" class="no-js "lang="en-US"> OpenChat Raises $5.5M in Under 5 Hours via Pioneering Community-Led Decentralized Fundraising Model - Fintech Finance
Saturday, May 25, 2024

OpenChat Raises $5.5M in Under 5 Hours via Pioneering Community-Led Decentralized Fundraising Model

OpenChat, a decentralized community-governed chat app on the world’s fastest general-purpose blockchain, Internet Computer, today announces raising over $5.5 million (1 million ICP) in just 5 hours of its decentralization sale — a first-of-its-kind, community-driven fundraising model. Following the completion of the raise, OpenChat will become a fully functional Decentralized Autonomous Organization (DAO) led by its community of shareholders.

OpenChat’s decentralization sale has reached its maximum commitment goal of 1 million ICP less than a day after its initial kick off. The sale was set to last until March 17, or until the maximum goal was reached.

Decentralization sales allow developers to hand over their dapps to decentralized, token-based governance systems via a Service Nervous System (SNS) — an advanced form of algorithmic DAO developed by the DFINITY Foundation, a nonprofit steward of the Internet Computer.

Unlike other DAOs, which only control smart contract logic, a dapp under the control of an SNS DAO is managed in its entirety. Token holders are responsible for proposing and voting on changes to the dapp, including code updates. When the community accepts a proposal, the SNS executes it autonomously, allowing for seamless updates without interference from any single entity.

This novel approach not only allows services to raise treasury funds for future development but also makes them significantly more democratic and censorship-resistant.

Following the sale, OpenChat’s system will be democratically controlled by the holders of OpenChat’s new governance token, CHAT. The newly raised funds will be held in OpenChat’s DAO treasury, allowing CHAT holders to decide how to best utilize them.

Community-led fundraising initiatives such as OpenChat’s SNS sales are anticipated to become an increasingly important part of the web3 ecosystem, especially in light of VC funding fizzling out. As a knock-on effect of the ongoing crypto winter, Web3 startup funding has decreased by 74% in 2023 compared to the previous year. To remedy the situation, decentralization sales allow web3 developers to largely detach themselves from external funding, the dual benefit of becoming independent and empowering their communities.

The SNS model enables crypto projects to put the power in the hands of their users by effectively allowing them to be not only consumers but also shareholders and directors of any dapp or service. As a result, such SNS-based DAOs can be developed in the best interest of their communities.

“We are immensely excited by this opportunity to empower OpenChat users while simultaneously future-proofing the platform,” said Matt Grogan, co-founder of OpenChat. “The SNS model epitomizes the core blockchain values such as inclusivity, transparency, user-friendliness, diversity, and accessibility. Following the sale, CHAT token holders will be able to govern the platform and make their voices heard when it comes to the future of OpenChat, and this is exactly how the next iteration of the Internet should operate. We’re looking forward to seeing more projects on the Internet Computer blockchain utilizing the SNS DAO.”

OpenChat is an instant-message decentralized application (dapp) that functions like WhatsApp and Signal but runs entirely on the Internet Computer. In addition to becoming the first platform to adopt the SNS model, OpenChat was the first SocialFi network to leverage the Internet Computer’s direct integration with the Bitcoin network — enabling wallet-less peer-to-peer (P2P) BTC payments via instant messages.

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