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The venture capital world has long been known for its traditional approach to funding and investing in startups. However, the emergence of blockchain technology can potentially disrupt this industry and revolutionize the way venture capital operates.

One significant aspect of this disruption is the tokenization of assets. Blockchain enables the creation of digital tokens representing ownership in assets or companies.

This tokenization allows for fractional ownership and liquidity of traditionally illiquid assets, such as real estate or early-stage startups. It expands investment opportunities, enabling a wider range of investors to participate in ventures by owning tokens, even with small amounts of capital.

Another key aspect is the use of smart contracts. These self-executing contracts with predefined rules and conditions are encoded on the blockchain. Smart contracts can eliminate the need for intermediaries, reducing costs and increasing efficiency.

Investors and entrepreneurs can create and execute investment agreements directly on the blockchain, streamlining the investment process and fostering participant trust.

By eliminating intermediaries, blockchain democratizes access to funding, empowering entrepreneurs globally and attracting investment from a wider pool of investors.

Blockchain technologys global accessibility transcends geographical boundaries, connecting investors and entrepreneurs worldwide. Startups and investors in emerging markets, where traditional venture capital may be limited, now have greater opportunities.

Blockchain-based platforms also facilitate the creation of secondary markets, allowing investors to trade their tokens representing ownership in ventures.

Alex Strzeniewski, founder and CEO of AngelBlock a decentralized fundraising platform told Cointelegraph, With blockchain-based fundraising, tokens representing equity or debt can be traded on secondary markets, allowing investors to exit their investment at any time. He added:

Secondary markets provide liquidity to early-stage investors who traditionally had to wait for exit events, such as acquisitions or initial public offerings (IPOs), to realize their investment returns. The ability to trade tokens on a secondary market enhances the overall attractiveness of venture capital investments.

Rachid Ajaja, founder and CEO of decentralized finance (DeFi) platform AllianceBlock, told Cointelegraph, Traditional venture capital investments involve a higher level of risk and longer lock-up periods for investments, making them less appealing to some investors. Secondary markets allow investors to have the option to exit their positions earlier if they desire, mitigating some of the traditional risks.

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Ajaja continued, saying, Investors are more likely to be interested in participating in the fundraising process when there is a possibility of trading their tokens on secondary markets. This liquidity factor creates a more active and dynamic investment ecosystem, attracting a broader range of investors, which can positively impact a projects value and utility.

Blockchain-based fundraising platforms are decentralized platforms that enable users to invest in projects directly. The process usually works by investors depositing tokens into a smart contract that will send a projects native token to each participating wallet.

For example, if Project A sells Project A tokens (PAT) for USD Coin (USDC) at a 3:1 ratio, an investor will receive 3 PAT tokens to their wallet if they deposit 1 USDC.

Although these platforms operate in a decentralized manner, certain platforms may still necessitate users to verify their identity to adhere to regulatory requirements and safeguard the interests of investors.

This verification process mitigates fraudulent activities and bolsters the platforms overall credibility.

Some platforms also take additional measures to improve security and trust for users. For instance, noncustodial fundraising platform AngelBlock has a milestone-based compensation strategy with built-in governance measures. Investments are based on whether investors believe a startup has reached a set of predetermined goals.

When these requirements are satisfied, the funds will be released. The platforms governance is made more democratic by this technique, which encourages user participation.

The protocol employs an on-chain vesting and token distribution method to ensure that tokens are not accidentally transmitted to the incorrect addresses.

Utilizing decentralized fundraising platforms can foster a sense of community and collective objective by enabling direct interaction between a projects proprietors and its backers.

Several blockchain fundraising platforms integrate governance structures and voting mechanisms. Tokenholders can engage in decision-making procedures using voting, thereby exerting influence over project-related determinations such as the allocation of funds, the direction of the project or significant governance modifications.

Implementing decentralized decision-making processes empowers the community and fosters the alignment of interests among stakeholders.

Strzeniewski told Cointelegraph, Integrating governance structures and voting mechanisms in blockchain fundraising platforms brings a new level of community involvement and transparency to the process. It empowers the community by giving tokenholders a voice in key decision-making processes, such as project development milestones and budget allocations.

Strzeniewski continued, This aligns stakeholder interests as everyone has a say in the projects direction and success, creating a mutually beneficial environment where the projects success directly translates to the success of its investors.

Democratizing fundraising in the Web3 sector holds immense significance for various reasons. Firstly, it promotes inclusion and access by providing investment opportunities to individuals and communities previously excluded from traditional funding channels.

This democratization breaks down barriers, fostering diversity and innovation by enabling a broader range of projects to receive financial support.

Furthermore, democratized fundraising empowers entrepreneurs by granting them greater control over their fundraising efforts. Instead of relying solely on traditional venture capital firms or angel investors, entrepreneurs can directly engage with a global network of supporters who are genuinely interested in their projects.

This shift in power dynamics allows entrepreneurs to maintain ownership and independence while aligning their goals and values with the interests of their community of supporters.

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AllianceBlocks Ajaja said, Involving a broader community in the fundraising process has multiple advantages. First, it serves as a form of validation. If a large number of diverse investors show interest in a project, it is a strong indication of its potential.

The CEO continued, It also contributes to community engagement, as investors are more likely to promote a project they have invested in, creating a network effect that can significantly boost a projects visibility and reach.

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How blockchain is transforming fundraising for startups and ... - Cointelegraph

Home De-Fi 6 Of The Most Secure Decentralized Storage Protocols Around

Decentralized storage resources are revolutionizing the conventional cloud-hosted storage landscape, offering organizations a more streamlined and secure method to safeguard their most critical data.

Commonly known as blockchain storage, these services facilitate the encryption and distribution of vital information across multiple locations. The nodes constituting these decentralized storage networks can be managed by organizations or individuals, who rent out their surplus storage space. All data is encrypted with a private key, ensuring exclusive access to the data owner, thereby preventing even the storage provider from viewing the stored content. Moreover, the distribution of data across various locations further bolsters security.

Decentralized storage frequently employs blockchain to document storage transactions. The distributed ledger technology is perfectly suited for this role as it can synchronize and validate storage transactions across distributed nodes. It can record data locations, shard hashes, rental costs, and other crucial information. The blockchain can also facilitate the matching of hosts with organizations seeking alternative storage.

Despite being a relatively new concept, decentralized storage services have several competing platforms in the market.

Filecoin, a well-known entity in this burgeoning industry, was launched in 2017. It offers a decentralized, secure, and efficient platform for companies to rent and hire storage resources. Filecoin utilizes a peer-to-peer protocol that pairs storage contributors with those seeking a cost-effective alternative to the cloud.

Filecoin employs two unique consensus mechanisms: proof-of-replication and proof-of-space-time. These mechanisms allow a miner to prove the uniqueness of the data copy and its storage on a physical resource for a specific duration, respectively. Filecoin operates a marketplace where hosts can offer their storage resources at their chosen price, with users paying them using Filecoins native cryptocurrency, FIL.

Serenity Shield focuses on the secure storage of highly sensitive data and offers a unique and decentralized recovery mechanism that guarantees users can always retrieve this information. This mechanism also powers Serenitys crypto inheritance services.

At the heart of everything is Serenitys StrongBox, a dApp that resides on the Secret Network. Users start by connecting a compatible digital wallet to the StrongBox dApp and creating an account. They then add their sensitive data, which could be a wallet seed phrase or something else.

This data is encrypted and stored within a smart contract on the Secret network. A viewing key is then generated, further encrypted, and divided across three NFTs one for the smart contract, one for the user, and the third for their designated nominee. The user must then specify a set of conditions under which the nominee can access that NFT.

The Internet Computer protocol, devised by the DFINITY Foundation, provides a secure environment for smart contracts, decentralized apps, and website hosting.

Internet Computer is a four-layer protocol that operates on individual nodes. The network runs each subnet independently, yet they remain asynchronous, collectively forming a unified computing platform. By relying on a collection of independent data centers worldwide, Internet Computer offers almost unlimited scalability.

The storage marketplace operates similarly to Filecoin, with users contributing their unused storage capacity and users paying for it using ICP tokens.

Storj, an open-source project, claims to be among the most affordable cloud storage solutions. It is based on a peer-to-peer network that connects multiple globally-distributed storage resources contributed by organizations and individuals.

Storj features a unique design based on small pieces of data that are encrypted client-side before being uploaded to the network. It also implements coding techniques that ensure the data remains accessible even when the primary nodes hosting it are offline.

Storage node operators are compensated with STORJ tokens, but unlike other platforms, it charges customers a standard price for storage, regardless of the chosen host node. Storj is ideal for application data storage, content distribution, and archiving use cases.

Flux positions itself as a blockchain storage platform for hosting and deploying decentralized applications. Its a user-powered storage network that makes computing resources accessible to anyone who needs them.

With its focus on interoperability, redundancy, and security, Flux enables users to find available storage resources based on their unique specifications. Node operators earn FLUX tokens as a reward for contributing resources and overseeing the network.

Flux also bills itself as an environmentally-friendly storage network, as its underlying blockchain is powered by an ASIC-resistant proof-of-work consensus mechanism. It means almost anyone can become a miner on the network, even with low-powered hardware. Fluxs most well-known customer is WordPress, which uses its platform for Web hosting.

Akash Network is a platform for the efficient and secure trading of computing resources. It is founded on a cloud architecture called Supercloud that makes it easy for dApps to migrate across different storage providers and availability zones.

Companies looking to acquire storage resources can submit specifications such as the required space, bandwidth, and uptime. Then, storage hosts can bid to provide their services. The result is that businesses can access storage resources at a much lower cost than traditional cloud providers can offer. Akash relies on a proof-of-stake consensus algorithm that governs the participation of storage providers and node operators. Because of its strong security and lower costs, the service is popular with application developers.

Akash Networks AKT cryptocurrency fulfills several roles, such as incentivizing participation, securing the underlying blockchain, and governance.

Proponents of blockchain-based storage networks believe that these protocols will expand because they offer significant advantages compared to traditional, centralized cloud storage providers.

Benefits such as greater availability, censorship resistance, and enhanced security ensure that decentralized storage can meet the key requirements of most enterprises.

CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com

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6 Of The Most Secure Decentralized Storage Protocols Around - Captain Altcoin

The year 2022 was not a very good year for Cosmos and its vision of inter-blockchain communications (IBC). The collapse of the Terra Luna ecosystem (the biggest protocol on Cosmos at the time), tension between co-founders and a fall in the tokens price all cast a shadow on its future prospects. That said, projects such as dYdX and cross-chain oracle protocol Seda continue to call the network home and are adamant about its IBC vision.

Currently, Seda says it enables over 12 million data feeds across 24 networks. In an interview with Cointelegraph at EthCC Paris, Jasper de Gooijer and Peter Mitchell, co-founders of the Seda protocol (formerly known as Flux), discussed the importance of oracles in cross-chain bridges and how they protect the value they enable.

Cointelegraph: How do oracles add value to IBC?

Jasper de Gooijer: The current problem is that smart contracts can only query data outside of blockchains themselves, right? That greatly limits the amount of use cases that smart contracts have, such as in lending markets. So in those markets, if you want knowledge on price on, say, six chains at once, you need six oracle providers, and that's when you need multichain oracles.

CT: What is the biggest accomplishment or technological breakthrough thus far in the Seda ecosystem?

Peter Mitchell: We launched Seda about a year ago. And within eight weeks, we became the second-largest oracle, securing over $2.7 billion in total value locked. And then we realized that we couldnt monitor and scale this into something like 200 chains, right? It would be impossible to have robust monitoring of price feeds.

So the innovation weve built on Seda is that the main chain aggregates the data and then pushes the smart contracts to the subchain. And so, rather than deploying the oracle contract on every new chain, we just deploy this single smart contract.

CT: In light of recent high-profile oracle exploits, what are some ways of keeping the technology secure?

JG: The main point is really just education. People should know that they should not build a bridge with hundreds of millions of total value locked if the [underlying] token only has like $10 million of liquidity on decentralized exchanges. The second thing is building smart price data modules, so you can swap tokens for something like time-weighted average price, which makes it less likely to slip in volatile environments.

PM:Like Jasper was saying, if you have a token that's being borrowed against $100 million, and you only have, lets say, $10 million in liquidity on-chain, then you cant really liquidate $100 million or $50 million positions against that kind of liquidity. So setting up metrics like liquidation thresholds and collateralization ratios beforehand can really set up the protocol for success.

This interview has been edited from its original format for clarity.

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Seda co-founders discuss intersection of oracles and multichain - Cointelegraph