Coinsence Crypto Funding Experiment in Tunisia.
Can we imagine a world where diverse locally engaged communities and can better work together on common challenges? Where these communities can function without national borders, organizational and financial constraints?
We sure can! With today’s digital technology and especially since blockchain, any community such as companies, organizations or individuals can easily issue their own currencies and can collectively control transaction and share resources and created value. By introducing new decentral collaboration forms and embracing new alternative governance, financial and economic models, these communities will be able to take better decisions in terms of social and environmental impact, boost innovation faster and create higher impact.
With the solutions we have in our hands today, we can experiment with complete new models in a decentral way without the need to trust any middlemen and create a culture of open collaboration, trust and sharing that are the basis for human interaction and prosperity.
When it comes to implementation of disruptive and innovative solutions, most projects face a completely different reality. Firstly, they need to address the questions that arise when it comes to bridging the gap between the current status quo and the vision of how a better world could look like. Which problems need to be addressed? How can target groups be identified, and a diverse set of stakeholders such as social entrepreneurs or young innovators be reached and engaged? What is the motivation of the different parties involved? How can new projects be supported? How can contributors be activated without having the network effect when starting and without being able to create incentives or short terms benefits for early adopters? Which partners can engage in the ecosystem design and how can experimenting and iterating with them look like? How much technological understanding, economical expertise and social awareness is needed for community members and partners to see the potential of decentral organizations and token-based exchange instruments as an effective transformation vehicle towards a free, sustainable, equitable and resilient society?
At the end of 2019, Coinsence received the fund ‘Ethereum Crypto Funding’ from UNICEF Innovation Fund to create DAOs (Decentralised Autonomous Organizations) and test them by engaging communities in the decision making related to how to distribute funds. We cooperated with diverse stakeholders from impact networks, universities, innovation hubs and hackathons on different approaches to this and made a public call for project submissions and participation in the voting. The result was 100 projects submitted and 380 participants who voted for the allocation of Ethereum distribution to the projects.
With the help of the tests performed, we were able to identify a range of challenges that arise when involving communities in decision making and supporting projects using crypto funding. From these, we identified the following key questions we need to ask when initiating an active and impactful decentral network:
1- What is the value of the offered crypto currency?
As most people are not used to deal with crypto, many might be sceptic or confused when offered funding in crypto. Especially in countries with no official ways to convert crypto into local currencies, it is necessary to engage local crypto investors or business partners who can provide goods and services in exchange of crypto currencies. This helps to build confidence in the offered token. The benefits of collecting and using ETH must be very clear before starting any campaign to engage partners and projects.
2- What is the goal and target community when offering crypto funding?
In order to start mobilizing partners and reach the right community members, it is essential to start by clearly defining the challenges that we intent to address with the target project. Based on this starting point, the relevant partners can get involved and the criteria for the support of projects (maturity, impact,…) and for participation of voters (experience, expertise, reputation…) can be developed in an iterative process. In addition, communication and community engagement plans can be optimized.
3- Who are the partners and multiplicators that can help reach the target groups?
The effort to promote a crypto funding campaign is quite high, especially when targeting selected project types and voting groups. Having the right partners like associations, incubation hubs and established networks can help reaching and mobilizing the right groups. Here, the selection of right partners and the creation of the suitable incentive model for multiplicators and supporters are crucial to ensure an effective campaign.
Our tests, collaborations and results have convinced us that cryptocurrency as an alternative funding instrument can have great benefits to communities. The ability to ensure trust and transparency, to connect transactions with smart contracts and to build decentral governance frameworks creates higher flexibility and freedom to support international projects. This can not only be achieved with low bureaucracy, but it is also possible to target also micro projects and initiatives with no formal legal entity and bank accounts. This is a great advantage when it comes to supporting grassroot initiatives and innovative ideas. In order to build an active ecosystem with engaged communities and leverage synergies using previous learning, more iterations with trusted partners over longer amounts of time are still needed. In a world full of potential use cases, finding the best ankers to start designing and testing DAO’s should have the first priority before building tools and models that most of the people are still struggling to understand.