Why should businesses tokenize communities?

Businesses can build stronger and more intense communities thanks to the community token model, where the community can be rewarded more. The model incentivizes fans to engage and promote the business more than ever because community members have economic & social incentives to help the business succeed. The community will grow not only by its members but also in value.

The token is used as a way to access the community and to give each community its own kind of economy. All transactions and transfers inside the community are done with the community token. Furthermore, if people work for the business, they can be paid out with the community token. The tokens can be seen as an advanced version of membership cards but based on the blockchain.

What are the main benefits for businesses?

• Thanks to the community token model, businesses can build stronger and more intense communities.
• Building a digital economy.
• Access to the skills of a whole community to help grow and improve the business.
• Incentivize fans to engage and promote the business more than ever because community members have economic & social incentives to help the business succeed.
• Raise funds without losing equity
• Flexible funding with multiple funding rounds and direct access to part of the funds.
• The market cap of the tokens gives a good representation of the value that their community is worth.

What are the main benefits for the community?

• Proud token holder and so a member of the community.
• Involvement in the business. Members won't simply support the business.
• Access to special perks, experiences, and more benefits of the community
• Fraud reduction/minimalization compared to traditional crowdfunding.
• Fairer balance of power between members and the business
• More members entering the community can lead to an increase in personal token value owned.
• Creatives can work for the community in exchange for community tokens. For example, website or logo design, (social media) marketing, video or picture creation/editing, etc.

Why does Fundle use crypto and blockchain?

We believe that rewarding the community for the value they’re helping create in the business is very important to stimulate active participation. Community tokens are the perfect tool to create this type of involvement. Especially for early adopters, the value of tokens can grow as more people join the community.

Businesses' considerations for crowdfunding are mainly because of fundraising and community building. With this concept, we can strengthen both aspects by utilizing blockchain technology in this smart way.

By using crypto and blockchain, everybody anywhere around the world can become a member and enjoy the benefits of the community. Furthermore, they are able to earn money by working for the community. The tokens can be bought and sold 24/7 worldwide. Transactions can be done easy and quick. Blockchain also provides a transparent and secure way of doing transactions.

What is the purpose of community tokens for members?

Community tokens are not digital assets. Users buy the tokens to become part of a digital community and to enjoy the benefits of that community.

Participation in crowdfunding campaigns are done because people want to have the product or want to support the business. Relatable to reward-based crowdfunding. All transactions conducted within the community are done to empower the community and not as an investment in a business.

What is blockchain?

A blockchain is, in simple terms, a chain of blocks that contain specific information. It is a technology that can revolutionize how we exchange value, transfer ownership, and verify transactions.

It can be described as a digital ledger of transactions that works in a decentralized way powered by a network of computers. The information recorded on the blockchain is immutable. The system makes it difficult or impossible to change or hack the data.

What are crypto currrencies?

Cryptos work on the blockchain and are digital currency. It uses cryptography to secure transactions. The transactions are recorded on the blockchain.

It solves problems that traditional currencies have by giving the power and responsibility back to where it belongs, the currency holders' hands. Banks and so transaction fees are almost eliminated. Money transactions are cheaper, cost-efficient, faster, and safer than ordinary electronic transactions. Furthermore, decentralized systems do not collapse at a single point of failure. Crypto allows the world to shift to a global, trustless, and open new digital economy.

What are smart contracts?

Smart contracts are immutable agreements that are recorded on the blockchain, containing specific logical actions comparable to a "normal" contract but works automatically.

The contracts run when predetermined conditions are met. Fundle uses them to automate executions.

What are wallets?

A wallet is an address (location) where a user stores crypto coins or tokens and from where coins are sent and received. The address is an encrypted key required for the holder to verify a transaction. Wallets allow users to perform digital payments quickly and easily.

How does the platform economy of Fundle work?

The Fundle platform uses of 2 types of tokens.

The $FND currency is the platform currency and is just a regular crypto token such as Ethereum or Bitcoin, which can be transferred from one account to another. The coin can also be traded outside the Fundle platform.

Community tokens are bonded to the $FND currency. Community tokens are not a regular token and cannot be traded between accounts. The tokens belong to a particular community. This type is very relatable to a NFT (Non-Fungible Tokens). The token defines digital ownership.

How and where can community tokens be bought?

Community tokens are bonded to $FND. Purchases of a community token are facilitated by a direct or underlying purchase of $FND traded to the community token. Users of Fundle can buy community tokens via our platform. When community tokens are bought, they are minted and sent to the buyer based on the current price and supply rate.

How and where can community tokens be sold?

When community tokens are sold, they are burned, and the current amount value in $FND is sent to the seller based on the current price and supply rate. After that, the $FND can be kept or transferred directly or indirectly to other currencies or fiat (USD or EUR)

What does this mean for the Fundle crypto and community tokens?

Since the coins are bonded, the demand and value of the Fundle crypto can increase when there are more communities on the platform. $FND is the base pair of all community tokens. But also, the ask for community tokens can increase the demand and so the value of the $FND crypto.

Which factors influence the price of community tokens?

The price of community tokens will change over time. The variables that influence the price are the token's supply, the current price of $FND, and the holding patterns of community token holders.

If only a few community tokens exist, less $FND is necessary to mint a new community token. Contrary, if more community tokens already exist, more $FND is needed to mint a new community token.

How does the crowdfunding model work?

The crowdfunding mechanism is designed to release the funds with democratic decision-making. Compared to other crowdfunding models, the funds are released stepwise instead of all at once.

The money is collected in the business wallet. The business team can obtain funds from this wallet by creating a request. In this request, the business specifies how much money they need and for what (For ex. 5000 USD for building the prototype). Backers can vote about a request. They can object if they do not agree with the process or when the request is not elaborated enough. If the majority makes an objection, the team needs to set up a new, better request. When backers completely lose trust, they can ask for a refund.

This model involves backers and lets them think actively about the business. Furthermore, it gives the business direct access to part of the funds. Moreover, the business is forced to think carefully about where the money is spent since these costs need to be indicated when setting up checkpoints. These checkpoints display the roadmap and achievements that need to be reached.

How does the mechanism behind community tokens work?

The mechanism behind community tokens works as a token bonding curve (TBC). Simply explained, the mechanism is based on the relationship between the supply of the community token and its price. It acts as an underlying mechanism for an AMM (automated market maker) to facilitate buying and selling.

The influence of buying and selling the community tokens works as follows:

Buy $community -> $community minted -> increase in $community supply -> increase in price $community.
Sell $community -> $community burned -> decrease in $community supply -> decrease in price $community

So, the price of the tokens increases when more people join the community since the community will be worth more.

Why is a Token Bonding Curve (TBC) mechanism used?

The advantages of using this mechanism are that it ensures organic growth, enables continuous liquidity, and incentivizes long-term commitment. It also discourages pumps and dumps and gives predictability regarding price. Users can easily interact with this mechanism without complex listing procedures or intermediaries governing the purchase.