ConsenSys Will Pick Up the Tab for Civil’s Newsrooms in Token Sale Do-Over

As fans of media and blockchain are well aware, Civil’s token sale was a huge disaster.

At the close of the sale window, the much-hyped blockchain journalism startup had raised only $1.45 million—far from the $8 million soft cap needed for the project to launch.

To make matters worse, the vast majority of the funds raised—$1.1 million, or just over 75%—came from ConsenSys, which had already sunk $5 million into backing Civil in the early stages.

Before the disappointing sale even occurred, Civil had announced the details of the first 14 newsrooms that would run on the platform. From locally-focused news at Block Club Chicago, investigative outlets like Sludge, and quirky “alt-daily” Popula, editing and reporting teams were assembled and the content was starting to flow.

Meanwhile, since the cap wasn’t reached, Civil has stated that it will be providing a full refund to everyone who bought into the crowd sale.

Which raises the question, will these existing newsrooms close? And if not, who will pick up the tab?

The answers, in order, are “no”, and “ConsenSys” (again).

As media industry publication Nieman Lab reported, the lucky 14 newsrooms will receive additional funding to the tune of $3.5 million from their generous backer, which has committed to buying that amount of tokens in a second-round token sale. Wait, what?

That’s right: if you didn’t catch it, the answer to Civil’s ill-fated first crowd sale is another crowd sale.

Honestly, it’s not a terrible idea. There’s a lot of goodwill toward Civil in the media industry, even if people don’t understand the blockchain aspect of it, and people genuinely want to see it succeed. That’s not least because journalism is still in the grip of the painful transition from print-first to digital-first, and revenue is way down as a result. Innovation is required to figure out new business models. Crowdfunding can work, actually; it just shouldn’t be really, really complicated to give someone your money.

Taking heed of criticism, Civil CEO Matthew Iles has assured us that a “new, much simpler token sale is in the works,” which shows that he has at least some understanding of how many hoops he was asking funders to jump through. It will be revealing to see where the soft cap is set for round two of the sale, given that $3.5 million is already in the bag: too low and Civil will seem to lack ambition, relying on ConsenSys’s deep pockets; too high, and they risk a repeat of the first flop.

People want digital journalism to succeed, but they aren’t yet convinced that blockchain is the way to do it. Civil might be the company to change that, but if not, the search for a new model will go on.