Crypto Winter Brings Added Lows To The Market, But Blockstack’s BTC And ETH Bags Won’t Be Hurt
Crypto Winter Brings Added Lows To The Market, But Blockstack Won’t Have To Worry
During the heydays of cryptocurrency, many platforms took advantage of the opportunities offered to them, quickly spending the capital that they would need later to keep them afloat. Those firms are the ones struggling to stay active during the current slump, while others were more cautious in their spending by limiting their spending, like Blockstack.
Blockstack’s reserved capital came from a Series A funding round and a token sale, adding up to almost $54 million. However, rather than spending it quickly, they only permitted themselves limited access to the funds, consulting with the advisory board before spending. Recently, the board allowed for use of $25 million after the launch of the blockchain surpassed their expectations. Presently, there are many different decentralized applications on the platform, including Graphite Docs, which is used by about 4,000 individuals.
In a statement to CoinDesk, co-founder Muneed Ali said,
“It was a self-imposed thing we did for investor protection. We, in general, have been pretty lean. We’re still less than 25 people. We definitely won’t be hiring very aggressively over the next year but market volatility won’t change our plans that much.”
According to Ali, the reason for extending the runway in the first place was due to the fiat holdings that 70% of their capital was based in. The rest of the funds are in Bitcoin and Ether, which aren’t meant for covering those types of costs with the platform. Ali went as far as to say,
“Crypto would be the last thing we’d use.” He added, “There isn’t a lot of liquidity in our system and it was designed that way. We wanted to attract parties that believe in the long-term success of the ecosystem and contribute to building it.”
With the lockup in place, the company hasn’t even used 20% of the allotted capital, since so little has been spent on their development and a few grants. The only way that an additional $10 million from the capital will be allotted for spending is with a userbase of at least 1 million users.
With these conditions, it remains each for Blockstack to maintain their platform without loss. Ali explained,
“We’re at the end of the infrastructure phase. We want to optimize our apps so that their usability is as good as traditional web applications or cloud applications.”
Blockstack has kept a conservative stance throughout the life of the platform, holding back from promoting community incentives to either invest more or bring in new users. Based on information provided by head of growth Patrick Stanley, the platform wants to see how the SEC ultimately decides to regulate cryptocurrency before they decide to spend more funding on promotions.
For now, Stanley says, “If you’re contributing labor and value to the network, you should be compensated for that,” speaking on the developers that offer apps for users. Then, they have partners that examine the activity on those applications. However, ultimately, the community members will be the driving force behind token distribution, ensuring that the startup remains decentralized.
The innovative method of use apps for rewards has attracted the attention of many technologists. Ali added,
“You want to attract people that don’t even care about cryptocurrency. They are coming for different types of utility.”
Justin Hunter, the founder of Graphite Docs on the Blockstack ecosystem, agreed with the innovative stride of the company. He said,
“Collaboration between apps on Blockstack’s platform is still largely a matter of the app developers working together and writing custom code. Unlike other decentralized development platforms, Blockstack doesn’t use their token to drive development.”
As far as the progress and more funding going forward, Ali said,
“There is room for doing a Series B or Series C. We’re years and years away until business models become pressing for us.”