Inspiration for the birth of Colony Lab (CLY)

Have you ever heard of the concept of “risk investment”?

Venture capital is the process by which investors fund areas with outstanding growth potential in the future, helping companies at the start-up stage research and develop technology and optimize products to quickly commercialize the product and expand the market.

And this concept exists not only in the traditional financial market but also in the crypto market. Although the concept has existed since the 19th century, the way the industry operates is changing rapidly, especially with the advent of the Internet and now the explosion of decentralized financial markets (DeFi).

With the development of the Internet, it has completely changed the ability to distribute information and value, helping retail investors have the opportunity to access investment opportunities before other investors. A large investment fund

Colony has found a new direction when it comes to combining an organized investment process with the decentralized nature of Blockchain technology. Specifically, it combines the professional investment expertise of the project team with the direct input of the community in the decision-making process. The Colony will focus primarily on early-stage investments in new DeFi projects on Avalanche

What exactly is Colony Lab ?

First of all, let’s learn about Avalanche!

You can understand Avalanche is an open source platform that enables the deployment of highly decentralized applications, financial products, digital assets, and interoperable blockchains.

Avalanche is one of the most popular platforms for building decentralized applications, or dApps. It is similar to Ethereum in that both are based on smart contracts. However, Avalanche has many advantages over Ethereum, including significantly lower transaction fees.

Avalanches also have the advantage that the transaction time is quite fast. It is based on a proof-of-stake authentication method rather than a proof-of-work, making it more energy efficient and more environmentally friendly than leading industry competitors.

Avax is the native token on the Avalanche platform. Avax is tied to the operation of the Avalanche network. Ensure security, pay for operations, and offer a variety of services.

So what exactly is Colony Lab ?

  • The fund specializes in investing in projects that are in the early stages of the Avalanche ecosystem.
  • Besides providing liquidity for DeFi protocols, this project also establishes a set of indices aimed at tracking the top projects in the Avalanche ecosystem.
  • Perform network validation through a staking mechanism.
  • A new venture capital fund, Colony enables retail investors to invest in potential projects that are in the early stages of development, a privilege that is only available to venture capital funds and angel investors. investors). Angel investors are usually wealthy individuals who provide capital to startups, often with their own money.
  • The project has the Avalanche Foundation behind it to promote becoming a community-based DAO and help potential projects build on the ecosystem.

What is the open governance mechanism in Colony?

An open governance mechanism allows ordinary investors to participate in the investment process and enables the community to directly participate in the investment decisions of the project, ensuring a reasonable allocation of capital.

The community will benefit from all the returns on investment through features such as airdrops, staking rewards, liquidity provision, or deflationary buyback mechanisms.

Mechanisms of Colony

You can understand Colony as a liquid fund; it holds assets and invests them in different projects. These projects are either startups or already established protocols/projects on the Avalanche network. This also makes it one of the best platforms to invest in DeFi crypto.

Colony’s operating structure is based on two main pillars:

The early-stage program

That means Colony will invest in new projects in the Avalanche ecosystem, financially supporting and helping the project develop. The project development team, who are experts in the field of asset management, will directly control the process of selecting and investing in projects.

A decentralized organization (DAO)

From DeFi to NFT and fields like music, entertainment, and sports, Cryptocurrencies are attracting a fast-growing amount of value. To access this piece of cake more easily, creating DAOs with the participation of many parties will help complement each other in terms of capital, experience, relationships and many other factors. It means that the DAO helps members easily access, verify, and participate in the decisions of the organization.

In the case of Colony Lab, a community-controlled DAO is in charge of investing in the development of Avalanche and the projects built within this ecosystem.

The community will hold half of the colony’s capital to directly invest in the following areas:

  • Directly invest in the Avalanche blockchain with a 10% investment in the Validator program.
  • With the goal of increasing the security of the Avalanche system, the Colony will use 10% of the capital to run validator nodes, and the rewards from staking will be divided back to the community.
  • 10% of investments in the index basket (the top 10 projects in the ecosystem) are run entirely by the community. Funds will be allocated through governance.
  • 30% is used as liquidity to invest in DeFi protocols in the Avalanche ecosystem.

What is CLY token?

Token holders give money to the system, and in return, the system allocates them tokens that they can use to earn rewards.

Members can also use them as administrative tokens. When the system hands over power to the members, these tokens will represent voting rights.

The system will also be able to redeem these coins, which will appreciate in value. So, members can also earn by trading their CLY tokens for other digital assets or fiat currencies.

Members can also stake their CLY tokens to earn AVAX coins as rewards.

Potential for Colony Lab’s development

Colony strives to enhance the value of creativity on the Avalanche network, and it offers a refreshing mix that many find worth the investment. At the very least, there is an attractive policy of maintaining a decentralized community system.

With the combination of a project team rich in expertise and the strength of the community, Colony has the ability to create a decentralized, democratic ecosystem that puts the interests of users first.

Since their inception, Colony has enjoyed steady revenue growth, and currently, they show no signs of stopping. Rather, they are increasingly integrating their recommendations and principles into the Avalanche ecosystem.

If you still feel skeptical about investing in Colony, keep in mind its unique functions. Plus, their team of experienced crypto experts is ready to assist you with this task, so rest assured!

See ya in the next article !

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