Reward Payouts

Projects raising funds on Polimec only pay a percentage fee in relation to the total fundraising amount in their contribution token if the funding round completes.

Issuer fee schedule:

The following thresholds apply to the total amount raised relative to the target funding amount.

Possible outcomes under the various thresholds:

Should the total amount raised fall at a level of 33.00% or below of the target funding amount, the protocol automatically declines the project, slashes 20% of the evaluators’ bonded PLMC, and refunds the participants. The slashed PLMC are allocated to the on-chain treasury. The 33%-threshold incentivizes projects to raise funds in line with their expectations. It prevents unrealistic or excessively high valuations as well as participants getting stuck in an unsuccessful funding round.

Should the total amount raised fall within the range of 33.01% to 75.00% of the target funding amount, the protocol gives the project the opportunity to decide whether or not to accept the funding. Regardless of the decision, evaluators get slashed 20% of their bonded PLMC. Contingent upon the project’s decision to accept or reject the funds raised, the participants either receive contribution tokens or are refunded.

Should the total amount raised fall within the range of 75.01% to 89.99% of the target funding amount, the protocol gives the project the opportunity to decide whether or not to accept the funding. In this case, evaluators are not slashed nor do they receive rewards. This incentivization punishes evaluators only for qualitative misjudgement of projects but not for minor quantitative miscalculations. Contingent upon the project’s decision to accept or reject the funds raised, the participants either receive contribution tokens or are refunded.

Should the total amount raised fall at a level equal to or exceeding 90.00% of the target funding amount, the protocol automatically accepts the funding, evaluators are rewarded in the respective contribution tokens based on the amount raised for the project, and participants receive the respective contribution tokens based on their participation.

The project has 72 hours after the end of the funding round to either decline or accept the funding. If no decision is made by the project within the 72 hours, the funding is automatically accepted. The applicable settlement as a result of the project’s decision will take place 7 days after the end of the funding round.

Thus, the evaluator rewards are contingent upon two elements. Firstly, the ratio between the total amount raised and the target funding amount and secondly, whether the project accepts the funding. In the event that the project chooses not to accept the funds, there will not be any issuer fees to be apportioned to the evaluators. Conversely, if the project accepts the funds and there are issuer fees to be distributed, the proportion between the total amount raised and the target funding amount defines the distribution to liquidity pools, long-term holder bonuses, and ultimately, evaluator rewards.

The variable Y in the example below represents the ratio between the total amount raised and the target funding amount along with its implications for the allocation of issuer fees to liquidity pools, evaluator rewards, and long-term holder bonuses. For this purpose, the allocations for the individual ratio intervals (≤33.00%; 33.01-75.00%; 75.01-89.99%; ≥90.00%) are processed.

Possible allocation outcomes under the various thresholds:

Note: The outcomes for ≤33.00% and ≥90.00%, which are automatically determined by the protocol, remain constant in the table (included for the purpose of completeness). The only outcomes that are dependent on the project's choice are those within the ranges of 33.01%-75.00% and 75.01%-89.99%, and as a result, these outcomes are considered dynamic.

Should the funds raised fall (i) at a level of 33.00% or below of the target funding amount, the allocation would look as follows:

• Liquidity Pools: 0%
• Evaluator Rewards: 0%
• Long-Term Holder Bonus: 0%

In this case, the protocol implements an automatic rejection mechanism. As a result, the protocol obviates the imposition of issuer fees. However, evaluators get slashed 20% of their PLMC as their prediction was wrong. These PLMC are then transferred to the on-chain treasury.

Should the funds raised fall (ii) within the range of 33.01% to 75.00% of the target funding amount, the project decides whether to accept or reject the funds. In the event of rejection, no issuer fees shall be levied, participants are refunded and the allocation shall be the same as in (i). Conversely, in the scenario where the project opts to accept the funds, an issuer fee is due, with the proceeds being designated solely for the benefit of liquidity pools and long-term holder bonuses. Evaluators, who failed in their predictions, will incur a 20% slash of their PLMC. These PLMC are then transferred to the on-chain treasury.

• Liquidity Pools: 50%
• Evaluator Rewards: 0%
• Long-Term Holder Bonus: 50%

Should the funds raised fall (iii) within the range of 75.01% to 89.99% of the target funding amount, the project decides whether to accept or reject the funds. Consequently, the outcomes are equivalent to those described in (ii). Nevertheless, a marked differentiation exists in this scenario, in that evaluators shall not be subject to slashes, as previously noted. This incentivization strategy is deliberately designed to avoid penalizing evaluators for minor quantitative miscalculations.

Should the total amount raised fall (iv) at a level equal to or exceeding 90.00% of the target funding amount, the allocation shall be established in accordance with the following formula:

• Liquidity Pools: 50%
• Evaluator Rewards: 30%xY, where Y is the percentage of the total amount raised compared to the target funding amount
• Long-Term Holder Bonus: 20%+30%x(1-Y)

The distribution of evaluator rewards and long-term holder bonuses is contingent upon the final outcome of the funds raised. As the total total amount raised approaches the target funding amount, a greater percentage of the contribution tokens is allocated towards evaluator rewards.

For instance, if the project raises 90% (Y=0.9) of the target funding amount – out of the remaining 50% (not allocated to liquidity pools) – 90% of the contribution tokens are allocated to evaluators and 10% to long-term holders. Similarly, if the project raises 95% of the target funding amount, 95% of the contribution tokens will be allocated to evaluators and 5% to long-term holders. If the project raises 100% of the target funding amount, all contribution tokens are allocated to evaluators, and the overall allocation shall look as follows:

• Liquidity Pools: 50%
• Evaluator Rewards: 30%
• Long-Term Holder Bonus: 20%

The protocol further distinguishes between two categories of evaluators, allocating 80% of the evaluator rewards pro rata to all evaluators, and the remaining 20% solely to early evaluators, defined as those who bonded their PLMC prior to the 10% evaluator bonding threshold being reached.

This mechanism encourages evaluators to only back projects they consider to have an above-average success probability. It consequently ensures that only projects deemed promising by the community are made available to participants.