Nieman Foundation at Harvard
HOME
          
LATEST STORY
The New Yorker’s new weekly newsletter on climate change will try to break through the daily noise
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
SHARE THIS STORY
   
 
Join the 50,000 who get the freshest future-of-journalism news in our daily email.
The New Yorker’s new weekly newsletter on climate change will try to break through the daily noise
“Climate is one of those big, overarching topics that feels essential to understand and also very overwhelming. The newsletter form seems like the right way to approach it because it narrows the focus.”
Spotify is gaining a podcast audience quickly. But is it an audience that isn’t as interested in news?
Data from Germany finds that Apple Podcasts users devote about 23 percent of their podcast listening to news shows — versus just 8 percent for Spotify users.
Feeling panicked about coronavirus? Media coverage of new epidemics often stokes unnecessary fear
For journalists, it’s worth remaining alert to the dangers of spreading fear — a highly contagious emotion — in the face of uncertainty.