Polimec: A Decentralized Fundraising Protocol for Web3
Picture this: A new way not only for Polkadot projects to get funded. Enter Polimec, the first decentralized funding protocol of its kind. It gets rid of inefficiencies and makes sure everyone, no matter where they’re from, has equality of opportunity.
Polimec is about being open and permissionless, breaking away from the usual pay-to-win structure seen in launchpads and centralized counterparts. Instead, it puts importance on empowering the community.
So, on Polimec, it’s not about where you’re from or how much money you have upfront. It’s about giving everyone an equal opportunity. Polimec is here to shake things up and make fundraising better for everyone on Polkadot and beyond. Welcome to Polimec, the future of fundraising.
Content
1. Introduction
In late 2020, the creators of the KILT Protocol conceptualized a token issuance mechanism to improve liquidity in the Polkadot ecosystem — the idea of Polimec was born. The Polimec Foundation, incorporated in 2022 takes it a step further, realizing the independent venture with a new vision to democratize access to capital. This decentralized, community-driven funding protocol addresses the challenges of traditional fundraising methods by introducing transparency, fairness, and efficiency to the process. Polimec’s purpose is clear: to provide a trustless framework for projects, allowing them to raise funds within a diverse community, all while managing the issuance, distribution, and conversion of tokens to mainnet.
The article delves into Polimec’s features, technical details, use cases, and plans, aiming to showcase its potential to transform the fundraising landscape within the Polkadot ecosystem and beyond.
2. Features and Benefits
Trustless fundraising
Polimec is a trustless fundraising protocol, ensuring transparency and fairness in the allocation of capital. By leveraging decentralized technologies, it eliminates the need for intermediaries and fosters a decentralized ecosystem.
Community empowerment on due diligence
Unlike traditional pay-to-win structures on centralized launchpads, Polimec promotes community collaboration. The decentralized funding protocol incorporates a robust due diligence process where participants contribute to project evaluations. This inclusivity democratizes the due diligence phase, encourages active participation and ensures a fair assessment of projects. The community decides who can raise funds.
Decentralized KYC fostering regulatory compliance
Polimec implements a decentralized KYC mechanism in collaboration with KILT and Deloitte. This approach ensures that participants are pseudonymous (not anonymous), adding an extra layer of security and regulatory compliance to the fundraising process.
Deloitte stands out as one of the world’s largest KYC providers, helping foster regulatory compliance on a global scale. Polimec prioritizes KYC scrutiny, promoting legality, and ensuring accountability.
Inclusive access
Polimec breaks down barriers to entry by allowing individuals, regardless of their background, to participate in funding rounds. Unlike exclusive centralized platforms, Polimec offers equal opportunities for retail, professional, and institutional participants. For the first time, you will get access to primary market deals.
Cost-efficient model
The protocol operates on a capital-efficient model, with no upfront fees or fiat charges. There are no fees charged to Participants. Projects only pay fees upon successful fundraising, with 50% directed to those involved in due diligence. In the case of an unsuccessful round, due diligence contributors face a penalty, aligning incentives for accurate project assessments. 30% of the fee is allocated to a liquidity pool, providing early liquidity for the token trading pair. The remaining 20% is the “Long-term holder bonus”, a mechanism incentivizing participants to hold the respective token for 18 months.
Providing Support and value beyond the fundraise
Unlike other platforms focused on connecting stakeholders and maximizing reach, Polimec provides value during and beyond the fundraise. Projects can benefit from diversified vesting schedules, direct community feedback, support in building ambassador programs and many more services that come with building a startup in web3.
Experienced leadership and substrate integration
Led by a team with previous experiences from Web3 Foundation, KILT and traditional finance, Polimec brings a wealth of experience to the Polkadot ecosystem. This leadership ensures a strategic focus on substrate-based projects and adherence to industry standards.
Polimec emphasizes Substrate-based projects, requiring the implementation of pallets for compatibility, even while amplifying expansion to Moonbeam’s EVM-based environment.
In summary, Polimec stands as the first regulatory-compliant decentralized platform, revolutionizing fundraising in the Polkadot ecosystem with its inclusive, transparent, and community-driven approach.
3. Technical Details
Fundraising framework and token distribution
Polimec utilizes a rule- and blockchain-based framework for fundraising, ensuring an automated and trustless process. The entire funding process is orchestrated on the blockchain, providing transparency and security.
Participants can contribute to funding rounds using various currencies specified by the issuer, including stablecoins, DOT, etc. This flexibility allows for a diverse range of currencies in fundraising.
Tokens are issued by projects after successfully raising funds on Polimec. These tokens are distributed to evaluators and participants, serving as proof of participation and later automatically converted to the project’s mainnet token at launch.
Tokens are issued by projects on their fully developed and deployed mainnet or blockchain protocol. Polimec facilitates the migration of contribution token balances to the project’s mainnet in an automated and trustless way.
KYC/KYB/AML credentials
Polimec relies on trusted third-party on-chain credentials for KYC/AML, ensuring regulatory compliance. Issuers undergo KYC/KYB/AML to obtain credentials verifying legal entities, founders, and signatory rights.
All participants, including evaluators and contributors, obtain credentials to verify identity and KYC/AML compliance. Initiating a KYC/AML check through a trusted provider results in the issuance of on-chain credentials to the participants’ credential wallet.
Funding application and evaluation process
Issuers complete a funding application, detailing token information, allocations, funding targets, and project specifics like whitepapers and roadmaps.
Evaluators conduct due diligence over 28 days, bonding PLMC tokens to express confidence. Successful thresholds trigger the funding round. Evaluators earn social credit from past evaluations, boosting trust and transparency.
Participants can apply multipliers based on credentials or past participation, influencing the amount to be bonded and determining vesting periods. The process includes an auction, community, and optional remainder round, with participants contributing in various currencies. The vesting period of the locked funds starts at the end of the fundraise for PLMC and at mainnet launch for mainnet tokens. Contribution tokens are issued after the fundraise and serve as placeholder until they are migrated to mainnet tokens. Issuers pay a percentage fee, decreasing with higher raised amounts, ensuring a rule-based issuance and distribution process.
Migration involves transferring instance-ID and balances to the new mainnet using XCM, ensuring transparency. Polimec supports airdrops to incentivize engagement and distribute tokens, managed by issuers for user base growth.
Overall, Polimec aims to simplify fundraising, ensure compliance, and enhance transparency in the Web3 ecosystem on the Polkadot network.
4. Partnerships and Collaborations
Some partnerships stand out for their functionality and practicality. Let’s explore them.
1. Deloitte Managed Services
Deloitte and Polimec collaborate to issue reusable KYC/AML credentials, streamlining regulatory-compliant fundraising. Deloitte’s banking-grade credentials enhance trust for issuers and categorization for participants, fostering a secure, compliant, and pseudonymous investing environment on Polimec.
Polimec has partnered with Deloitte Switzerland, a leading professional services firm, to introduce reusable KYC (Know Your Customer) / AML (Anti-Money Laundering) credentials for digital asset fundraising on a global scale. KYC is a process of verifying the identity of customers to prevent fraud, money laundering, and other illegal activities.
Deloitte issues these KYC credentials, providing robust, banking-grade verification for legal entities or individuals participating in fundraising. Anchored on the KILT blockchain, these credentials are pseudonymous, ensuring no personal information is stored on-chain, empowering users to selectively share data.
This collaboration not only streamlines early-stage fundraising on Polimec but also enhances security, privacy, and trust by enabling identity verification without intermediaries or data exposure. It signifies a significant stride in advancing the potential of Web3 for a more efficient, inclusive, and sustainable fundraising environment within the Polkadot ecosystem and beyond.
2. KILT Protocol
Polimec has integrated credentials issued on KILT, harnessing its decentralized blockchain protocol to establish a secure and self-sovereign credential system. Credentials issued on KILT are pseudonymous, and no personal information is stored on-chain — hence all transactions and network participants on Polimec can be processed in a regulatory-compliant and secure manner while preserving data privacy.
As a blockchain identity protocol, KILT empowers the creation and verification of self-sovereign credentials.
The collaboration between Polimec and KILT is geared toward cultivating a more efficient, inclusive, and sustainable fundraising environment, benefiting the Polkadot ecosystem and beyond.
3. Moonbeam
Polimec partners with Moonbeam to enable EVM-based fundraising, expanding beyond Polkadot. Moonbeam’s asset teleportation facilitates seamless cross-chain transactions, supporting Polkadot and EVM-based projects. This collaboration accelerates fundraising accessibility in diverse blockchain ecosystems.
5. Tokens and Tokenomics
Tokens on Polimec
Participation currencies
Issuers specify accepted currencies for funding rounds, including stablecoins (USDT, USDC) and DOT. This flexibility accommodates diverse financial preferences.
Contribution tokens
Issued to successful project backers, contribution tokens enhance trust and transparency. They are transferability-locked, automatically converting to the project’s mainnet token, streamlining distribution and incentivizing network participation.
Mainnet tokens
Fully developed project tokens on mainnet. Polimec automates the migration from contribution tokens to mainnet tokens, ensuring transparency, security, and efficient distribution based on issuer-set conversion rates.
Tokenomics
1. PLMC Metrics
Native Token: PLMC
Fully Diluted Supply: 100 million PLMC*
Inflation: 0%*
Smallest Denomination: 10–10 (0.0000000001 PLMC)
*For 4 years post-mainnet launch, total PLMC supply capped at 100 million. Future supply changes are subject to on-chain governance.
2. PLMC Functionalities
Evaluation
Holders support projects through evaluations, and bonding PLMC. Correct evaluations earn rewards, while incorrect ones may lead to slashing.
Participation
Bonded PLMC provides access to funding rounds, where holders can contribute using various accepted cryptocurrencies (participation currencies).
Governance
PLMC holders influence protocol development, feature inclusion, and treasury management through governance decisions based on Polkadot Gov1.
Staking
Delegating PLMC to collators earns staking rewards, promoting network stability and transaction validation.
PLMC holders can stake their tokens to earn rewards, but the staked PLMC is locked for a 7-day unbonding period during which rewards are not paid out.
Staking is available here app.polimec.org so you can stake your PLMC.
Token distribution
The PLMC token has a capped supply of 100 million for the first 4 years, allocated as follows:
Early Backers (20%): Globally diverse investors backing early Polimec development, fostering initial user engagement and continuous improvement.
Employees, Advisors, and Founders (20%): Allocated to align long-term incentives for the development team, ensuring adaptability to the evolving Web3 landscape.
On-Chain Treasury (40%): Supports sustainable network growth, divided into the protocol growth treasury (75%) and the blockchain operation treasury (25%).
Foundation Reserve (20%): Reserved for long-term support, addressing future needs and growth opportunities for Polimec’s self-sustainability.
6. Plans and Roadmap
Here are the next steps for Polimec:
1. Governance activation: Polimec plans to activate governance, allowing every token holder to participate in decision-making for the platform’s trajectory.
2. Sudo removal: To achieve true decentralization, Polimec will initiate a governance vote to remove sudo access, handing control of the protocol over to the community.
3. Transferability vote: A governance vote will be held to enable the full transferability of PLMC tokens.
4. App launch: Polimec intends to launch its app, providing users with a platform to connect using their KYC/Deloitte Credential, marking the start of the fundraising journey.
5. First fundraise: The platform will open for its first fundraise, allowing project issuers to structure their funding rounds and submit applications.
7. Conclusion
Polimec is pioneering decentralized fundraising on Polkadot, introducing the first regulatory-compliant protocol that transforms the fundraising landscape. With a focus on inclusivity, transparency, and community involvement, Polimec redefines the fundraising landscape in the Web3 space with simplicity, regulatory compliance, inclusivity, and transparency.
In contrast to traditional launchpads, Polimec operates autonomously, ensuring a level playing field for global participants. Its reusable KYC credentials, verified by trusted third parties such as Deloitte, match traditional standards. Polimec’s efficient, trustless, and collaborative model contrasts with potential drawbacks in centralized launchpads, such as inconsistent KYC standards, restricted access, and manual processes.
The native token, PLMC, encourages active engagement. As governance activation and the Polimec app approach, the platform’s commitment to community-driven development becomes evident. Heading into its first fundraise, Polimec is set to redefine Web3 fundraising, providing a secure and inclusive ecosystem for issuers and participants.
- Enhance Polkadot’s governance process by delegating your DOT or KSM to POLKADOTTERS, dedicated community supporters within the Polkadot ecosystem, enabling seamless participation in on-chain governance through Nova wallet or Polkadot Delegation Dashboard
- Support Polkadotters Shrimp and Polkadotters Octopus on Polkadot and be a part of a more secure Web3 future
