Aug 1, 2020
When does it (not) make sense to decentralize a project incubator with an Ethereum token?
Ethereum is a platform which enables decentralized projects to publish their products, product components, or to simply make the use of any other existing contracts. The power of such networks (and contracts) comes from the network security which enables the user to avoid the need to trust.
Ethereum is already used as the project incubator by allowing the projects to easily issue a token benefiting from the market-cap and liquidity. It is similar to a stock-market by allowing a free-trade of tokens. Therefore, issuing a token like XIO, which has no defined token functions, simply translates everything that Ethereum already does. Other than raising the funds (and possibly dumping the value once enough money is drained), having a project incubator token has no defined meaning or a purpose on Ethereum.
Unfortunately, the only function of such project becomes the control of certain behaviours by the means of manipulation and the gate-keeping. To test this, I will try to list my project incubator idea onto XIO’s network without trolling. The expected result is that it will be ignored, ridiculed, and perhaps censored. Although it may cast some bad light onto the incubator project I am proposing, it will be the great way to learn more while testing the reality of the situation.
The project incubator has to offer something that Ethereum is not offering, by programming it onto Ethereum network. The simplest high-level definition of a project incubator implies (source):
- Help with business basics
- Networking opportunities
- Marketing assistance
- High-speed Internet access
- Accounting/financial management assistance
- Access to bank loans, loan funds and guarantee programs
- Help with presentation skills
- Connections to higher education resources
- Connections to strategic partners
- Access to angel investors or venture capital
- Comprehensive business training programs
- Advisory boards and mentors
- Management team identification
- Help with business etiquette
- Technology commercialization assistance
- Help with regulatory compliance
- Intellectual property management and legal counsel
The points that we can take from this high-level definition while developing a token are :
- Networking opportunities
- Project portfolio and management
- Access to a decentralized treasury (if any)
- Connections to higher education resources
- Connections to strategic partners
- Access to angel investors or venture capital
- Management team identification
- Intellectual property management
- Access to token by the means of creating a Web3 interface (back and front-end)
- Access to a decentralized market and a token trade
All of these mentioned points can be decentralized by programming a token, while only the points which are formatted as italic do not exist as the feature on the Ethereum block-chain.
The only problem, at the moment, is that adding and re-adjusting the information on the block-chain costs a lot of money. So, for example, it may cost around $5 USD just to add/update general data regarding one single company on the block-chain. Now, to start-off with the project, we would need to add at least 1000 of companies to a block-chain database. The only solution to this problem is to create a general token on the main-network, and simply do all the initial work (coding, adding data etc) on the Ropsten (test) network while revealing the code to the public. The main-network release updates to a decentralized system are done only when it makes sense.
Unfortunately, this means that there has to be a centralized authority, independent of the community, and that it needs to bridge the gap between the real-world and the block-chain by selling/offering the services to a token. This is also something that the mentioned XIO token is trying to do while getting the community involved. However, it does nothing that cannot be done using the web3 interface to Ethereum without a necessity to create a token, other than fund-raising and dumping.
