# Issuance and Distribution

Throughout the history of token-based fundraising, projects have used various ways to distribute tokens. However, the processes, terms, and methods of the actors involved in common distribution forms tend to be cumbersome, highly trust-based, and time and cost inefficient for issuers and participants.

The issuance and distribution mechanism on Polimec eliminates the complexities of token distributions for issuers while ensuring transparency and a smooth allocation process for token recipients. The rule-based framework governs the transfer from the modules to the various network participants, eliminates counterparty risks, and introduces accountability and censorship resistance.

For finalizing the funding round and issuing the contribution tokens to participants, the issuer calls the relevant network function with the following parameters, signed with the issuer’s DID and credential identifying them as the issuer:

* Instance-ID[^1]
* Instance of the funding round
* Hash of instance-specific KYC/AML-credential

Once all parameters are set and verified by the protocol, the contribution tokens are issued to the participants according to the balances determined by the funding module at the end of the funding round. The additional allocation of contribution tokens is settled to the treasury module for incentivizing other network participants through the evaluation and liquidity pool module.

At the same instant, the total funds raised are transferred to the issuer account and will be at their complete disposal.

[^1]: Unique identifier assigned to each instance on a blockchain network.


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