Investment Smart Contract

The Concept

For every investment deal signed on Crypstarter, an Investment Smart Contract (ISC) is created to govern the investment for its lifetime. The ISC guarantees that investors are rewarded when making an investment and that startup owners' raised fund are protected and disbursed in a timely manner. This is a special mechanism only available on the Crypstarter ecosystem, making investment participation for startups extremely safe and attractive for investors. Unlike conventional investment models or other crowdfunding platforms, Investors participating in the Crypstarter ecosystem receive various economic benefits that are not available on other platforms.

How it works

  1. After finished their investment, the investors will receive the Crypstarter Investor's benefits

    1. Company shares

    2. Project tokens

    3. Proof of investment (POI)

  2. The invested amount is then transferred to and held by the corresponding ISC. The ISC stake any amount not yet disbursed to the startup owner to earn interest, and the interest is forwarded to the investor every epoch. The rewards to the participating investors are distributed proportional to the amount of shares they hold at the time of distribution.

  3. The CST staked by ISC is always backed by the investment amount so that startup owners don't have to worry about depreciation of the fund raised via CST. At each disbursement milestone, where startup needs to meet certain conditions as laid out in the deal, the fund is unstaked and sold to the treasury at the backed price to obtain USDT, which is then disbursed to the startup owner. The treasury burns the CST that they buy back from ISC to reduce the supply of CST.

  4. The ISC is destroyed when the startup owner has reached all the agreed milestones and has the fund fully disbursed, or when the startup fails to achieve the milestone and the deal is cancelled. In case of deal cancelation, the fund is unstaked and returned to the investors.

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