Community-Based Liquidity Seeding: A Launchpad First
Polygen is a next-gen decentralized launchpad that enables and drives innovation for fundraising crypto projects. Its’ architecture is designed to decentralize the crypto fundraising process and ensures that the community has more control in the process.
Polygen: A Decentralized Launchpad
At Polygen, we believe there is a predisposed way of thinking that voting is the best way to vet projects. Typically, a fundraising platform will have a voting mechanism for choosing the projects they like and want to fund. However, this model creates unfair dynamics for projects as well as for the community and investors. The existing voting mechanism curbs innovation for the projects and players in the ecosystem. We are challenging this model.
Community-Based Liquidity Seeding: the concept
Polygen does not have a voting mechanism for projects. Instead, Polygen brings together factors such as project USP’s, community interest, leadership and existing investors for the community to conduct their due diligence. A unique liquidity seed funding mechanism can then be used by the community to effectively underwrite a project by providing seed liquidity. Thus the community is the deciding force behind a project’s success or failure with fundraising on the platform. The community effectively “votes’’ by providing liquidity to projects they think are the most promising by providing seed funding for a project to start their raise.
Polygen is the only launchpad that has community-based seed funding, opening up a world of opportunity for both Projects and investors. We believe anyone can provide seed funding for a Project they think is promising. In turn, it’s up to the Project to demonstrate that promise, through their product, their team, their vision and business model.
Projects will build their reputation and community based on the success of the seed funding process. The community will follow the liquidity seeders who have established a successful track record and will invest in projects that the proven seeders are backing. Polygen already has a rich ecosystem of VCs/Incubators that will want to take the lead on seeding projects. Projects that don’t resonate with the community won’t attract liquidity, so they will not succeed, as they cannot begin a full raise. Essentially, this seed funding process becomes the vetting process on Polygen.
Liquidity Seeding: how it works
Polygen provides all the relevant information for a project whose metadata is connected to the launchpad platform. The project preview and description are hashed on-chain, and hence any changes made will be viewable.
In the Seed section of the Polygen Dapp, you will see how much liquidity the Project has raised to date and what remains to be raised. When a user is interested (this can be anyone — investor, incubator, community member) in a Project and wants to get involved, the seeding process can begin!
The Seeder clicks on the Project and begins the process:
● The Project description will explain the reward for seeding the Project in trust (e.g 5 USDT per 1000 USDT of seeder funds)
● The Seeder agrees to terms and adds liquidity to the raise pool, receives sTKN for his USDT / token the project requests
●Seeder provides token e.g. USDT and receives sTKN during raise, and then redeems sTKN for his USDT reward upon completion
● The Liquidity Provider’s funds are held in trust, and Liquidity Providers know they have zero risk. If the raise is not successful, they receive their funds back.
● If the Project raise is successful, the Seeder receives his funds back plus the agreed reward
Hence, any community member who holds PGEN can become a liquidity provider knowing they have zero risk returns. If the project is authentic and promising, it automatically rises to the top. Alternatively, in the event the project fails, the funds are successfully returned to the liquidity provider. All these operations are automated through a smart contract.
The innovative mechanism of community-based liquidity seeding ensures a more fair, transparent, and decentralized way in the blockchain ecosystem. It also offers wider opportunities, creating a vibrant ecosystem of projects and investors. It also creates a natural selection process driven by the community driven by market forces, not the launchpad.
