Bitcoin
steem-engine
Consumer Token Offering (CTO)
lhorgic
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2024-07-13 23:23:21
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Hi friends! how are you enjoying the weekend? Welcome to my blog, it's super good to be back in your faces too. I trust you got value from my last post. I bring to you another value packed content one that I believe you would find interesting as usual. In my last post, we explored the concept "Apeing in crypto", you can check out my blog to read through if you haven't.
Today, we would be looking at **Consumer Token Offering** in the crypto world... it's actually a topic I stumble upon but then it caught my interest, I had to take a deeper look to see what it's about and of course I was able to gather the things am about to share about this concept.
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The crypto and blockchain space have witnessed different fundraising models some of which proved to be effective while some other was discovered to be another means of scamming people of their hard earned income. New project have used fund raising models like ICO to fund their project. ICO's were common in 2017/18.
This fund raising models gave birth to projects like Ethereum, Filecoin and a host of others, I mean it made the process quite easy not until some malicious folks took advantage of this model to scam.investors of their hard earned money.
In fact, SEC considers ICO as an highly risky and illegal activity. Countries around the world have also banned this fund raising model because of the havoc it caused.
Well the deficiency and flaws seen with ICO gave birth to STO, another fund raising model which is still being practiced.
It could be seen as an improvement over the former model. It is legal and approved in most part of the world. It deals with security token that are backed and registered by SEC. So even when things go wrong, investors share can still be claimed.
However STO also has some limitations one of which is the restriction it places on the kind of investors that can participate. For every problem, there is always a solution, the loop holes spotted in STO gave birth to what we would be discussing today. So realy is CTO? Let's get in guys!
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CTO is the latest funding model for Blockchain startups and of course we have to give Brooklyn Project consortium a thumbs up for developing this model. CTO involves the creation of consumers token which grants consumers access to certain goods and services. You can refer to this model as a crowed funding model because it gives room for all and sundry.
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One fascinating thing about this model is that it doesn't need any form of registration and permission from regulatory bodies because it token is not actually used for generating passive income. You hardly find them tradable on exchange where passive profits can be derived from it.
In a more simpler form, you could picture this fund raising models as some kind of pre-order. You know how you order for things in advance so that you can eventually have that thing when it shows up. The pre-order things gives you right and access to the service or goods in question.
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It's simple, a company come up with it plans to conduct a CTO having every fundamental things in place i.e whitepaper, roadmaps, team, goals product and product/service details etc.
It then proceed to create a CTO website where investors can be part. Tokens are created afterward and distributed in line with the way it has been outlined in the project's whitepaper.
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Once these token have been successfully sold to these folks, the money raised will be use to build and get the service and product ready for consumption. This is when token holders themselves can now use the token with them to get these service or even staked for some additional benefit as deem for by the project developers.
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At this point I know one of the many questions on your mind would be "is Utility token the same as Consumer token?" Well the answer is **No** even though they share some relatable similarities, they still have some striking differences which distinguishes them.
Do not forget that I said, consumer tokens are not designed for passive income, neither can they be traded on exchanges for profit.
Utility token on the other hand can earn you profit, it has the inherent ability to rise in value and can also be traded on exchanges. Consumer token is not subject to Volatility, it can't rise in value
A very good example of CTO crypto project includes CIVIL (CVL) and FOAM. Civil is a journalism network that distributes CVL token to newsreaders and lovers while FOAM is GPS related project.
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I believe by now we understand what CTO is and it positive impact in the crypto space. It aims to create a safe and fair fund raising model by building on the flaws and inefficiencies of the other old models. It's still in it infancy state and haven't seen massive adoption but it should with time.
I trust you've gotten so much from this piece. As my usual custom is, I would always encourage that you DYOR to be sure of every financial step you would want to take as I won't be liable for any form of loss encountered by you.
Feel free to share with me your thoughts in the comment section. Thanks for your time once again. Gracias!
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**Disclaimer: This post is made as an education and not investment advice. Digital asset prices are subject to change. All forms of crypto investment have a high risk. I am not a financial advisor, before jumping to any conclusions in this matter please do your own research and consult a financial advisor.**
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Regards
@lhorgic♥️
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