The mechanism allows investors to use part of the earned compensation to fund startups.
Engagement-focused Blockchain Flare Network has partnered with software infrastructure company Lena Instruments to implement a crowdfunding mechanism that will reduce the risks associated with investing in startups.
Lena Instruments has announced a so-called “CloudFunding” launch pad that will allow Flare investors to distribute a percentage of the rewards they earn for investing in new crypto startups without deferring their initial investment.
The platform not only offers its contributors a low-risk investment solution, but also aims to help ensure that projects launched on the platform have regular cash flows during reward distribution periods.
Flare Network CEO Hugo Filion believes the new mechanism is a good way for developers to gain early access to community funds. He explained that this creates a “win-win situation” for everyone involved. He said:
“New projects get early access to funding and community support, and Flare token holders get the opportunity to join exciting new projects without risk to their client.”
In July, decentralized exchange (DEX) Pangolin debuted on the Flare blockchain, creating new cross-chain token pairs and boosting network liquidity. DEX allows Flare-based decentralized applications (DApps) to add direct token exchange capabilities to their projects.
Related: Why interoperability is key to mass adoption of blockchain technology
Meanwhile, Web3 is recognized as a great way to solve content creators’ budget problems due to its inherent features. In a previous interview with Cointelegraph, Faro Company CEO Mehmet Erilmaz said that Web3 frees content creators from traditional control and is a great alternative for crowdfunding entertainment projects.
Laura Morby, managing director of Lena Instruments, said her company, which is the main owner of Flare, will continue to support the project. “CloudFunding is a modern decentralized launchpad that allows the community to support the best possible projects within the ecosystem, carefully handpicked by the platform,” said Morby.
