Crowdfunding has played an enormous and important role in the growth of the cryptocurrency market. Since the first-ever token sale by Mastercoin in 2013 and Ethereum's $18.3 million ICO in 2014, crowdfunding has paved the way for new protocols and technologies. Without crowdfunding, likely, the blockchain space would not be at the level that is at today. Developers wouldn't be able to develop the blockchain technologies that we now take for granted. This is due to blockchain being an emerging technology. Institutional investors were skeptical and kept their distance in the early stages. Instead, regular everyday people stepped up and filled the positions that were once reserved only for Venture Capitalists and Angel Investors. However, whilst crowdfunding has helped to develop innovative projects in the blockchain space, fraudsters have also stolen funds from unsuspecting investors. This is why an escrow-like system is needed to prevent bad actors from defrauding investors in future token sales. SeedOn Brings Smart Contract Technology to Equity Crowdfunding is a blockchain-based equity crowdfunding platform that uses a smart contract escrow model to ensure that crowdfunding campaigns are completely transparent. SeedOn As part of their escrow system, the platform launched its SEON token on three crypto exchanges. The SEON token is available on Digifinex, BitMart, and . PancakeSwap The SEON token works as a traceable and trackable medium of transfer for funds raised via token sales. SeedOn’s token sale comes after its successful public token sale where over 120 million SEON tokens ($1.2m) were sold in less than five hours in December 2021. Crowdfunding Scams are a Common Occurrence LLC and its CEO Larry Brodman raised more than $9 million in unregistered securities between 2016 and 2020. Property Income Investors Most of these funds were raised from crowdfunding platforms and over $2 million went into private bank accounts. Fraudulent fundraising campaigns like this have become too common on crowdfunding platforms. This negatively impacts the reputation of the entire crowdfunding industry. The inability of crowdfunding platforms to effectively screen problematic campaigns hurts investors as well as legitimate project owners who depend on crowdfunding campaigns. SeedOn tackles the issue of transparency in crowdfunding by using smart contract technology. These smart contracts will only release raised funds in stages, based on the development milestones reached by a project. This prevents malicious project owners from "rug-pulling" or running off with investors' funds without developing the project that was crowdfunded. Smart contracts also provide much-needed transparency as investors can see exactly where their money is going and how it's being used. This smart contract deployment is based on the escrow model, where a third party receives and disburses funds, based on conditions agreed upon by the transacting parties. How Escrow Works - An Off-Chain Example A non-blockchain example of escrow is Alibaba's escrow payment method. Retailers use the escrow system to purchase goods from a manufacturer, but instead of paying the manufacturer directly, the funds are held by the escrow service. The manufacturer then prepares and ships the product to the retailer. If the goods are delivered and they meet the standards set by the escrow agreement, the funds are released to the manufacturer. If the retailer does not receive the goods, receives the wrong products or the products don't meet the quality standards set in the agreement, the funds are returned to the retailer. SeedOn's smart contracts bring this escrow system into the blockchain for crowdfunding platforms. Their system also includes a traceable native token that is used to protect investors from fraudulent activity and return the funds to investors if necessary. SeedOn also uses artificial intelligence (AI) to audit projects before they're listed on crowdfunding platforms. Human due diligence is also used as an additional screening measure to establish the value of a project. All of these systems work to add an additional layer of security to fundraising platforms. This protects the average investors from malicious actors in the crypto space. SeedOn Is Building A Crowdfunding Platform Powered By Smart Contracts SeedOn is developing a next-generation platform for equity crowdfunding. Using their smart contract escrow system, this platform aims to provide increased transparency for investors. As mentioned earlier, a project's funds will be released in stages to prevent malicious founders from rug-pulling the crowdfunded equity. Projects on the platform can only access the raised funds based on completing specific milestones. The SEON token will be used on the platform to make all transactions traceable and transparent via the blockchain which functions as a public ledger. Everyone will be able to see where the funds are moved to, how they're spent, and who is spending the funds by viewing the addresses associated with the transactions. The SEON token was launched on February 15th via Pancakeswap, Digifinex, and BitMart.
