Donation-based Crowdfunding Application

using Blockchain
Rohit, Awadhesh Kumar Verma, Saurabh Kumar Prajapati, Ramashankar Maury, Astitva Singh
Department of Computer Science and Engineering
Institute of Engineering and Rural Technology
Prayagraj, Uttar Pradesh, India
rohit@[Link], {vermaavd17476765, saurabhkp2001, mauryramashankar, astitvasingh009}@[Link]

Abstract—Crowdfunding has become a popular way to raise Reward-Based Crowdfunding, Equity-Based Crowdfunding,
funds for various causes. It is used for charitable causes, creative Donation-Based Crowdfunding and Debt-Based Crowdfunding
projects, and other non-profit initiatives. The crowdfunding are the types of crowdfunding. Donation-based crowdfunding
application developed without blockchain uses intermediaries to
connect backers and creators. The dependency on intermediaries is becoming popular worldwide. It is the second-largest type
cause the challenges like lack of transparency, mutability, cen- crowdfunding and growing rapidly. Donation-based crowd-
tralized authority and high fees. It makes difficult for donors to funding is a fundraising method where individuals donate
know how their money is being used. small amounts of money to support a project, cause, or individ-
Integrating blockchain technology in the platforms can address ual without expecting any financial return [2]. Donation-based
the above mentioned challenges. The paper proposes a donation-
based crowdfunding system using blockchain. Blockchain pro- crowdfunding helps business owners, NGOs or individuals to
vides the method of recording transactions and monitoring assets. raise campaign for various purposes through digital platforms.
The proposed system is able to provide features like transparency, Non-profit organizations use it to raise funds for societal
immutability, decentralization etc. It makes more secure and effi- improvement. It supports various projects, such as start ups,
cient option for managing donations using smart contract. Smart addressing societal issues, handling medical emergencies, and
contract records transactions across a network of computers in a
secure and transparent manner. It is programmed with the terms developing new products. [3].
of the agreement and releases funds only when specific conditions Current crowdfunding platforms charge high fees and some-
are met. Blockchain technology enables peer-to-peer transactions times prone to scams. Using blockchain for donation-based
without the need of intermediaries. It reduces transaction cost crowdfunding can solve these problems. Platforms like Kick-
and minimizes the risk of fraud or mismanagement. The system starter, Indiegogo and GoFundMe cost high fees for making
provides clear accountability and transparency for donors. It
ensures their contributions are used as intended. transactions. Peer-to-peer smart contract can eliminate the
Keywords: Crowdfunding, Smart Contract, Blockchain, traditional transactions and platform fees. [4].
Ethereum, Transparency Metamask, Decentralization, Im- The paper proposes a blockchain-based platform for
mutability, Solidity, fundraising through donations. Its aims is to offer a private, se-
cure, and decentralized method. The primary aim is to support
I. I NTRODUCTION effective contributions from donors. Smart contracts provide
Crowdfunding is the practice of funding a cause or venture regulation of donated funds. It enable effective distribution of
by raising money from many people, commonly supported funds for projects .
through online platforms [1]. Figure 1 shows the phenomenon Evolution of Crowdfunding:
of crowdfunding for causes and projects by contributing
money from many people.

Fig. 1. Crowdfunding Phenomenon Fig. 2. Evolution of Crowdfunding [5]

Crowdfunding might appear to be a recent concept but as contract is a transaction protocol. It records and manages
Figure 2 is showing, it’s actually a traditional concept. It has transactions on behalf of donators and campaign creators.
been in use since 1700’s. In modern day crowdfunding, people
and businesses raise small amounts of money from a large
group of people. They usually raise campaigns online and
has its origins in 1997. The term ”crowdfunding” was first
documented in August 2006 by entrepreneur Michael Sullivan
[5].
Literature Review
Siriphong S. et al. [6] developed an crowdfunding applica-
tion which enables NGOs or individuals to receive donations
for charitable purposes. It also supports the business projects
and other causes. Smart contract of the platform are developed
using solidity programming language. It can be accessed
through social media and other online platforms. The approach Fig. 3. Architecture of Proposed Sysetm
effectively expands the reach to a large number of potential
sponsors. The study concludes the need of transparency and Smart contract automatically carries out all transactions. The
accountability in the platform. It also emphasizes the advan- Ethereum Blockchain is the foundation of the decentralized
tages of using blockchain technology. application. It stores all campaign data, donations and finances
Gubaev R. et al. [7] proposed a blockchain platform for on an accessible blockchain network [10].
charitable foundations. It facilitates a reliable network for Ethereum
collecting financial donations. The network consists of highly
Ethereum is a blockchain based open-source software ap-
credible and prestigious organizations. The platform utilizes
plication. It enables to develop and deploy decentralized
blockchain’s immutability, provenance, and authenticity to
applications. Main components of ethereum are blockchain,
ensure complete transparency of operations. The transparency
ether, smart contract, ethereum virtual machine, decentralized
helps expose and reduce fraudulent activities.
applications etc.
Lee Braine [8] proposed a crowdfunding system developed
using Blockchain technology. In the system, Campaign raiser Solidity
create campaigns and bakers contribute to their campaigns. Solidity is, a high-level, an object-oriented and a scripted
They receive funds based on bakers’ approval through voting. programming language. Smart contracts are written using
Fundraisers can write a description to show how they will use this programming language. It combines web development,
the funds. Backers then vote for or against these requests. If assembly language, and networking concepts [11].
most backers approve, the funds are given to the fundraiser.
Smart contracts manages these transactions between fundrais- Smart Contract
ers and investors. The smart contract is a self executable piece of code
Huasheng Zhu and Zach Zhizhong Zhou [9] suggested, an which is implemented on a blockchain platform. It facilitates,
equity-based crowdfunding is a new way of raising fund for executes, and maintains the conditions outlined of contract
startups through internet. Their application has lesser barriers or agreement [12]. In an application, it can consist account
for users to get entered. It is also able to reduce cost and balance, personal storage and an executable code. The smart
increase speed, which encourages innovation. In the recent contract status is stored in an interconnected blocks of chain.
years, in China equity crowdfunding has experienced some Whenever the contract is called, its status is updated [13].
developments. However, there are some problems that remain
unsolved in practice. MetaMask
MetaMask, an Ethereum wallet works as an extension for
II. A RCHITECTURE OF PROPOSED MODEL
web browsers. It provides an easy to use platform, for handling
Earlier crowdfunding platforms rely on a few central or- Ethereum funds and engaging with application. To get started
ganizations. The central organizations manage the entire pro- users need to set up a wallet on MetaMask [11].
cess of allocating funds and handling project documentation.
Centralized approach raises concerns about confidentiality and III. M ETHODOLOGY
potential leaks of sensitive information and the intermedi- Creator define their projects, fills the details of campaign
aries charge high [Link] used blockchain technology to like title, description, target amount etc. which gets deployed
address above issues. Blockchain allows us to store all private using smart contracts. Figure 4 shows how Contributor browse
documents securely on a single chain. In respective chain, campaigns on the landing page, categorized for easy ex-
numerous transactions are involved. All the transactions are ploration. Donators contribute funds directly through their
managed and legally documented using smart contract. Smart Metamask wallets to the specified smart contract address.
 The ’Get Donators Function Algorithm’ retrieves the list of
donators and corresponding donation amounts for a specific
campaign identified by its index id providing transparency
into the campaign’s funding sources.
Donation to a Campaign Algorithm:
The ’Donation to a Campaign Algorithm’ allows users
to donate to a specific campaign identified by its index
number( id). The donated amount is added to the campaign’s
donations list, and the total amount collected for the campaign
is updated.

Algorithm 3 Donation to a Campaign Algorithm

Input: id of the campaign to donate
Output: None
Fig. 4. Flow chart diagram of Proposed model
1: function DONATE T O C AMPAIGN ( id)
The blockchain securely tracks all transactions, ensuring trans- 2: uint256 amount ← [Link]
parency and immutability [14]. 3: Campaign storage campaign ← campaigns[ id]
4: (bool sent,)
Campaign Creation Algorithm: 5: = payable([Link]).call{
The Campaign Creation Algorithm generates a new cam- 6: value: amount}(””)
paign using the provided parameters and returns the index 7: if sent then
of the newly created campaign. It requires the name of the 8: [Link]
campaign raiser, the amount of funds needed, the campaign 9: ← [Link] + amount
title, a brief story explaining the purpose of the campaign, 10: end if
and the campaign’s end date. 11: end function

Algorithm 1 Campaign Creation Algorithm Get Campaign Function Algorithm:

Input: owner, title, description, target, deadline, image
The Get Campaign Function Algorithm function retrieves all
Output: number of created campaign
campaigns stored in the campaigns mapping, providing access
1: function CREATE C AMPAIGN ( owner, title, description,
to information about all existing campaigns.
target, deadline, image)
2: Campaign ← campaigns[numberOf Campaign] Algorithm 4 Get Campaign Function Algorithm
3: require([Link] < [Link]), ”The Input: None
deadline should be a date in the future” Output: All campaigns
4: [Link] ← owner 1: function GET C AMPAIGN
5: [Link] ← title 2: Campaign[] allCampaign
6: [Link] ← description 3: ← newCampaign[](numberOfCampaign)
7: [Link] ← target 4: for i ← 0 to numberOfCampaign − 1 do
8: [Link] ← deadline 5: Campaign storage item ← campaigns[i]
9: [Link] ← 0 6: allCampaign[i] ← item
10: [Link] ← image 7: end for
11: numberOf Campaign ← numberOf Campaign+1 8: return allCampaign
12: return numberOf Campaign − 1 9: end function
13: end function

IV. O BSERVATION
Get Donators function Algorithm:
Implementation of blockchain in ’donation-based
crowdfunding’ enhances the donator’s confidentiality
Algorithm 2 Get Donators Function Algorithm
when contributing to a campaign. The nature of transactions
Input: id of the campaign in blockchain technology is transparent and immutable. As
Output: list of all donators a result, users have complete knowledge of the campaign
1: function GET D ONATORS ( id)
transactions [15]. Every transaction is recorded on a
2: return (campaigns[ id].donators, public ledger after being verified by the nodes which
3: campaigns[ id].donations) enhances transparency of the application. Figure 6 shows
4: end function
The comparison of transparency between platforms using
blockchain and without blockchain is shown in Figure a) Platform without Blockchain:
6. Donation-based crowdfunding platforms built using
Fee = x + (Percentage Fee × y) (1)
blockchain technology often have lower fees compared to
non-blockchain crowdfunding platforms. Figure 5 shows, where x is a constant fee charged by the platform and y is the
the decrement in fees is due to the decentralized nature of total amount raised.
blockchain and elimination of intermediaries.
b) Blockchain-based Platform:
On basis Platforms without using Blockchain Fee = x + (y × z) (2)
blockchain based
platforms where x is the gas fee, y is a fee for the deployment and
execution of smart contracts and z is the total amount raised.
Payment Most crowdfunding platforms Fees reduced
fees charge 5% to 10% of the to 70% - Transparency
total funds raised as their 80% [17].
fee. In addition to the plat-
form fee, there are payment
processing fees charged by
third-party payment proces-
sors like PayPal or Stripe.
Fees amount usually ranges
from 2% to 3% of the total
amount raised[16].
Time The system faces many prob- Time
Taken lems due to multiple inter- reduced
mediaries, high costs, lengthy by 99%.
processing times (1-5 days)
[18].
Transpar- In the crowdfunding plat- Provides
ency forms developed without us- 100%
ing blockchain, donors place transparency.
their trust in the transparency Fig. 6. Comparison of Transparency
of fund allocation and the
credibility of campaign orga- c) Platforms without Blockchain: Transparency is hard
nizers [19] [17]. to measure in numbers, but it can be judged by looking at
people’s review, platform’s reputation and third party audit.
Transaction Fees: d) Blockchain Platform:
No. of Public Audits and Verifications
Transparency = (3)
Total Transactions

V. C ONCLUSION
The crowdfunding platform relies on donation. Earlier ap-
proaches often lack in transparency and are vulnerable to
various behavior. Utilizing blockchain technology increases
transparency and minimizes the risk of fraud. It enables to
create a platform where individuals can safely contribute to
ongoing campaigns.
The use of blockchain guarantees decentralization of the
application. It ensures no single entity has complete con-
trol. Decentralized feature enhances transparency within the
platform. Transaction requests are verified through consensus
protocols among nodes, which ensures that no one can alter
the blockchain without permission. The decentralized method
builds trust among users.
Fig. 5. Platform fees charges Anyone with internet access can initiate their campaign on the
platform and donate to the running campaigns. The platform //[Link]/publication/342742097 Smart
eliminates the necessity for external middlemen. It guarantees Contract and Blockchain for Crowdfunding Platform,
donations to reach their intended recipients. 2020.
[9] Huasheng Zhu and Zach Zhizhong Zhou. Analysis
VI. F UTURE S COPE and outlook of applications of blockchain technology to
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can enhance more transparency and security. Utilizing AI to [10] Sandhu Babu Shalini Mani Chitra Merin Varghese
analyse campaign data can also help in identifying and pre- Aby Varghese, Nandhana A Regi. Crowdfunding
venting activities which builds trust among users. Enhancing plateform using blockchain. [Link]
scalability to handle increasing number of users. Using social uploadedfiles/paper/issue 5 may 2023/39833/final/fin
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