The City "On Point"By Federico De Arteaga | Mon, 05/16/2022 - 09:00
As chef Francis Mallmann says, "à point is probably, as a cook, one of the most beautiful sayings in the French language. It means ready; it means on time, ready; ready for what ... for the search."
It is time for cities to be ready. And to be ready, they have to be sustainable. An important part of that is economic sustainability and that requires projects. Not roadmaps and not large governance spaces, which are also necessary, but projects. The call in itself is not enough. There must be projects and they must be economically sustainable because if they are not, sustainability elsewhere cannot be achieved, whether it is sustainability in prices, in evidence or in all the variables involved. Sustainability must be contained, it cannot be an abstract issue. It must be made tangible and understood in its complexity.
There is a lot of talk about participation, that the community should make itself heard. For what? The issues of cities are not soccer matches. They are technical, emotional, values, traditions, authenticity and real commitment, not irrelevant activism.
How to Participate?
There are many known mechanisms for financing projects but, basically, they refer to the first investment in a startup, but then that startup must be sustainable. Experience shows that a high percentage of them are not, and they collapse when the initial investment is depleted.
Generally, financing comes from the government, private entrepreneurs or international organizations. However, another type of project financing is needed and it must come from the people. That mechanism is "crowdfunding," which has been evolving for years and has done so in a way that makes it increasingly relevant for the effective participation of a community to finance and make their projects sustainable.
What Is Crowdfunding?
In a presentation on the topic at the Digital Content Event Colombia 4.0 in May 2022, Nicolás Contreras, CEO of VAKI, gave an overview of the state of the art of crowdfunding as collective financing from people who believe in a cause, in a project, and who want to solve something in their city.
Crowdfunding has different modalities: Sponsorship; Donation; Reward; Debt; Equity; and Political. The crowdfunding market is expected to grow to $125 billion by 2024. All these modalities combined can make cities largely community-funded, with a high sense of ownership. The important factor is that the much-talked-about participation moves from indignation to action; that in the projects they create, they contribute economic resources and that they are part of it. There has been a disconnection between the instances of participation and action to generate results and impact. A project can be financed by a thousand people and a company or by 10,000 people and can range from projects to sterilize street dogs or producing a book, to planting a crop or implementing large water projects, paying for connectivity in a marginalized area, or combating school malnutrition, among others.
Crowdfunding and Tokenization
The fundraising revolution continues as crowdfunding is entering a new stage with more efficiency and transparency thanks to tokenization and blockchain technology.
Tokenization is defined as the representation of any asset or right to an asset in a digital state, commonly referred to as a token. There are three main types of tokens: security tokens, utility tokens and currency/payment tokens. The widespread adoption of tokenization for crowdfunding can be attributed to its far-reaching benefits, which are greater access to liquidity, greater efficiency, the ability to raise funds faster, more security and transparency, automated fulfillment and versatility.
Crowdfunding through tokenization supported by blockchain technology has changed the fundraising equation. So; project on project, platform on platform is how sustainability works, with many projects at scale in the same area and no dispersion of resources. A community working for its community, taking ownership of where it lives. No government, no private company, no matter how big they are, can solve problems if the community does not act.
Think of a city like Tequila that has been certified as a Smart Tourist Destination, with integrated and scaled technology, advanced sustainability, accessibility, innovation, technology and governance; where society has been energized and where entrepreneurs have connectivity and big data; and with a community that is beginning to demand improvements in line with the progress of the city. These crowdfunding and tokenization mechanisms will be able to free up an amount of resources to support the projects that the people of Tequila demand and in which they themselves are part of the solution. That is true governance, not just in words but by mobilizing resources and demanding compliance in the use of those resources.
Therefore, it’s time to be ready, at the right time and well prepared, with effective language, technologies at scale and knowing that a city is a society in movement, dynamic, changing, and where each variable of the system has “à point.” The more sense of belonging there is, and the more people invest, the more ready it will be.