DEFINITION of Acorn Collective

The meteoric rise of the initial coin offering (ICO) is evidence that crowdfunding is a viable and popular means of raising capital in today's business world. Fintech startups in particular have made use of crowdfunding efforts to launch new projects of all types. Nonetheless, crowdfunding as a tactic is significantly more successful in some regions than in others; a report by Cryptovest suggests that startups in developed countries have seen ample success with fundraising projects of this type while those in developing and emerging economies frequently continue to struggle when it comes to raising capital. In effect, the crowdfunding market is perpetuating its own exclusivity as the largest platforms offer only a limited number of projects, denying access to those in economically disadvantaged areas. Acorn Collective is a new project that aims to address this issue: It presents itself as the first blockchain crowdfunding platform.

BREAKING DOWN Acorn Collective

According to the Acorn website, the project "[promotes] social enterprise by providing free crowdfunding for any legal project in any country." Significantly, the project will "allow legal and non-harmful projects, irregardless of category," access to its free crowdfunding platform. It aims to provide a platform for local businesses as well as large consumer products.

Acorn Collective is able to set crowdfunding projects without fees by means of the ERC-20 token, which offers smaller transaction fees than those of other platforms. The proceeds from the Acorn ICO will fund so-called "Revenue Generation Mechanisms," enabling the project to avoid charging platform fees. The Acorn team initiated a "Project Incentive Fund" to offer incentives to early adopters of its platform and to encourage growth. In order to finance its own platform, Acorn offered an ICO pre-sale of its OAK token, selling out of all 7 million tokens during the event.

The OAK token powers transactions on the Acorn platform. The project website indicates that the token is used on Acorn Hub, the zero-fee crowdfunding platform, as well as in the Acorn Marketplace, which houses funded products, and on Acorn Local, a point-of-sale service for payments.

Acorn's ICO

Acorn was developed in the second half of 2017, with a whitepaper published during that time and regulatory measures taken into consideration. In the first two months of 2018, the project launched its ICO pre-sale, with up to 7 million tokens sold at a 50% discount. The pre-sale lasted from Jan. 29 through Feb. 19 and sold the maximum number of tokens available. The main ICO event is slated to begin on April 28. The ICO will continue for a period of one month, reaching its conclusion on May 28. Some 72 million tokens will be available for sale to investors during the course of the ICO pre-sale and the main sale event itself. During the second and third quarters of 2018, the Acorn team will release the designated token growth and stability mechanisms as the platform launches.

According to the Acorn website, the developers of the project believe that the crowdfunding market, which was $34 billion as of 2015, could grow to $1 trillion by the year 2025. Although platforms including Kickstarter are highly successful, the fees they charge can be prohibitive to smaller-scale projects, and these platforms also tend to restrict listings by geography. In response, Acorn Collective aims to eliminate payment fees by using blockchain transactions. The Acorn team claims to have a "growing pipeline of ventures waiting to list on [their] platform." It also boasts the ex-CTO of CrowdCube, "the world's largest equity crowdfunding platform," as a board member.

Acorn plans to produce a fixed supply of OAK tokens to be used for all transactions in the crowdfunding hub and for post-campaign marketplace transactions, support services and the point-of-sales payment app to be launched. The developers believe that a partnership with Bancor will provide "instant token liquidity" following the ICO in April. The ICO is targeting the sale of 35 million OAK tokens, with the main ICO sale price to be $1.4 per 1 OAK. The developers have placed a hard cap at 65 million OAK for the ICO. Tokens will be allocated with 80% going toward the public ICO sale, 16.66% to the company itself, and 3.33% to "bounty and community rewards," with a total maximum supply of 90 million OAK. OAK cannot be mined, and there will be no new OAK generated at a later time. As of this writing, the Acorn website indicates that "due to regulations in the U.S. and China, [the Acorn project is] unfortunately unable to accept contributions from those regions" for the ICO event. Whether or not the platform will be available to investors in the U.S. and China remains to be seen; if not, this could put a damper on Acorn's aim to democratize the crowdfunding process by making free crowdfunding available to investors and projects the world over.