund raising (Platform vs Network)
- NFT Fund raising and opportunities for creators
- Example of NFT utility: NFT in Trade Financing
- Read on about SZO token utility at: https://shuttleone.gitbook.io/step-by...
Watch the full episode of ShuttleCast “Fund raising with cryptocurrencies”:
Fundraising with Cryptocurrencies in the Web3 World, How It’s Different from Traditional Methods
The rapid growth in the development of Web3 applications has opened the doors to a lot of questions, mostly from project creators who are looking for inputs to shape their products and raise funds. In a recent interaction with the crypto community, the CEO and founder of ShuttleOne, HongZhung L acknowledged the rising Web3 tide and its advantages while providing insights into the entire space and value creation opportunity it presents. During the conversation, he explained the evolution of the world wide web, key differences between different generations and how Web3 provides easy and simple ways to raise capital, as long as there is some value on offer to the community. Continue reading to know more.
An Introduction to the Web3 Era
Zhuang explained the key differences between the Web1, Web2 and Web3 applications and how it has paved the way for a new kind of economy that is built around the community, with decentralization as the foundation.
The Web3 applications are a huge leap from the previous generations, with Web1 being a singular interface for consumption of information from static web pages. It was succeeded by Web2, also known as Social Web, which is still relevant today. Enabling social interactions and relying on user generated content, Web2 offered interactivity and support for dynamic multimedia rich content over centralized infrastructure. The Web2 revolution gave birth to some of the social media giants like Facebook (now Meta) and Twitter.
The next iteration of the World Wide Web, Web3 is relatively new and has gained strong adoption in recent times. Also known as the “decentralized web”, Web3 draws its capabilities from blockchain technology, relying on network participants. The Web3 infrastructure does away with centralized platforms and middlemen, allowing everyone to become a stakeholder in the ecosystem.
The Rise of Web3 and its Advantages
The obvious advantages of Web3 that includes decentralization, transparency and ownership of data has encouraged the development of a variety of projects with real-world applications.
Unlike Web2 platforms where the revenues and cash flow from the business is allocated to shareholders, Web3 applications provide a uniform playing field for all network participants who add value to the ecosystem. It involves a direct translation of demand into potential utility and value of the individual participants’ stake which is in the form of tokens.
The present day Web3 ecosystem includes an entire suite of decentralized applications starting with browsers to DeFi and NFT platforms that can be used by anyone from anywhere.
Fundraising in the Web3 Ecosystem
The highly democratized Web3 ecosystem relies heavily on network participation presenting a unique and convenient fundraising opportunity for projects and individuals working in this space.
To explain the process, Zhuang gave an example of Ethereum’s fundraising initiative back in 2014 where it introduced the concept of Initial Coin Offering (ICO) for the first time. Present day Web3 platforms raise funds through token offering by enabling the community to purchase the project’s utility tokens during the initial stages of development or launch. However, he stresses upon the importance of these tokens to have an operational use case in the project for successful fundraising, so that it can create value for the token holders over the long term.
“The token should be purposefully built into the product to create demand. As long as there is a real use of the token in the product, it will increase the demand for the token, in turn, appreciation in its value”
As long as the project has a solid business model, with clear utility of the token and processes like hold and burn in place to increase the token value over time, it will be able to gain the community’s confidence. Increased confidence will translate to more demand for the tokens and a successful fundraise for the project.
By taking ShuttleOne’s $SZO token as an example, Zhuang says that the $SZO plays a vital role in the ecosystem as a utility token that fuels all transactions and seamless interaction between real world assets and users. In addition to playing a crucial role within the ShuttleOne ecosystem, $SZO has a good track record of over one year while the project itself is around 3 years old. The availability of $SZO on multiple DEXs, along with cross chain compatibility and a solid burn and mint mechanism makes it trustworthy and attractive to investors who can rely on the sound mechanics and a solid business plan to drive the token’s value over time.
NFT Fundraising and Opportunities for Creators
The NFTs are digital assets that are similar to cryptocurrencies or utility tokens, except that each NFT is a singular asset that is not divisible. The uniqueness of each NFT makes them valuable in a digital economy as exhibited by blockchain game developers who integrated them into the in-game economy. Further, they also enable tokenization of digital and physical assets and anyone creating a representation of such assets will be able to monetize them across a wider community.
By creating NFTs of various assets, the creators will be able to easily establish and transfer ownership of such assets to a much larger audience than what centralized platforms can provide. The exposure to a wide community over a decentralized ecosystem provides more visibility, helping the creators generate greater demand to increase valuation in an ecosystem with access to more liquidity. As a result, the creators will be able to raise more funds than what conventional platforms can offer, while retaining their autonomy throughout the process.
Zhuang gives an example of how NFTs representing real art can drive more value through tokenization as compared to selling it through an art gallery. In an art gallery, the exposure to an art is limited to the gallery’s client network and footfalls during exhibitions or other special events. However, tokenizing the same art as an NFT and selling it over a NFT marketplace gives more exposure and a higher possibility of sale, without the need for paying commissions or any other fees to the gallery.
Utility of NFTs in Real-world Scenarios
The use cases of NFTs stretch beyond the realm of art to other real-world utilities. In recent times, NFTs have found a place in traditional finance, thanks to their underlying characteristics and innovative applications developed by projects like ShuttleOne. Zhuang offers an insight into his company’s initiative to create a NFT based platform that streamlined the Trade Financing industry.
The solution offered by ShuttleOne involved tokenization of cargo following a thorough verification of the contents, cargo’s value, track record of the borrower and other details. The relevant documents of all consignments that pass the verification step were tokenized as NFTs and made accessible to whitelisted financial institutions over a cross-chain module database.
Institutions willing to issue a loan could access the NFTs listed by ShuttleOne for necessary details and check the actual status of collateralized cargo to issue loans. The seamless, efficient, and transparent system designed by the company has enabled easy accessibility to network-based data for financial institutions who have so far been wary of being nice to each other. By doing so, ShuttleOne has made the entire process of Trade Finacing an easier and hassle free experience.
Multichain NFT Capabilities on ShuttleOne Metachain
While building the NFT based trade financing platform and other products for the clients, Zhuang realized that most NFTs are built on Ethereum protocol, which is affected by scalability issues, network congestion and high transaction costs. It led to businesses looking for alternatives to the Ethereum chain, giving rise to the idea of creating an ecosystem to support multichain or cross chain capable assets, including NFTs. As a result, the ShuttleOne Metachain with multichain capabilities was created.
The Multichain assets are blockchain agnostic cross-chain compatible crypto tokens that can be easily transferred from one chain to another without losing any functionality. Multichain capabilities will erase the boundaries that exist between different blockchains which have effectively turned into silos as each has its own prescribed standards that aren't compatible with another.
Multichain protocol will allow projects to seamlessly utilize the competences of all supported blockchain protocols to suit the requirements through unresticted movement of assets across protocols.
The ShuttleOne Metachain acts as a platform that connects multiple blockchain protocols through a multi-blockchain, two-way metachain smart contract bridge. All transactions across supported protocols are fueled by a universal $SZO token, eliminating the need for multiple protocol tokens to pay transaction fees on each network. It also allows the projects on metachain to tap into the liquidity across all supported protocols and reach a wider community.
By extending support for NFTs on Metachain, ShuttleOne will make multichain NFTs a reality. NFT creators can mint assets using the tools made available by ShuttleOne Metachain to create cross-chain compatible NFTs with enhanced discoverability and compatibility across all supported blockchains and their respective NFT marketplaces. By gaining exposure to a wider community and liquidity, the chances of them securing a fair valuation and greater earnings will be high.
Following support for Multichain NFTs, the ShuttleOne ecosystem is poised to launch plenty of other exciting features soon. Keep an eye out on our announcements to be the first one to know what’s in store.
ShuttleCast is a knowledge sharing podcast show about scaling in Web 3, crypto and how to prepare yourself for the next wave of the internet economy. Whether you are a creator, a developer or just a tech enthusiast, Web 3 will foster the next generation of wealth and innovations that you cannot miss.
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