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How Waggle Is Besting Vesting to Create Liquid Market for Reserve Tokens

UTC by Andy Watson · 4 min read
How Waggle Is Besting Vesting to Create Liquid Market for Reserve Tokens
Photo: Coinspeaker

Waggle believes it has found a way to circumvent onerous vesting schedules by providing an avenue for teams that require additional capital – without breaking the terms of the original vesting contract.

Did you hear the story about the tortoise and the hare? The hare starts the race in a blur of motion only to run out of steam before the finishing line and ultimately lose to the slower but more consistent tortoise.

In 2021, crypto fundraising can be likened to the hare, with projects receiving a burst of capital upon launch which enables them to be first out the gates. Unfortunately, this “raise first, build later” model, as popularized by ICOs and later IDOs, is prone to leaving teams pulling up on the final straight.

What happens when the money runs out and the blockchain-based platform is only partially built? Who can you turn to then for the capital injection that will carry you over the finishing line? Venture capital is usually the only option at this stage, and it’s one that’s fraught with downside including the obligation to hand over the keys of your kingdom to equity-hungry VCs.

Waggle Network believes it’s stumbled upon a better solution, one that benefits teams and investors alike. And it can all be tied back to the asset that kick-started the race in the first place: the native token.

Wiggle Room for Cash-Strapped Crypto Startups

Vesting describes the emission schedule for tokens awarded to project teams as remuneration. It typically occurs on a linear or milestone basis, with the goal of aligning incentives between the platform’s builders and its community. When optimally designed, vesting prevents a glut of reserve tokens from being dumped onto the market and ensures that the bright minds who conceived the project stick around to see it reach fruition.

But what happens when teams require additional capital, yet the only asset they have available is native tokens? Placing a tranche of these in the hands of private investors risks recreating the scenario that vesting was designed to avoid: market dumpage, complete with the commensurate disillusionment this engenders among the nascent community.

But what if there were a way to pass tokens from reserve to their staunchest supporters – public investors – in a controlled manner that wouldn’t induce market panic? This, essentially, is the solution that Waggle Network has developed. It comprises a decentralized marketplace that’s open to retail investors. Waggle performs DD on the projects and tokens looking to raise capital while providing a means for public investorse ab to snap up tokens that are usually only accessible to their private counterparts via OTC deals at this stage in the project’s life cycle.

Besting Vesting to Create a Better Deal for All

Waggle believes it has found a way to circumvent onerous vesting schedules by providing an avenue for teams that require additional capital – without breaking the terms of the original vesting contract. The service provides a lifeline for projects that require mid-stage funding without private investor terms attached, but they’re not the only beneficiaries in this deal.

All too often, retail investors learn of a promising project long after the initial token sale has concluded. As a result, they are unable to acquire tokens at the price or in the quantity they would like. Waggle’s decentralized marketplace offers them an opportunity to buy into projects they believe in, despite having been slow out of the blocks. Waggle turns project teams into tortoises that can last the course, while admitting retail investors to the race just as the event is heating up.

Slow and Steady Wins the Race

Will Waggle’s vision for reinventing fundraising catch on? It’s early days, but having raised $3 million from crypto’s usual VCs, it’s gotten its own race off to an auspicious start. And with a native token ($WAG) and a public sale still to come, Waggle could prove to be one of the first test cases for its original fundraising concept.

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Andy Watson
Author Andy Watson

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