Crowdfunding Satellites With NFTs
Updated: May 6
Why own an entire satellite when you can pay a fraction of the cost and still launch it into orbit? According to Globalcom, the current price tag for launching vehicles, shuttles, satellites, and other equipment, ranges from $10 million to $500 million. Satellites have an additional yearly bandwidth cost of up to $1.5 million without counting repair and maintenance. These prices are the primary reason why government organizations with almost unlimited funds have been at the forefront of space exploration. But the private sector is catching up.
Crowdfunding has seen a meteoric rise in popularity over the last decade, with $34 billion raised globally in 2020. It has been used with great success in every industry, including the space industry. In 2017, Russian students from Moscow State Mechanical Engineering University crowdfunded a satellite launch through a popular crowdfunding platform. While they raised $33,000, the legacy system did not provide anything beyond that one launch, to the students or those who donated money. Distributed Ledger Technology (DLT) offers a new and improved way to crowdfund with tokenization. Specifically, Non-Fungible Tokens (NFTs) can convert the value of a physical asset into a digital token that shows trackable, provable, and transparent ownership.
There is now a greater demand than ever for low-cost access to space. In January 2021, a SpaceX Falcon 9 rocket sent 143 small satellites into polar orbit on a "rideshare" mission with multiple large companies: a new global record for the most objects launched on a single rocket. Another 60 satellites were launched on April 28th. SpaceX charges a comparatively low $1 million to launch a 440-pound satellite and an additional $5,000 for every 2.2 pounds above that. And SpaceX is not the only one. Spacefund highlights another 162 companies ready and willing to send satellites into space in their launch database. These companies need customers who aren’t priced out of the market, which is where new financial tools like NFTs come in.
NFTs offer fractionalized ownership of satellites so more investors can participate in the new Space Economy. They can also represent a future right to a service or product, and be used to sell data storage and transmission between satellites and ground stations. Both types of NFTs cannot be counterfeit, and digital contracts can pay out dividends to the token holders or issuers.
NFTs include other benefits over traditional ownership transference:
No geographical limitations
Reduce the need for intermediaries
Improve investment liquidity
Offer fast transactions
Potential for automated compliance
An accredited investor can look over the details of a satellite, make sure it passes all safety regulations, buy it quickly on the private market, and even design a contract that pays out dividends from the satellite use. Companies can specialize in creating components for satellites and tokenize them to retain partial ownership. NFTs can commercialize space exploration faster and more efficiently in the coming decades. The funding technology is already built. It just needs to be applied in a new way.