A year and a half after raising $3 million from investors, social network platform TruStory is shutting down, announced founder Preethi Kasireddy in a blog post published last week. Kasireddy said the token-based digital debate platform was closing because its business model is “unsustainable”. Kasireddy said investors will be returned their money.
“In order to build a sustainable business, TruStory would need millions of users who can readily purchase tokens (legally) and seamlessly use them on the platform daily. While we believe we can capture a small niche of users, we don’t believe it’s large enough to build a sustainable business,” said Kasireddy in her post.
TruStory allowed users to participate in debates by staking tokens called “TRU”. Users who wrote compelling arguments on the platform earned tokens, while those who “misbehaved,” lost them. The goal, said Kasrireddy, was to crowdsource the best arguments on both sides of any issue.
“Right now the market is not mature enough for the tokenized future we believe in. Launching a token in a regulatory-friendly way is still a nightmare,” said Kasireddy.
“In order to distribute and use the token as prolifically as needed, we needed much better infrastructure (e.g. crypto wallets) and more seamless authorization solutions (i.e. transaction signing). Especially for a consumer facing application where speed and convenience are paramount. Unfortunately, the solutions out there today are nowhere close to what we need.”
She said the number of people who know about crypto, let alone who are willing to buy for a reason other than to “pump and dump”, is tiny. “Crypto today is little more than glorified gambling. The idea that you can use crypto for other (very innovative) things is still foreign to most people. In order to build a sustainable business, TruStory would need millions of users who can readily purchase tokens (legally) and seamlessly use them on the platform daily. While we believe we can capture a small niche of users, we don’t believe it’s large enough to build a sustainable business.”
Investors in TruStory include True Ventures, Pantera Capital and Coinbase Ventures.