Yesterday, the world’s most ambitious media blockchain company had a very public embarrassment. It was the last day of a public token sale for the Civil Foundation, a media project using blockchain to launch a new generation of ad-free media startups. But when it came time to sell the token at the center of it all, the project came up short. Civil had initially planned to raise as much as $24 million, and pledged to return the money if it raised less than $8 million. In the final accounting, less than $1.5 million was spent on tokens, more than $1 million of it coming from Civil’s direct investors at ConsenSys.
The company put the blame on a needlessly complex process for buying tokens, and pledged to try again, returning donations in advance of a refigured sale in the weeks to come. But the result is still a disastrous start for a project that has struggled to gain momentum in the cryptocurrency world.
“We’re going to regroup and we’ll be fine”
But according to Civil CEO Matthew Iles, the experience hasn’t made him rethink any of the core aspects of the project. “We haven’t tested any of the fundamentals yet,” Iles told The Verge. “We knew fundamentally going in that we were going to be different, and some of the assumptions might be off, but we miscalculated just how off we were going to be.”
“We’re going to regroup and we’ll be fine,” Iles continued. “Before the end of the year, these thousands of people who already participated in the first attempt will come along with us and it will be the beginning of something.” So if observers were expecting Civil to close up shop after a failed sale, their assumptions were off as well.
In part, the confusion comes from the confounding Civil itself. The token sale was meant to fund the nonprofit Civil Foundation, which is distinct from the for-profit Civil Media Company. Publications like Popula and Sludge launched with grants from the venture-funded media company, although much of that support is now being taken over by the foundation. In the long term, the publications mostly plan to sustain themselves with user donations, either in simple cash or Civil tokens. This week’s sale is a problem for the foundation budget — and Iles says the nonprofits’ plans are already being scaled back as a result — but the rest of the network seems less concerned.
Depending on the context, Civil’s blockchain can be a governance mechanism, an anti-censorship tool, or a micropayments system
More broadly, a failed token sale is bad for everyone holding the tokens, which is just about everyone in the ecosystem. But that’s an abstract, long-term worry — Popula and Sludge weren’t counting on selling tokens to pay rent — and when you get more concrete, it becomes difficult to say exactly where the missing $20 million will come from. The project still has $3.5 million from ConsenSys, split between the nonprofit foundation and the for-profit media company, but that’s not much when you’re supporting 18 newsrooms and a software development team. At some point, the money will run out, but it’s hard to say exactly when it will happen. If you believe Iles, there’s plenty of time left.
“Any new thing needs a kickstart,” says Iles. “Any new thing needs a first backer. So we’re at the beginning of a long road.”
If all this sounds pointlessly, maddeningly complex to you, you’re not alone. In the blockchain world (which is no stranger to pointlessly intricate pitches), Civil’s incomprehensibility has become a running joke. Depending on the context, Civil’s blockchain can be a governance mechanism, an anti-censorship tool, or a micropayments system. Even observers who were convinced of the Civil blockchain’s usefulness in verifying datelines are less convinced of the broader merits of the project. Utility-based tokens like Filecoin — arguably the most complex blockchain projects that have found success so far — seem simple in comparison, but Iles bristled at the comparison.
“Filecoin is a way to pay people to run Dropbox on their computer,” Iles told me. “Civil is a way to crowdsource accurate and ethical information, at minimum. We’re complicated only insofar it’s important how we do things.”