Funding Public Goods Using SAFT
One of the solutions to the Challenges in funding public goods is to use SAFT contracts, which allow for flexibility in the timeline. SAFT stands for Simple Agreement for Future Token and is a token version of Y Combinator's SAFE. It is a contract that allows investors to invest in the right to distribute tokens when they become valuable. Sota_Web3 provides additional information on SAFT and its significance here(https://twitter.com/Sota_Web3/status/1399724434181656576?ref_src=twsrc%5Etfw June 1, 2021).
It's important to note that Y Combinator's SAFE is a term used for investing in securities, while SAFT is a purchase agreement for pre-purchasing tokens. In the case of SAFT, investors agree with the company that the tokens will be distributed after the network (e.g., Layer1 blockchain, protocol) becomes operational. 9dai_5 provides further clarification on this distinction here(https://twitter.com/9dai_5/status/1399896901785329671?ref_src=twsrc%5Etfw June 2, 2021).
Many popular projects such as Uniswap, Compound, and Near have used SAFT for fundraising before launching their tokens. This method allows for funding product development before the token launch. However, there have been no known projects in Japan that have utilized this fundraising method. Sota_Web3 discusses this observation here(https://twitter.com/Sota_Web3/status/1399725390919315467?ref_src=twsrc%5Etfw June 1, 2021).
When engaging with foreign investors, it is common to be asked to share SAFT contracts. While we have also raised funds from top international VCs, we will explain the process and methods at a later time. SAFT has become a standard practice in the international community, and it is crucial for entrepreneurs and investors to understand and discuss it. Sota_Web3 emphasizes the importance of this here(https://twitter.com/Sota_Web3/status/1399726052801400837?ref_src=twsrc%5Etfw June 1, 2021).
I agree. Currently, there is a dichotomy between globally raising funds through SAFT and listing, or domestically raising funds through equity investors and conducting an IEO. Both challenges are commendable, but personally, I support Sota Watanabe's endeavor to reflect the value of the product in the chart once it is listed. kyanagisawa expresses their support here(https://twitter.com/kyanagisawa/status/1411037765492371457?ref_src=twsrc%5Etfw July 2, 2021).
For more information on the differences between ICO, IEO, and STO, please refer to the relevant discussion.