A fully decentralized protocol built for cross-chain token pools and auctions, enabling projects to raise capital on Polkadot
While IDOs on Uniswap certainly decreased the initial expense for a project’s token listing, that convenience came at a steep cost. The crypto community quickly adjusted to this new token launch mechanism. Savvy investors began to front-run listings immediately after a large amount of liquidity was provided to a Uniswap pool. Some would purchase the entire pool in one swoop, causing the crypto asset to soar in price as others attempted to do the same. The term “ape in” to a liquidity pool was born to describe those who turned up the gas on their MetaMask wallet to buy out entire pools of newly-created tokens at lower prices before others did the same.
The above in turn produced wild volatility and left many investors shell-shocked, additionally, this approach suffers from other significant downsides, most notably:
Projects need to provide liquidity on both the asset for sale (base currency) and a quote currency (usually ETH) for it to initially trade against.
Automated market makers, such as the one powering Uniswap, would dynamically adjust the asset’s price based on supply and demand.
Increasing popularity and usage of platforms such as Uniswap reinforced scalability issues, with Ethereum network fees skyrocketing and slow platform performance, leaving end-users frustrated.
Users are increasingly demanding;
The killer features of Polkastarter is the possibility of making both fixed swap pools and cross-chain swaps, powered by the Polkadot ecosystem, which can provide higher throughput for faster and cheaper transactions while staying connected to the Ethereum Network and other blockchains for liquidity.
The future of decentralized finance won’t be tied to one chain and interoperability is already becoming a must-have feature of the DeFi future.
Key Features And Highlights:
Fixed Swap Pools: Polkastarter will allow projects to list at a fixed price, which will be maintained for as long as there are tokens remaining in the original supply. This should ensure less volatility around a token launch.
Liquidity Mining: In the manner of great DeFi projects like Synthetix and Balancer, this program will distribute a fixed amount of POLS tokens daily. All liquidity providers will receive POLS from this as-yet-undetermined fixed amount on a pro-rata basis.
For example, if there is 1000 ETH in fixed swap volume for 24 hours, a user that contributed 100 ETH of that volume will receive 10% of the total daily liquidity rewards.
Liquidity providers can claim their POLS token rewards after 24 hours and will have 7 days to claim their reward tokens on the Polkastarter dashboard. Unclaimed tokens will be sent back to the rewards pool for later distribution.
Staking for Pool Access: For high-demand pools, access can be limited to the top liquidity and network contributors. Password protection and whitelisting are potential features that could provide additional limits. However, to best align the interests of the entire Polkastarter community, the POLS token can be used as a coordinating mechanism.
For instance, if community members want access to certain token pools, they must stake POLS tokens. Of course, token pool creators have full autonomy over this process. For projects that use the Polkastarter platform, Polkastarter goal is to craft diverse token holder communities loyal to the project and invested in its long-term success.
Private Pools: One of the Polkastarter use cases is private fundraising and closed over the counter (OTC) deals. To enable these, Polkastarter will launch with features like password protected pools and address whitelisting for pool participation.
Permissionless listings: True decentralization only works if they build a permissionless environment. Though certain Polkastarter features may be enhanced for POLS token holders, anyone will be able to use the protocol in order to create and launch fixed swap token pools. Counter-measures to prevent bot-based and malicious pools will also be integrated.