Don’t call it an ICO: Civil launches its blockchain publishing platform

Following an unsuccessful token sale last October, Civil has regrouped, revised, and relaunched. Here are the details.

Civil, a blockchain-based, community-run journalism network, is officially opening its doors to the public on Wednesday.

What that means is, starting today, anyone anywhere in the world who wants to join Civil—either by becoming a member or by creating their own Newsroom—can now sign up. An open-enrollment process allows one to gain access to the Civil Registry and the various tools that it offers.

But to use Civil, you’ll need CVL tokens—the network’s native cryptocurrency. And after learning the hard lessons of a failed ICO last October, Civil is now taking a different approach to get those tokens in the hands of its members—which anyone can become, not just “accredited investors.”

“We’ve created this notion of a membership experience, which we hope feels very similar to any other kind of membership to a cause-based organization,” says Matthew Iles, CEO of the Civil Media Company—the founding entity behind the decentralized platform. The experience, however, comes with one “unique element,” he adds: “By becoming an owner of CVL tokens, you are not just a sideline contributor, but you are, in fact, a part owner of this platform.”

Civil initially planned to launch four months ago but suffered a setback when its initial token sale fell well short of its self-imposed $8 million soft cap. The company’s revised strategy smooths out what was previously a deliberately difficult process to purchase its tokens, and removes what Iles now considers the “distractions” that plagued the initial sale, including any hard cap, soft cap, or time limit.

“We are not even referring to this as a token sale,” he says. “This is the launch of Civil memberships. You can buy a Civil membership tomorrow, the day after, or years from now. There is no time limit. There is no ‘we need to get this by this time or it fails,’” says Iles. “It should feel as close as possible to a standard e-commerce experience, save for the fact that you’re buying cryptocurrency.”

How to join Civil

Iles admits that Civil’s token remains a core part of the network’s philosophy—it is, after all, the technology through which journalists and the public they serve become “owners” of the platform and make decisions about how it’s governed.

Various actions on the network—such as lodging a formal complaint against an unethical newsroom, upvoting and downvoting content, or tipping journalists—require a specific amount of CVL to perform.

However, Civil is making a conscious effort to downplay the tech and focus on its mission: finding ways to fund and support independent journalism.

“We’re trying to bring blockchain and tokens into the conversation only when it’s absolutely necessary,” says Civil’s CEO. “It’s not really about the technology. It’s about what it can do.”

In this vein, anyone who wants to support Civil, but doesn’t necessarily want to engage with the CVL token, can opt to become a “non-voting” member by making a direct contribution to the Civil Foundation—the nonprofit created to support Civil newsrooms and funds projects through grants. (The Civil Foundation will also receive 100 percent of the net proceeds from the sale of CVL tokens.)

Non-voting members still get access to the Civil community, says Iles, “but you simply don’t receive CVL tokens, and so you won’t get to participate in any of those deeper community-run aspects of the experience.”

To become a full member, the process of buying CVL tokens has been simplified relative to Civil’s last go around, but it still requires a fair bit of knowledge of blockchain products and cryptocurrency. For example, anyone interested in joining Civil will first need to purchase ETH from an exchange and set up a MetaMask account.

Once you’ve got that in place, your first step is to create an account on Civil.co by providing your email address. Then, you’ll need to connect your token wallet to the account. After that, complete the Civil tutorial, which ensures that all prospective members understand the basics of crypto, the Civil platform, and how CVL tokens are intended to be used on the Civil network. Unlike the quiz that Civil used during the last token sale in October, it’s impossible to “fail” this tutorial. It’s designed to teach you about Civil before you purchase your membership, rather than test your knowledge.

At this point, you can purchase CVL directly from the Civil website using Airswap. (If this is your first time buying ETH, Civil will guide you through the process of doing so on either Coinbase or Gemini.) The price of CVL will start at $0.20 per token and will go up slightly with each sale until the last one is snagged for $0.94.

As soon as you receive your tokens, you can begin making use of the Civil Registry and the various tools that it offers members.

For Newsrooms, the process is similar, though it will require a minimum purchase of $1,000 worth of CVL tokens. “Any newsroom that is joining Civil does need to stake $1,000 worth of tokens,” explains Vivian Schiller, CEO of Civil Media Foundation. ”That goes for every newsroom. However, we are fairly liberally giving newsrooms grants to cover the amount that they need to stake and then some—a little bit more for good measure, in case they get challenged.”

Schiller says Civil has commitments from at least 100 newsrooms to begin joining the network when it goes live on Wednesday.

Token economics, deterring speculators, and the SEC

For prospective members, the sale is open to anyone and everyone, and there is no minimum purchase or limit as to how much CVL you can buy. The more you contribute, the more tokens you’ll receive and the more influence you’ll have on the network.

But the fact that the sale is available to one and all—namely unaccredited investors in the United States —might raise eyebrows among those who have been following the actions of the U.S. Securities and Exchange Commission in this space.

While Civil doesn’t regard the launch of its memberships as a “token sale,” there are nevertheless tokens being sold and cryptocurrency being transacted—so what’s to stop a regulator from confusing it for an “unregistered ICO”?

Iles says Civil, ConsenSys (which funds both Civil and Decrypt), and their “collective legal teams” are confident that they have done more than enough for regulators to determine that Civil’s token is a consumer product. “And as such,” says Iles, “anyone ought to be able to become a member of Civil—not just accredited investors with a net worth of $1 million.”

Iles insists that Civil’s token has a clear function within its network and is in no way intended to be a speculative instrument or an investment product. The tokens are the software that operate the Civil platform, he says. “It’s the only technology that can allow you to join Civil.”

Beyond the technological reasons for why Civil believes the sale of its token ought not to fall under the purview of the SEC, Iles says there are restrictions in place to deter speculators and ensure no one is buying CVL to turn a profit.

“For at least the first few months, until we become more decentralized, you need to unlock your tokens,” he says. “This was previously referred to as ‘proof of use.’ You need to actually stake your tokens within the voting contract of the Civil Registry to demonstrate that you are using them or intend to use them as directed, before you’re able to transfer them any place or sell them.”

In addition, during this time frame, CVL tokens will only be available to be bought and sold from other Civil members. “This means that for at least the first three months, you won’t see CVL tokens on any open exchanges where speculators could choose to buy and sell the token based purely on price movements and completely divorced from what it’s actually for,” says Iles.

Responding to the critics

Whether the precautions Civil has taken is ultimately enough to satisfy the SEC remains to be seen—but regulators might not even be Civil’s toughest crowd to please. Ironically, much of the harshest criticism levied at Civil over the last few months has come from the very people that the network aims to support: journalists and the media companies that employ them.

Media organizations across the web, from Ars Technica to the New York Times, wasted no time in scorching Civil over its “bumbled” token sale and failed launch last fall. (The New York Times headline “Alas, the Blockchain Won’t Save Journalism After All” was especially cutting.)

“You know, it’s a fine line between skepticism and cynicism,” says Schiller. A lifelong journalist herself, Schiller says she understands that skepticism is in many ways “the coin of the realm.”

“We should always be skeptical as journalists. But, occasionally—and I find this often happens with journalists when talking about our own industry—I find that cynicism often starts to creep in. And it’s really a shame.”

Civil is new. It’s different. And blockchain technology itself isn’t exactly the easiest thing in the world to get your head around. It’s completely fine and appropriate to question whether such a thing could ultimately work, she says. “But we’re in an environment where the fundamental rules and dynamics that have sustained journalism for a long time are failing us.”

Indeed, one need only look at the thousands of journalism jobs that have been lost in the last two months alone—with mass layoffs at Vice, BuzzFeed, Huffington Post, and others—to see such failures.

Says Schiller: “Speaking for myself, I would rather try to do something new than just sit on the sidelines and throw shots at others saying it’s never going to work.”

https://decryptmedia.com/5519/dont-call-it-an-ico-civil-launches-its-blockchain-publishing-platform

Join our newsletter

The best of Decrypt fired straight to your inbox.

The Daily Debrief

Get the top commentary on the news that matters delivered to your inbox

What

An oh so clever take on the day’s 3 top stories.

Who

You friend, if you want to know what’s what.

When

Each morning with your ☕.

Why

Because a young writer's career is on the line.