Social Q&A platform ASKfm plans to embark on the next phase of its expansionary journey. After maintaining a shroud of secrecy over their ambitions for the last few months, ASKfm announced the launch of their own ICO, with the private sale already underway ahead of the pre-sale and public sale. However, unlike many startups attempting to raise funds for highly technical solutions or services designed to disrupt existing industries, the company is well positioned to ride to post-ICO success instead of becoming another statistic.
Move over IPOs: ICO is the buzzword in fundraising. After raising an astounding $5.80 billion in 2017, ICOs launched in 2018 have already blown past this figure, accumulating $6.30 billion in funding during the first quarter alone. Over the past year, many ICOs have launched to substantial fanfare, but the degree of success has varied dramatically. Despite significant interest as investors test the waters in this new, budding asset class, the environment remains full of pitfalls.
46% of 2017’s ICOs failed according to figures compiled by Bitcoin.com. A further 113 projects of the 902 launched in 2017 have either completely dropped off the map, stalled, or been labeled as semi-failed, bringing up the prospective failure rate of last year’s crowdfunding efforts to 59%. Now that more established companies are entering the sphere with the hopes of building on their existing solutions, the broadening horizon for ICO investors signals opportunity ahead.
Building Upon a Solid Foundation
What separates ASKfm from other startups is that it is a well-established platform that has been around since 2010 and has already successfully monetized its service, counting over 215 million users. This user base means that the company already boasts a captive audience which is actively using its version of social networking. With blockchain, the company can enhance its offerings by providing real-world incentives for participation and contribution.
At present, the platform allows users to gain a better understanding of topics or improve social interactions by posing questions and corresponding with other members. The goal of delivering common knowledge has been a success, with platform users asking approximately 600 million questions each month, representing over 49 languages and 168 countries.
Unlike many of the companies that approach the ICO market without a viable business model or roadmap, ASKfm has laid out its entire vision for tokenizing its services in a way that will reward all stakeholders. Instead of continuing with their advertising-based revenue model, ASKfm 2.0 intends to position itself as a knowledge center for users across the world. Ultimately, the move towards tokenization signifies an effort to attract more knowledgeable individuals and professionals to the platform to improve the overall quality of responses while increasing trust and confidence among users.
A Well-Designed Ecosystem
An important reason why ASKfm stands out against a crowded backdrop of companies seeking funding is the carefully crafted ecosystem that accompanies its tokenization efforts. The value of any blockchain solution ultimately depends on its accompanying utility and the velocity of tokens through the ecosystem. A more valuable utility will likely see its token appreciate in-kind as higher demand for the services pressures token prices. In this regard, ASKfm readily understands this stakeholder dynamic with a service that is already largely utilitarian in nature, highlighted by its 10 million monthly active users.
Mirroring the best ICO-based service launches, the company is leveraging blockchain to provide an even better service to its community. The more democratic environment pitched by the ASKfm 2.0 project will help the community determine the best sources of information fairly and independently while the environment will be subject to more market-based forces in terms of the pricing of available services. In addition, blockchain represents the perfect destination for a company like ASKfm because of the tokenization option which denominates value and transparently records all interactions between parties.
The company has effectively distilled the spread of common knowledge into its most basic form, which is questioners and responders. By positioning the platform as a service designed specifically with the intention of connecting these two parties and ensuring a high-quality experience thanks to tokenization, ASKfm 2.0 satisfies all the essential requirements for a successful decentralized and disintermediated platform. Furthermore, the ICO will serve as a launching pad for transforming ASKfm from a Q&A-based social network into a Massive Open Online platform that eventually intends to deliver paid educational courses, providing platform users and students with accredited scholastic resources.
To ensure that users can access the best information, the platform will employ smart contracts which release payments in the form of the platform’s ASK tokens (ASKT) once the conditions set by a questioner are fulfilled by a responder. Smart contracts ensure the reliability of the ecosystem by helping questioners submit bids for answers which can be accepted or rejected by responders. In the event that a bid is rejected, the two parties can negotiate or seek additional crowdfunding for the response. After the answer to the question is validated or accepted by the questioner or crowd, the tokens contained in the smart contract are released to the responder which can recycle value within the ecosystem or exchange tokens for another cryptocurrency.
Most importantly, the deployment of smart contracts in this ecosystem assures that the service will be both autonomous and scalable. By building capacity to handle more users in advance of its launch, ASKfm 2.0 will be able to sidestep many of the problems experienced by early iterations of blockchain which required immense processing power and resources to scale services.
The Biggest Mass Migration Yet to Blockchain?
Considering the overall audience size already active in ASKfm’s existing service, the transition to an ASKfm 2.0 blockchain-based solution could have dramatic implications not only for the company but also the credibility of the blockchain environment as a whole. Between the amount of daily and monthly active users accompanying the enormous volume of questions the company handles regularly, ASKfm could by the catalyst for the single largest migratory event towards blockchain in the technology’s brief history. With a fundraising goal of $100,000,000 to finalize development and roll out the new platform, ASKfm is positioning itself for a much wider distribution of its services and intends to reach every corner of the globe.
Of the factors that ultimately contribute to fundraising success, ASKfm is in a much better place relative to other companies attempting to raise capital from the ICO strategy. Due to an existing user base, ongoing monetization, and most importantly, a vision for incorporating blockchain in a way that benefits all the platform’s participants, ASKfm could prove to be the most exciting coin offering of 2018 considering its strong offering alongside a living ecosystem that already demonstrates significant value.