Meet ISPO: An innovative proof-of-stake tool for blockchain-based fundraising

Venture capital has long been the go-to method for crypto projects looking for funding during the peak of a bull cycle. However, as the bear market of 2022 extended, the amount invested by crypto venture capital funds dwindled, showing a clear need for a self-sustained funding system for the blockchain space.

A Cointelegraph Research report shows that while 2022 saw more capital inflow to crypto projects in total, there’s a clear decline on monthly funding charts after May 2022 — or the time of the Terra ecosystem collapse.

Web3 and crypto projects lacking access to VC funds need ways to raise money from within the space, and blockchain technology provides several methods, such as initial DEX offerings, security token offerings and initial exchange offerings. One such method that benefits from a unique characteristic of proof-of-stake (PoS) blockchains is the initial stake pool offering, or ISPO.

Utilizing the delegation mechanism of a supported PoS blockchain, the ISPO model helps Web3 and crypto projects raise funds without the custody of investors’ funds. An ISPO starts with a project launching a staking pool on the blockchain. Users can then stake their native tokens, such as ADA for Cardano, in the pool, delegating the rewards to developers. In return, stakers get rewarded with said project’s utility token. The whole process provides developers an opportunity to raise funds, while users can earn rewards with ISPOs during the bear market.

A new way to participate in staking pools

Since ISPO lets investors maintain control over their funds, it quickly became a popular method of fundraising for projects, mainly across the Cardano ecosystem. Occam DAO, the decentralized community middleware between leading layer-1 and layer-2 blockchains, recently launched its ISPO-as-a-service fundraising platform to help Web3 developers get financing for their projects.

Kickstarting the platform on the Cardano blockchain, Occam DAO aims to expand its ISPO services to all delegated PoS blockchains. The platform makes becoming an early investor in the next big Web3 project simple by presenting all available ISPO pools on one main dashboard. Users can easily see information about the number of delegators, active stake, token allocation and other stats, and pick a pool to participate in.

The ISPO-as-a-service has launched with staking pools for Occam’s reward token CHAKRA and the dual token DAO CURL. Representing a weighted basket of all the incubated project tokens deposited in the staking pool, CHAKRA token helps users benefit from innovation and value provided by the Occam DAO during the bear market. Both projects can be found on Occam DAO’s ISPO platform.

Speaking about launching on the Cardano blockchain, Occam DAO said: “We’re excited to provide the Cardano community with opportunities to delegate their ADA and be rewarded for it via our new ISPO infrastructure. We are confident that as a result of our partnerships and incubation services, our community will have access to some of the most innovative projects in the space.”

Deemed “the ultimate weapon in the battle against liquidity fragmentation,” CURL is the second project on Occam’s ISPO platform with an aim to streamline the user experience of liquidity providers and concentrate synthetic liquidity on various Layer-2 networks. The protocol helps pool synthetic and bridged tokens on supported networks to improve safety and simplicity among blockchains.

“Bear markets are for building” is a phrase that has echoed across the crypto space over the last year. Thankfully, development never ends with blockchain. With platforms like Occam DAO’s ISPO-as-a-service, thriving projects can easily find a place to fund their ongoing efforts while crypto users can discover new and reliable ways to accumulate rewards during the crypto winter.