Journalism startup Civil is pulling the plug on its much-hyped Initial Coin Offering after it met only 13 percent of its fundraising target. However, the company noted its blockchain project is not shutting down any time soon.
Civil’s ICO Debacle
As reported by Fortune, the startup closed sales of its CVL token on Oct.15 after drastically failing to come close to the $8 million minimum target sought by its founders. The New York-based company is a decentralized news aggregator site which aims to provide valid information to readers by time-stamping data and to create “newsrooms” governed by CVL holders to incentivize workflow.
Civil runs on the Ethereum blockchain and aims to provide crowd-sourced journalism that is free of political agendas and monopolist sentiments. Earlier this month, the firm partnered with publication giant Forbes to publish the latter’s “metadata” – containing the author’s identity and confidence of verified information inscribed on the Ethereum blockchain.
However, the partnerships and potential use cases have failed to stir up interest in the Civil protocol, presumably as an adverse effect of the prolonged bear market the cryptocurrency sector is facing in 2018.
Civil received a seed funding from Ethereum incubator ConsenSys Labs in 2017 and has since operated on the initial capital. It sought $8 million – $24 million via ICO to further enhance its product and create a strong contender in the journalism space. However, as funding efforts failed to clear the minimum threshold, Civil shall “automatically refund” all participants who purchased the $1.2 million worth of CVL tokens by Oct.29.
While the move may strike as sudden to most, warning signs of a crumbling ICO appeared much earlier. Just five days before the ICO close date, the project had raised close to $1 million – indicating reaching the soft cap was a mammoth task within a short while.
Civil CEO Matthew Illes said in a blog post on Oct.10:
“The numbers will show enough that we are not where we wanted to be at this point in the sale when we started.”
Another faltering sign was the lack of interest from Civil has been making efforts to attract credible companies to use its product on their publications. Recently, a Wall Street Journal article noted Civil had approached several agencies, including The Washington Post, Dow Jones, and New York Times for partnerships, to no avail.
Meanwhile, Civil’s core team has stated it shall continue with a token-based fundraising method before the platform is officially launched, despite the debacle. Illes highlights the company is looking forward to beginning another token sale in “weeks, not months.” He adds the new token sale will be “very different from the last one and much easier.”
Public sentiment in ICOs radically reduced since January 2018 when a mere whitepaper was all that was required to raise millions of dollars. However, a market bust, token frauds, and stark absence of working products have led serious investors to rethink ICOs, at least until adequate regulations are in place.
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