The blockchain and crypto industries are forever changing, particularly in the ways that individual projects operate. Few aspects of the industry have seen as much change over the years as the ways in which projects launch their ideas. At a certain point in time, Initial Coin Offerings were the go-to way to raise funds within the industry. However, multiple fraudulent ICOs and a general disorganized process have seen them falling out of favor with the public. Now, new ways of fundraising are taking center stage and some are addressing long-standing industry issues.
History was recently made as MELD launched the first-ever Initial Stake Pool Offering (ISPO) on July 1, 2021. This represents not just a new way to raise funds for new projects but a recalibration of the best practices within the industry itself as well as a whole new world of benefits for consumers.
What is an ISPO?
An ISPO, or Initial Stake Pool Offering, refers to a situation in which interested parties participate in an upcoming project not by buying a token as is done in the case of an ICOs and STOs but involves them staking their ADA into a pool with the expectation of receiving reward later in time.
This ISPO that was put forward by MELD was the first of its kind in the industry and saw resounding success immediately. In the first 24 hours, the first pool was filled up and roughly $90 million of ADA tokens were staked. After five days of the ISPO launch, four pools were filled up with almost $200,000,000 in ADA tokens and showed no signs of stopping.
This new token launch model is very innovative in that it doesn’t ask investors to take a risk on their initial capital but instead, takes their initial capital and makes it productive, which mitigates the risk by not having to spend any of their initial capital. This ISPO took place on the Cardano blockchain but MELD intends to service the entire crypto community moving forward.
How MELD is Changing the Industry
MELD essentially works as a cryptocurrency/fiat lending platform. When investors that hold cryptocurrency need fiat currency, they are forced to sell their tokens, pay a capital gains tax, as well as exiting valuable markets and giving up tokens that would have made them money in the long run.
MELD combats this by offering its users the opportunity to borrow fiat currency using their cryptocurrency as collateral. This means that those who have the need for fiat currency can access loans while using their cryptocurrency as collateral without having to liquidate and lose their position.
MELD is non-custodial and decentralized in nature and as cryptocurrency is on track to surpass the gold market in the next few years, this type of service will be greatly needed. MELD also leverages DeFi technology which has become immensely popular in the last few years, especially for lending, as the legal fees for lending and borrowing can be executed through a smart contract deployed on the Cardano blockchain, only having to pay a transaction fee.
In many ways, what MELD is doing is contributing directly to the future of finance as it is innovating new, more efficient and secure financial services that can be accessed by anyone in the world. MELD has an overarching goal of banking the unbanked and their position in the industry, their advisors, and new partnerships coming on board position MELD to be a core contributor to this effort. Be sure to stay up to date to see how MELD transitions out of their ISPO into a full blown DeFi protocol come Q4, 2021.