The new funding vehicle of Initial Coin Offerings have been used by many projects over the course of this and last year, but it seems that we still have yet to see interesting applications of the initial coin offering model.
The city of Berkeley, a city known for its revolutionary roots is looking into using the initial coin offering model to fund a project to solve one of its biggest problems, housing.
The price of homes in the city is excessively high, thus pricing many out of the market, the funding vehicle would be used to set aside funds to create affordable housing projects in the city as necessary.
This event was triggered after the President of the United States stated on twitter that the would be minimizing funds provided to the city by the federal government, as business insider noted on the seventh of February.
This response by the city would be an interesting one, in the sense of, for the people, by the people if not for the concept of taxation. But let’s study this move further.
Initiators of this move
Individuals from the City Council of Berkeley formed a group to begin work on rolling out the blockchain oriented funding approach. This newly created group will be working with the mayor of the city, as well the UC Berkeley Blockchain Lab, and a few other partners like Neighborly to bring about this funding round.
The mayor of the city commented that he believes that is a form of being able to resist the present establishment.
The mayor of Berkeley commented to Business Insider:
“Berkeley is the center of the resistance, and for the resistance to work, it must have a coin.”
Federal Vs. State
Berkeley is one of the cities that are interested in providing a safe haven for immigrants, thus being a sanctuary city and has pledged not collaborate with the federal government on the matter of immigration. While all of this is going on, the ICE continues its onslaught in the realm of immigration in cities like San Francisco and elsewhere.
The president has also noted earlier after an activist event at the University of California at Berkeley, that he may pull federally allocated funds for the higher educational institution, stating through Twitter, that “If U.C. Berkeley does not allow free speech and practices violence on innocent people with a different point of view – NO FEDERAL FUNDS?”
Avenues and Solutions
The funding vehicle would serve as a way for Berkeley to have a potential plan to deal with their significant issues of homelessness. They will not have to fear the loss of federal funds if this plan goes off without a hitch.
This, on the face of it, looks like a grassroots movement to correct a long-term issue through innovative financing.
How would the ICO work?
The project would release their tokens, and these tokens would essentially be backed by another financial asset, their municipal bonds. Interestingly, these tokens would be able to be utilized local in merchant facilities, shopping centers, and to pay landlords that accept this form of payment for their good or service.
Jain, a partner in the deployment of the raise, states that this is different from other sorts of offerings.
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“Unlike most of the ICOs which deliver coins for a future value or service, these coins will represent a real security issued for a specific purpose.”