Announcing Totem’s Revised Polkadot Parachain Offering.

The community spoke, we listened. We’ve made significant changes to Totem’s Parachain Crowdloan & Pledge Offering and we think you’ll be thrilled to learn what you’ll get now.

Launch

During the course of the last month, since we announced our Polkadot Parachain Offering in fact, a lot has happened. We exploded on to the Parachain scene gaining 5,000 new users in under 24 hours in the week after we launched. That growth has continued daily and we have 33,887 users signed up to our Totem Live Testnet App at the time of writing.

Initially the Crowdloan and Pledge Offering was welcomed when we launched and as you all began to explore the details it became obvious that there was some discontent in the community. The issues were not only the way the rewards were calculated, but the reality on the ground as recent parachain slots have been won.

Where we went wrong.

We had set out with a mission to make our Crowdloan standout and we built our offering early based on figures being obtained by Acala and Moonbeam and the other first 10 teams. Our aims were to give as much away to the community as possible and allocated up to 55% of our Parachain native currency — KAPEX — to the Crowdloan and Pledge.

In addition, unlike other teams we had scarcity built-in into the entire proposition with only 2,518,818 KAPEX as the Total Supply and transaction fees burning the coins during transactions. That’s significantly lower than almost all projects in the Polkadot Ecosystem and was designed specifically to grow the value in the long term — because this would establish the market cap for MainNet when that eventually launches.

This was all designed when the Parachain Auctions had first started and teams were easily achieving significant levels of investment. Teleport-forward to today, and the Polkadot Parachain Crowdloan and Auction dynamic has completely changed — teams are winning slots with relatively low levels of support and investment.

Community members made the point that given the current state a slot could be won well below the original soft- and target-cap amounts. Under those circumstances the community would not get much more than 6% of total supply.

We had not seen things like this and it was important to us that we correct that oversight as soon as possible!

Where we are now: we listened and reworked the entire offering.

Given that this was the case, the team has taken a lot of time to reconfigure the offering so that there would be a minimum percentage of KAPEX distributed to the community, whilst giving better incentives across the board to maintain our aim of distributing 55% of supply in the offering as a whole.

In order to do this we have had to change a number calculations, and improve the percentage distributed and thresholds at every step.

The following is a breakdown of the new offering addressing the criticims that were levied at the original offering.

Criticism 1 — If the original soft and target caps are not met, investors will get a very low percentage of the total supply.

This was claimed to be misleading since it had been advertised that 55% of the coins would be distributed.

55% of total supply (1,420,000 KAPEX) is still the figure up for grabs in the Crowdloan and Pledge but we are now guaranteeing distribution of the Hard Cap allocation of KAPEX and reducing the threshold to qualify for bonus distributions.

1) At least 22% of total supply— 568,000 KAPEX — are guaranteed to be distributed to all contributors to the Crowdloan and Pledge regardless of reaching the Soft or Target Caps.

This allocation supersedes all other base payouts for the Crowdloan and can be characterised as “the amount of KAPEX allocated to the Hard Cap, will now be distributed to all Crowdloan supporters no matter what happens” as long as we win a parachain slot.

2) We have significantly lowered the Crowdloan Soft Cap and Target Cap thresholds making it easier to achieve and hence to payout the bonuses which are on top of the Crowdloan Allocations in 1) much sooner.

• Soft Cap is now 568,000 DOTS. (Down from the original 1 million DOTS).
• Target Cap is now 1,775,00 DOTS. (Down from the original 5.68M DOTS) with a further 10% bonus (20% in total).

Criticism 2 — The lost opportunity cost of contributing DOTS to the Pledge was hard to calculate because it was dynamic and based on variable factors.

It meant that contributors were not particularly incentivised to contribute to the Pledge.

As a team we do not receive DOTs contrbuted in the Crowdloan, but we do need to fund the infrastructure and the development costs going forward. It is important to us to make sure we raise funds to do this, but not excessively. This is the purpose of the Pledge but it needed to be simpler:

• We have simplified the Pledge allocation to a fixed amount nearly 3x greater than it was before at 0.32 KAPEX per DOT.
• We have significantly increased the limit that can be contributed to the Pledge to 100% of a contributors’ Crowdloan deposit.

This has allowed us to distribute just over 3x more KAPEX to everyone who takes part in the Pledge, and allows us to get far closer to the target of distributing the 55% of coin supply.

We have also set a Hard Cap on the Pledge to ensure that the incentives are not skewed away from the Parachain Crowdloan to win a Parachain Slot.

Criticisim 3 — Where do the unallocated coins go?

This wasn’t made clear in the original offering and considering that the outcome to be 6%:20% Community to Team, the remaining 49% of coins would go back to the Treasury that already held 20%, meaning it was by far the biggest holder.

To address this we have made this policy:

There will therefore be no remaining Hard Cap allocation of KAPEX to be returned to the Treasury.

On the other hand if the Pledge is not fully subscribed, it will be opened up for sale to the market including private investors in the months following the Parachain slot win so that we can secure our future as a development team.

Criticism 4 — In the worst case scenario outlined in the first criticism, team will get proportionally too much.

We felt this is somewhat unfair as a criticism because the allocation was not just for the current team — but the future team as well, but we accepted that it could be made clearer.

• To deal with this point we have stated in our documentation that the Current Team will only get 10% now and the other 10% will be kept for future team/employees.

This means that the Community Guaranteed amount is double what the team are getting under worst case circumstances, with the best case scenario netting the community a much higher ratio of KAPEX coins. This will be anywhere between 2.2x to 5.5x what the team receive after the slot is won.

Rounding up.

We are really grateful to the community for the feedback. it has helped us focus on making our offering both attractive but more importantly, realistic.

We are sure that there will be further criticisms at the extremes, but for the vast majority, we believe that the new offering deals fairly with the points raised, and gives our community a fantastic opportunity to have a share of Totem’s Parachain.

Totem Accounting is building the world’s first peer-to-peer accounting protocol and network. It’s not just a first for blockchain, it’s a first for accounting too. If you want to join our team checkout our career pages or reach out to us on one of our social channels:

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