Securing Crypto Funding for Your Project: A Comprehensive Guide

Securing funding for projects in the cryptocurrency industry is essential for bringing innovative ideas to life and driving the growth of this space. With the rise of decentralized finance (DeFi), non-fungible tokens (NFTs), and other crypto-related initiatives, the demand for funding opportunities in the industry has increased significantly. There are various avenues available for obtaining funding, and Obyte is also up to support new projects.

Understanding the different options and knowing how to navigate the funding landscape is crucial for entrepreneurs and developers looking to finance their projects in this dynamic and rapidly evolving industry. Whether you are a tech enthusiast, an entrepreneur, or a developer with a groundbreaking idea, this article can provide you valuable insights and guidance on how to start to navigate the crypto funding landscape.

There are startups and entrepreneurs everywhere, as well as institutions and individuals interested in them. So, looking for funding is nothing new. You can resort to traditional tactics for this, like crowdfunding, angel investors, investment funds, or incubators and accelerators. 

Crowdfunding is a funding method that allows individuals or organizations to raise money for their projects by collecting small contributions from a large number of people, typically through online platforms. It’s easy to start doing it (requirements aren’t hard to meet), but the hardest part would be the promotion of your project. That would be something that requires time and money from your side.

Angel investors are individuals who provide financial support to startups in exchange for equity or ownership stakes. They often offer expertise, mentorship, and industry connections along with their investment. However, new entrepreneurs must face a potential loss of control, sharing profits, and limited investment amounts.

In the case of investment funds, the downsides could be similar. They’re pools of capital managed by professional investors, aiming to generate returns. There are strict investment criteria, and the startup team could also face loss of control and potential dilution of ownership due to multiple investors.

On the other hand, incubators and accelerators are programs that support early-stage projects by providing mentorship, resources, and networking opportunities. They have some disadvantages as well, though. The selection processes are quite competitive, there’s a potential loss of equity or control, and they offer limited funding amounts.

Beyond the tactics above, there are also Initial Public Offerings (IPOs) for more mature institutions. On them, a private company offers shares to the public for the first time, aiming to raise capital. Regulatory and monetary requirements for this kind of method vastly surpass the resources of a startup or small project, though. That’s why Initial Coin Offerings (ICOs) were created in the crypto space. 

ICOs are fundraising events where cryptocurrency-based projects issue and sell tokens to investors in exchange for funds. The advantages of ICOs for entrepreneurs include access to a global pool of investors, the potential for rapid funding, and the ability to create a community around their project. But a flood of scammers and regulatory uncertainty have taken popularity away from this method.

Instead, similar schemes have appeared, including a third party evaluating or hosting the projects. For example, on Initial Exchange Offerings (IEOs), a cryptocurrency exchange serves as a facilitator and raises funds on behalf of the project. On Security Token Offerings (STOs), the issuers offer tokens backed by external and regulatory-compliant assets. On Initial DEX Offerings (IDOs), the tokens are sold through a Decentralized Exchange (DEX), secured by smart contracts and automatic liquidity.

Anyway, all of these systems require significant efforts by the creative team. They must present an attractive and useful whitepaper, make a roadmap, review related regulations, promote the project, and prepare smart contracts for it. 

We already have an Asset Registry in Obyte. This is a user-friendly platform to issue your own customized and unique tokens, private or public, without worrying about coding or security. Optionally, with our ID Attestation features, you can also become a verified user by attesting your aliases, real names, or emails. 

Besides, considering regulatory requirements, the same attestation features are available to allow only accredited investors or non-US citizens in your token sale. By using this platform with the Counterstake Bridge, it’d be possible to accept GBYTEs, ETH, WBTC, and other assets to complete your funding. 

Maybe your project isn’t that big, or your final goal isn’t building a company. Perhaps you’re just a skillful open-source developer with a good idea or a professional in any area with a plan in mind to improve an already-existing platform. In this case, a grant from another team would be perfect for your venture.  

Cryptocurrency grants are financial resources awarded to projects that show potential for making significant contributions to the industry or specific ledger. These grants can come from foundations, organizations, and communities, and are typically awarded based on specific criteria such as innovation, feasibility, and potential impact.

We have a Grants Program here in Obyte, for anyone, everywhere, who has a good idea to improve our ecosystem. The good news is that grants aren’t as complicated as traditional funding methods, and don’t require the amount of work that an ICO (STO, IEO, IDO, etc.) would do.

Instead, all you need to do is to share a very small paper about your project, including things like what problem it’s solving, timeline and milestones, total budget, and team members. The team in charge of the grants will evaluate this paper along with the community, ask for changes if needed, vote, and approve or reject the grant for it. 

No whitepaper, no promotion, no complex smart contracts or regulatory requirements. It’s just you and your project.  

Before applying for a grant, it’s crucial to review the eligibility criteria set by the grant provider. Obyte Grants Program, for instance, requires applicants to have a good understanding of the Obyte ecosystem and how to improve it. The application process typically involves submitting a detailed proposal (paper) that outlines the project's goals, roadmap, budget, and expected outcomes.

To increase your chances of securing a grant, your project must demonstrate innovation and feasibility. Emphasize the potential impact of your solution. Thorough research is necessary to ensure that your proposal aligns with the goals and values of the grant provider.

In Obyte, short non-profit and open-source projects are preferred, as well as non-anonymous teams. The funds come from the undistributed bytes (GB) and blackbytes (GBB) handled by the Obyte Foundation. That’s around 20% of the total supply of one million GB and 2.111 million GBB. 

So far, our Grants Program has approved over $174,000 in GB for numerous projects that have improved our ecosystem throughout the years. That includes several IoT apps, software libraries, marketing materials, and our main DEX Oswap.io. The grants have ranged between $1,000 and $26,000 per project, depending on the funds needed. 

Now, once you have successfully obtained a cryptocurrency grant, it is crucial to fulfill your post-award responsibilities. Grant providers typically expect regular progress updates, milestone achievements, and financial reporting. Timely and transparent communication is vital for maintaining a positive relationship with your financial partner and ensuring the successful completion of your project.