Nieman Foundation at Harvard
HOME
          
LATEST STORY
Is the future about one all-knowing AI or many? The new app Poe gets you ready to chat with them all
ABOUT                    SUBSCRIBE
Oct. 16, 2018, 3:30 p.m.
Business Models

Civil’s token sale has failed. Now what? Refunds, for one thing — and then another sale

“For those who purchased tokens, first of all, thank you. We’ll offer full refunds.”

It was clear — definitely by midnight last night, but also in the days and weeks leading up to yesterday — that journalism blockchain platform Civil’s initial coin offering, in which it aimed to raise $8 million, was not going to work. Civil ended up raising about $1.4 million, and around three-quarters of that was acquired by ConsenSys, Civil’s seed investor.

Some of the things that went wrong are clear. It was very hard to buy into Civil, though in the last couple of weeks the company had started letting people buy tokens with cash and was also, up to the last minute, asking possible contributors to email Civil customer service for help buying tokens.

“The biggest things to know are that a) we’re going to try this again in the near future, under more reasonable terms; and b) this doesn’t impact the grant funding for any of Civil’s initial, ‘First Fleet’ newsrooms, which will continue publishing per the terms of their respective agreements,” Civil cofounder Matt Coolidge told me in an email.

In a Tuesday post, Civil CEO Matthew Iles said that “a new, much simpler token sale is in the works. We’ll be sharing details on that soon,” and noted that nearly 3,000 people had bought Civil (the hard way!) in this offering. Those buyers can either “opt into this new sale, request an immediate refund, or be automatically refunded by October 29.”

The “14 initial newsrooms” that got seed funding from Civil will keep running for now — and they’re getting a fresh $3.5 million from ConsenSys (beyond the funding that was announced last year) to do it. (Four other newsrooms had also joined Civil earlier this month, and Forbes had said it would experiment with it.) That $3.5 million will come with the relaunched token sale, Coolidge said (the Medium post notes the sale will happen within “weeks, not months”). Coolidge told me:

It reflects Consensys’ commitment purchasing $3.5M of CVL tokens at whatever price the reworked token sale determines. They’ve also committed to either a) not voting those tokens or b) working with the Foundation to ensure that the tokens are voted in a manner that does not represent the outsized ownership by ConsenSys as we bootstrap the system.

They recognize it will give them a large share in the network, and have no interest to gut the market dynamics by being able to exercise outsized voting power at the expense of others. We’ll be sharing more specifics on this front soon.

I was confused by this (is it valuable valuable cash that the news orgs are getting? Or is it Civil tokens?) Coolidge explained:

Consensys is going to buy $3.5 million worth of CVL tokens when we launch our new sale in the coming weeks, and at the new terms we set (eg, they’re not getting a discount on the price they pay for CVL relative to any other buyers).

They’re paying now for those tokens, with that money being committed to the Civil Foundation so that it can get up and running officially, and on the same timeframe Vivian and her team had projected based on the end of the the first attempted token sale.

POSTED     Oct. 16, 2018, 3:30 p.m.
SEE MORE ON Business Models
Show tags
 
Join the 60,000 who get the freshest future-of-journalism news in our daily email.
Is the future about one all-knowing AI or many? The new app Poe gets you ready to chat with them all
Poe lets you use ChatGPT alongside a new rival named Claude — which seems to work better in important ways.
Google now wants to answer your questions without links and with AI. Where does that leave publishers?
A dozen years ago, Eric Schmidt forecast the AI pivot that’s playing out this week. And the questions it prompts — around the link economy, fair use, and aggregation — are more real than ever.
A journalistic lesson for an algorithmic age: Let the scientific method be your guide
“One of the best parts about using the scientific method as a guide is that it moves us beyond the endless debates about whether journalism is ‘fair’ or ‘objective.’ Rather than focus on fairness, it’s better to focus on what you know and what you don’t know.”