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The advantages of INO as blockchain project fundraising method

Companies use different fundraising methods to finance various projects. Conventional companies might consider going public, by organizing an initial public offering (IPO) once they have turned enough profits, in order to secure funds for their innovation and expansion activities.

In the cryptocurrency industry, meanwhile, there is a highly popular project fundraising method called initial coin offering or ICO. It is when a new cryptocurrency is being launched to the public and requires some funding. The ICO can also be used for new decentralization projects.

Yet, many observers and practitioners have warned investors against partaking in the “highly risky” business of the ICO. This is because the crypto market still remains unregulated, therefore making room for various speculative activities which would otherwise be punished in the conventional market to happen.

For instance, what is called the pump-and-dump practice, whereby speculants abnormally inflate the value of a cryptocurrency, prompting so many investors to buy and amassing lots of profits, before they will just, for whatever reason, release these assets, thus causing the assets’ value to crash.

A lot of times, investors who have purchased coins in the ICO are left empty-handed by the developers who just abandon their projects, delivering nothing. Once again, these unscrupulous people can get away with what they are doing because the ICO is unregulated.

This is why, various decentralization solution developers have enthusiastically touted an alternative fundraising method suitable for peer-to-peer (P2P) networks called the initial node offering or INO. The INO is also unregulated but the nature of how it is being conducted can actually protect investors from various risks mentioned above.

Yet, the INO is not as popular as the ICO, so in this article we would like to familiarize people with the concept, in several different parts:

  • How the INO works,
  • Why it is more ethical than the ICO,
  • The benefits of joining an INO for the investors.

How the INO works

Investors who join the INO of a decentralization project buy a node as a non-fungible token (NFT) in the blockchain. The money gained by the developer from the sales of the nodes is being used to fund the project. Through this mechanism, the INO investors will by default own a node in the new decentralized platform, thus also gaining control over the system. With this, they have higher bargaining power, protecting them from possible asset-dumping and project failures along the way.

Why the INO is more ethical than the ICO

As already mentioned in the previous section, the INO involves people to actively run the network, create value and strengthen the system. As the investors who have joined the INO are also running the nodes, they also get a “front row seat” to the system’s development, thus gaining more transparency and assurance that they have invested in a project which has value for money.

The benefits of joining an INO for the investors

People who buy the Genesis Block Accounts in the INO can run their nodes from home using a small hardware device, allowing them to play a consistent role in the decision making for the implementation of functionalities of DecBC, by choosing what enhancement or functionality their purchase will finance. In other words, their preferred functionalities will be prioritized during the development process.

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