IOTA Makes Plans To Crowdfund Tangle Projects With Smart Contracts

Ever since the IOTA development team started working on Tangle, it has been one of the most talked about projects in the crypto space. Well, Tangle is about to become much more popular as IOTA makes plans to fund Tangle projects via ICOs. However, due to regulatory scrutiny, it may be a little more complicated than it should. The team behind IOTA has found a way to fund Tangle projects without breaking any security laws. This can be done by removing the tokenization that is usually attached to initial coin offerings and using the native IOTA tokens (MIOTA) as a basis for the crowd funding.

How IOTA Intends To Crowdfund Tangle Projects

As published by medium.com, IOTA’s TomTom explained how the team intends to fund projects on Tangle using ICOs. He said that it is important to fund Tangle projects. In his words:

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“As technology continues to evolve, more use cases are born as well. Everyday new applications of technology are discovered. Since IOTA Foundation will be funding most of the projects on Tangle, we saw a need to try out other funding options for the numerous projects we intend to build on Tangle (IOTA).”

According to TomTom, there is an ever growing interest to build on Tangle and Abra. However, the lot of fake ICOs that occurred between 2017 and now have tarnished the entire initial coin offering process. For this reason, the IOTA team has decided to create a hybrid between Kickstarter and ICO. This hybrid will be known as IOTA-ISO. For the system to work, the IOTA (MIOTA) tokens will serve as fuel. This will prevent the problems associated with tokenizating that typically draws the attention of regulators.

Regarding how the process will work, TomTom said:

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“The companies and people who are interested in building on the platform will have to commit to a using the IOTA native token as fuel on building on Tangle. They will use the native token for any future service that requires value. We want funders to use only the IOTA token to fund the system so that we can control fund release and secure the system. Funders can participate in funding rounds to buy future services.”

The entire process will be monitored or controlled via smart contracts. Project participants and owners will open IOTA wallets that they can use to send and receive MIOTA tokens. After that, they will have to create receipt wallets that will stand as proof of rights depending on the project description.

TomTom explained:

“We were able to set up smart contracts that house these receipts. The receipts are transferred from one wallet to the other after a specified amount is received as payment. We will not interrupt in these transactions. We will only take a fee for facilitating them through our technology.”

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IOTA Price Analysis

At the time of writing, IOTA was trading at $0.510059. The means it is trading in green against the USD with a 3.44% rise in price. However, it is trading in red against Bitcoin as it is down by 2.75%. The trading volume over a 24 hour period is $34,751,482 and the market capitalization is $1,417,723,957. The next few days of trading will determine if the price action will change.


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