The Avalanche blockchain has exploded in recent months, growing to host over 380 projects and propelling AVAX toward the top 10 cryptocurrencies by market cap. The ecosystem will be welcoming many more innovative use cases if the Colony accelerator has anything to say about it.
A community-driven venture powered by its own CLY token, Colony aims to do for Avalanche what ConsenSys has done for Ethereum, offering mentorship and funneling investment into projects building on the eco-friendly smart contract platform. (See Insiders’ Hot Stocks on TipRanks)
Rewarding the Community
Distinct from other accelerators, Colony doesn’t simply allocate funds to those projects and protocols that it deems promising. Instead, its unique Ecosystem Farming concept aims to empower the community itself to invest in early stage Avalanche projects for the first time.
What this means is that Colony’s community can vote for capital deployment across the Avalanche ecosystem, invest in early stage ventures, provide liquidity to defi protocols, and receive airdrops in the form of project tokens from Colony’s investments. What’s more, community members can receive staking rewards from AVAX and upcoming subnets.
By integrating the traditional venture capital model with the spirit of community via open governance, support and inclusion, Colony aims to bootstrap projects that best serve end users, while bringing real investment opportunities to committed retail investors.
Established earlier this year, Colony’s ambitious roadmap will see it make its first capital deployments early in 2022 before evolving into a Decentralized Autonomous Organization (DAO) later in the year. In simple terms, this means that the community will be entirely governed by its community members, each of whom will cast votes that are recorded on the blockchain.
Incentivizing Developers
Colony has already formed a close association with the Avalanche Foundation, which recently unveiled a $200-million fund to incentivize developers to build on the network.
According to the accelerator’s CEO, Elie Le Rest, Colony will be “sharing deal flow to create a more fertile ground for projects building on Avalanche, the fastest, highly customizable, smart contracts platform in the blockchain industry.”
Indeed, Avalanche Foundation led a recent funding round that saw Colony raise $18.5 million from a slew of backers including Shima Capital, Hashkey, GBV Capital and Bixin Ventures.
The war chest will be used to supply early stage funding (50%), provide liquidity to existing defi protocols (30%), validate Avalanche-based networks through AVAX and subnet token staking capabilities (10%), and bootstrap other quality Avalanche projects (10%).
Colony has already started deploying capital to early stage projects such as Platypus Finance, a new kind of automated market maker (AMM) that facilitates exchanges between stable assets. Additional investments are expected to be confirmed after Colony’s upcoming token offering.
Disclosure: At the time of publication, Reuben Jackson did not have a position in any of the securities mentioned in this article.
Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates Read full disclaimer >
