Crypto’s broken promise back on track with THEIA

Back in the early days of Bitcoin & Ethereum, the words above were an indisputable principle of this new era of technological innovation. These protocols enabled anyone to participate inside a completely open system, whether it was mining bitcoin on your laptop or participating in the first ICO.

Here we are in 2022, and it’s ironic how we have returned full circle to the very same legacy systems we were claiming to be better than all those years ago. Nearly all the new projects in the space rely on traditional VC (Venture Capital) money to get off the ground. We’ve returned to the centralized, concentrated top-down system to fund their innovations whilst excluding all previous market participants.

It seems like their industry has been blinded by billions of dollars and chose to forget why it was created in the first place.

Is the VC model really the best Web 3/Crypto has to offer?

One core theme connects all the models of fundraising:

• Founders get paid in full & upfront (Pixelmon), often before even building a working product.

• This means there is a complete misalignment of incentives between founders and investors.

• No wonder the ecosystem has flocked back to the VC model, where at least there is a strong layer of trust between the founders and Investors.

THEIA was created out of frustration with this major market failure and complete disregard for the original principles that the crypto industry was built upon. We are the only protocol that enables projects to raise capital in a permissionless & community lead manner whilst ensuring security for investors on a mathematical basis.

What does THEIA have to offer?

Their protocol aligns the incentives between founders and investors whilst being open, accessible, decentralized, and owned by the community.

The initial promise of crypto was the power it could give an individual. And this promise was broken. The platform is here to restore order from chaos and disrupt fundraising as an industry both in crypto/Web 3 and the greater world.

Their instrument guarantees liquidity to investors via an immutable mathematical formula. This instrument can be traded directly with the smart contract without the need for a counterparty or third-party liquidity providers.

This means the value and the market cap of a project on THEIA are determined based on the size of the liquidity or, in other words, the amount of money invested into a project. Meaning that it is a better proxy for real value than Uniswap’s price algorithm, which has no direct correlation between liquidity and market cap, which in turn leads to the plethora of rug pulls we experience in this space.

How does the system works?

From the lens of incentives, their system is designed for founders to receive only a minority of funds up-front, locking up the majority in a liquidity pool for investors. If the founders want to receive the majority of the funds, they must prove that they create value for their investors by building their product.

Once an investor decides that the project has lived up to its promise, the investor can convert their financial instrument (which is representative of the said project) into the native asset of the project.

Only after the investor has chosen to convert does the project receive most of the capital locked up in the liquidity pool, representing the investor’s stake. Alternatively, if an investor does not feel the project has lived up to its promise, they can sell their financial instrument back to the smart contract and perhaps even make a profit at that.

This means that founders and creators are financially incentivized to deliver a truly good product that investors feel confident enough to convert their financial instrument into. This is how THEIA aligns the incentives between founders and investors on the mathematical level.

Ending note

However, mathematics alone does not guarantee trust, whereas reputation can. In today’s increasingly transparent and socially connected world, reputation has become the only true measuring stick of a person’s skills and character inside the digital world.

Reputation is hard & time-consuming to build, but it can be lost quickly and easily. THEIA leverages this human behavior to create a completely decentralized due-diligence mechanism that relies on the community.

The combination of mathematical security that investors & communities can rely on together with their decentralized due diligence system facilitated by markets enables THEIA to truly be the platform where innovation can both nurture and flourish.

THEIA is the solution to crypto’s promise to the world that was ultimately broken.

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