Calculation Example
Onboarding
Polimec ensures regulatory-compliant decentralized fundraising by implementing strict KYC/AML verification through trusted third parties. Participants can verify their identity either via In-App user verification or by obtaining on-chain credentials, which streamlines onboarding directly within the Polimec application.
Funding Application
This example, along with the numbers presented in other chapters, has been randomly generated solely for illustrative purposes.
Example of contribution token registration:
Name
Nexa
Ticker
NXTK
Smallest Denomination (of NXTK)
0.0000000001
Total Allocation of Contribution Tokens Available for the Funding Round
100,000
Minimum Price per Contribution Token (in USD)
10
Target Funding Amount in USD Equivalent
1,000,000
Maximum and/or Minimum Ticket Size
N/A
Participation Currencies (e.g. USDT, USDC, DOT, ETH)
USDT
Issuer Destination Account for Accepted Participations Currencies (for Receiving Contributions)
N/A
Evaluation
Target funding amount: USDT 1,000,000
10% (threshold) of target funding amount: USDT 100,000
Evaluators bonding PLMC during the evaluation period:
The 10% (threshold) of the target funding amount represents the minimum level of support required from evaluators for a project to progress to the funding round. This threshold requires evaluators to bond PLMC equal to 10% of the target funding amount. This approach prevents unrealistic or excessively high valuations, as well as participants getting stuck in an unsuccessful funding round without the economical means to deliver on their planned endeavors.
After 7 days, and given that the total USD amount of PLMC bonded by evaluators is USDT 200,000 (as shown in the example), and the total USD amount of PLMC required to meet the 10% evaluator bonding threshold is USDT 100,000, the project successfully progresses to the funding round.
Funding Round
Total allocation of contribution tokens available for the funding round (Q₀): 100,000
Minimum price per contribution token (P₀): USDT 10
Following, an example is used to simulate the funding round, with the numbers being generated randomly.
Participants bidding in the funding round:
The protocol automatically defines the winning bids using the following procedure:
Identifies eligible bids
Ranks bids from highest to lowest and sorts bids from latest to earliest
1. Identifies eligible bids
The funding round ends after 14 days and the participants with the highest bids win. In addition, the protocol promptly rejects bids that are below the minimum price per contribution token, without allowing them to be submitted.
When the allocated amount of contribution tokens for the funding round is reached, the protocol generates new tranches. In the example above, the threshold is reached when Anna placed a bid of 20,000 contribution tokens at the minimum price of USDT 10 per contribution token. Until this point, participants could submit bids at the minimum price of USDT 10 per contribution token.
In oversubscribed rounds, the highest-ranked bids are accepted, while the lowest-ranked bids are excluded. Each tranche is allocated a fixed amount of 10% of Q₀ which, in this example, is 10,000 contribution tokens. In addition, referring to the formula above, the price development for this example unfolds as follows:
P₀=USDT 10
P₁=P₀+(P₀x0.1)=USDT 10+(USDT 10x0.1)=USDT 10+USDT 1=USDT 11
For each new tranche, the price develops in a linear fashion, requiring the complete filling of the preceding tranche with bids at the corresponding price to advance to the next tranche.
Example of an oversubscribed funding round:
2. Ranks bids from highest to lowest and sorts bids from latest to earliest
As a next step, the eligible bids are ranked from highest to lowest bid price and also from latest to earliest:
Damian
USDT 11
10,000
USDT 110,000
Anna
USDT 10
20,000
USDT 200,000
Fred
USDT 10
10,000
USDT 100,000
Sofia
USDT 10
10,000
USDT 100,000
Crp VC
USDT 10
40,000
USDT 400,000
Adam
USDT 10
20,000
USDT 200,000
As the total amount of contribution token bids exceeded the contribution tokens allocated to the funding round, there was an adjustment in the genesis tranche. Anna’s contribution token amount was reduced to 10,000. This adjustment is due to the fact that she placed the most recent bid at the minimum price per contribution token. The difference of 10,000 contribution tokens is allocated to Damian. Damian filled the most recent tranche of 10,000 contribution tokens at USDT 11, representing the highest price.
Damian
USDT 11
10,000
USDT 110,000
Anna
USDT 10
10,000
USDT 100,000
Fred
USDT 10
10,000
USDT 100,000
Sofia
USDT 10
10,000
USDT 100,000
Crp VC
USDT 10
40,000
USDT 400,000
Adam
USDT 10
20,000
USDT 200,000
Participants can participate with any cryptocurrency accepted by the issuer. The conversion rate for the participation currency (e.g. USDT, USDC, DOT, ETH) to USD applies at the time of placing the bid.
Participation Options
There are two ways to participate on Polimec: Bonding PLMC, where users use their own PLMC tokens, or the One Token Model (OTM), which allows participants to borrow PLMC from Polimec’s on-chain treasury, eliminating the need to hold PLMC.
PLMC Bonding
Continuing from the previous example, the multipliers are applied to the very same participants of the funding round. These multipliers are simulated and generated randomly.
Funding round example with multipliers and vesting periods:
Participant Type
Professional
Professional
Professional
Retail
Institutional
Professional
Bid Price
USDT 11
USDT 10
USDT 10
USDT 10
USDT 10
USDT 10
Contribution Tokens
10,000
10,000
10,000
10,000
40,000
20,000
USDT Bid
USDT 110,000
USDT 100,000
USDT 100,000
USDT 100,000
USDT 400,000
USDT 200,000
Multiplier
10x
2x
1x
5x
25x
5x
PLMC Bonding (worth of PLMC)
USD 11,000
USD 50,000
USD 100,000
USD 20,000
USD 100,000
USD 40,000
Vesting Period PLMC*
~19.5 weeks
~2.2 weeks
N/A
~8.7 weeks
~52 weeks
~8.7 weeks
Vesting Period Contribution Tokens**
~19.5 weeks
~2.2 weeks
N/A
~8.7 weeks
~52 weeks
~8.7 weeks
*starts 7 days after successful funding round **starts 7 days after the project’s mainnet launch
One Token Model
Let’s assume Sofia participates using the OTM instead of bonding PLMC. She bids for 10,000 contribution tokens at the price of USDT 10, making her total bid USDT 100,000. Since the multiplier is set at 5 – as with the OTM – she needs to bond USD 20,000 worth of PLMC. With a price of USD 0.20 per PLMC, this equates to 100,000 PLMC.
Since Ella does not have PLMC, she would borrow the utility from Polimec’s on-chain treasury and pay a 1.5% fee on her total ticket size, which amounts to USD 1,500. This fee depends on the participation currency – in this case USDT – and is deducted from the total ticket size. As a result, Ella’s total ticket size is USDT 98,500 and USDT 1,500 would go to Polimec’s on-chain treasury.
Rewards Payout
Issuer Fee Calculation
With the total funding amount raised being USDT 1,010,000, the issuer will have to pay an issuer fee in their contribution token depending to the raised amount, as per fee schedule.
Therefore, the calculation for the issuer fee is as follows:
x≤1m USD
10%
1m<x≤5m USD
8% for any additional USD raised
x>5m USD
6% for any additional USD raised
N/A
Total Issuer Fee
USDT 100,800
This equals an issuer fee of approx. or . Note that the issuer fee in contribution tokens, i.e. 9,980, is separate from the contribution tokens, i.e. 100,000, sold in the funding round.
Issuer Fee Allocation
It is imperative to note that the issuer fee, equivalent to USDT 100,800, is paid in the form of contribution tokens in accordance with the fee schedule. This fee is then fully allocated to the on-chain contribution treasury to incentivize and reward network participants.
As the target funding amount of USD 1,000,000 is met by the total funding amount raised, which equals USD 1,010,000, it can be deduced that the project has achieved over 100% of its target funding. Thus, the allocation of the issuer fee proceeds as follows:
Liquidity Pools: 50%
Evaluator Rewards: 30%
Long-Term Holder Bonus: 20%
In this example, the issuer fee allocated in contribution tokens to the evaluators is .
Evaluator Rewards Allocation
In this example, the successful attainment of the target funding amount triggers the automatic acceptance of funds and the subsequent distribution of evaluator rewards in contribution tokens.
In accordance with the bonded PLMC threshold of 10%, the protocol designates two portions of the rewards. A proportion of 80% is allocated pro rata among all evaluators, while the residual 20% is earmarked exclusively for those who participated as early evaluators by bonding their PLMC prior to the achievement of the 10% bonding threshold.
All evaluator rewards:
Valeria
Tim
Marc
The distribution of evaluator rewards among Valeria, Tim, and Marc is determined in proportion to their respective contributions to the total USD amount of bonded PLMC, which stands at USDT 200,000.
Early evaluator rewards:
Valeria
Tim
Marc
not entitled
not entitled
The rewards earned by early evaluators, i.e. evaluators Valeria and Tim, are augmented by an additional 20% of the total rewards as a means of incentivizing early participation in project evaluations and deterring free riding.
The allocation of rewards between evaluators Valeria and Tim is determined proportionally to their contribution towards the 10% evaluator bonding threshold of USDT 100,000.
Thus, the individual evaluator rewards in this example are:
Valeria
898.20
449.10
1,347.30
Tim
778.44
149.70
928.14
Marc
718.56
not entitled
718.56
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