Blockchain is a groundbreaking technology altering the world. Its perks have attracted the attention of people globally, which has its advantages and drawbacks. With the expansion of blockchain adopters, the crypto universe is turning into a dog-eat-dog environment. Outsiders and existing users are looking for a sanctuary that could allow them to manage their wealth, execute private transactions, and access top-notch legal and financial services.
One model that can solve many of the challenges that multiple crypto investors confront, is the cooperative’s structure.
In the traditional sphere, the cooperative model is widely known in a variety of industries, but in DeFi, there are now just a few options of a comparable structure. Generally, a traditional community that believes in this concept tends to succeed faster than others that use alternative business models. They have access to better services, fundings, intellectual power, and other resources. Incorporating a multi-billion dollar model into the blockchain industry may not be a bad idea because it has already worked wonders for centuries.
What is the Cooperative Model?
A Cooperative institution is a legally owned platform that allows its community members to decide what happens, while enjoying state-of-the-art services and perks that may have been unseen if they had done things individually. As a partnership, participants have a common goal that could be the production or consumption of a particular set of products. By collaborating, they enjoy the benefits that accrue from economies of scale. They can gain a global presence and access asset management structures that are available to members only. It is easy for a cooperative community to lobby to make beneficial changes in their field because they have the necessary numbers and funds.
How Does The Model Improve The Blockchain Realm
A basic principle of this model when it is implemented into a decentralized ecosystem is that the users of the platform make decisions concerning its welfare and operations. It is common to see those that benefit from a system trying their best to ensure that it is sustained and blossoms. If this model had been incorporated since time immemorial, many crypto platforms that deteriorated because of bad decisions may still be in existence. Using a typical traditional organization as an example, if the directors own a percent of holding in the company, they tend to make expansionary decisions for the organization. On the other hand, if the directors are merely agents of the shareholders, the decisions they make will favor them to the detriment of the organization because they have no percentage of ownership in the business. This is classified as agency conflict in the popular financial management theory – Agency Theory.
Some perks that the cooperative business model will offer to decentralized finance and crypto users will be discussed.
• Economies of scale.
Data is power, and those with access to the right source have a better chance of succeeding in this fast-paced industry. One thing that smart investors, traders, and crypto enthusiasts tend to do is to join groups with like minds to search for information that may not be readily available to the public. At the moment, these groups are scattered on social networks like Telegram, Discord and Reddit. Sometimes, it is not easy to sift out genuine information from the noise.
The blockchain realm needs an organized community of users that utilize the cooperative model to plug themselves to the right source of on-chain and off-chain data sources. Doing this alone may not be an easy feat because of the expensive cost that results from its operations.
An ecosystem that uses the cooperative model can make this possible since the operational cost plummets via service sharing, thereby increasing purchasing power.
• International investment and asset management programs
The noise that rushes in once a person steps into this industry is scary. It is difficult to tell those projects are in for the long haul from those that belong to the groups of one-hit wonders. In the traditional finance world, there are financial cooperative systems that help investors to properly manage their assets and dodge pitfalls. Something similar to the aforementioned can be enjoyed in the crypto market.
• A growing and elite network of members
Networking drives innovations and makes it easy for people, brands and even investments to blossom. Being in the right network could improve one’s prospects and open them to opportunities that they didn’t know existed. They can access legal advice from experts in the field, and bask in financial tips from finance maestros.
• Fast and secure local/international transactions with zero fees
When the concepts of decentralized finance and blockchain were initially communicated to the world, they claimed that they held the wand to near-zero fees and fast transactions, but that is not the case in many platforms. Having a system that uses the tenets of communalism offers new investors and even expert ones access to a transaction architecture that offers fast transactions and affordable fees because they can build a financial system that favors them and their transactions.
The innovations that are open to those crypto enthusiasts that join a decentralized finance ecosystem that uses this model are out of this world. A cooperative business model in the crypto world is necessary. Only very few platforms offer this, and the one that comes closest to the features that are listed above is Privateum.
Privateum is the first-ever legally protected private assets management system that has created a Cooperative hub for crypto enthusiasts, investors, traders, financial entities, legal platforms, and other participants in this industry.
It allows them to seamlessly manage their transactions and digital assets in a secure and legal haven, while enjoying astute financial services that are unseen anywhere else in the ecosystem.
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