Crypto Crowdfunding: Financing the Future

Crowdfunding is a process that raises funds from a large number of people through various platforms.

What is crowdfunding?

Crowdfunding is a process through which money can be raised to fund both projects and businesses. Crowdfunding gives fundraisers the opportunity to raise money among a large number of people through various platforms, usually online.

That is, crowdfunding is a technologically equipped financial service that covers a wide range of ways in which money can be raised. In doing so, a large number of capital providers use various online crowdfunding platforms that act as intermediaries, and instead of raising funding from traditional sources such as banks, mutual funds or business angels, funds are raised through “crowd”.

The benefits that crowdfunders receive in return for their investment or money invested in these projects are determined by which crowdfunding model is used to raise funds in the first place. They may receive tangible rewards or intangible rewards as compensation for their financial risk.

However, in many cases, the funds raised are mostly given as a donation. Keep in mind that there is investment crowdfunding as well as non-investment crowdfunding. This distinction shows the difference between when sponsors act as investors seeking economic profit and when sponsors support a charitable project or receive a reward in non-monetary form.

Depending on the rights of the funders in a particular project, crowdfunding can be classified into different models. Within the investment model, there is debt-based crowdfunding and equity-based crowdfunding. In the non-investment model, there is reward-based crowdfunding and donation-based crowdfunding.