Moonbeam

Overview

KILT Protocol


Polimec’s Knowledge Hub serves as a repository of modular information for all stakeholders who interact with the network and seek a deeper understanding of its functioning. This community-oriented initiative is spearheaded by the Polimec Foundation and constitutes a reliable source of truth, providing information on all matters pertaining to Polimec.

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Polimec Overview

Polimec Basics

How do I vote with staked PLMC?

Knowledge Hub


## [Vision and Mission of Polimec](vision-and-mission-of-polimec)

Polimec’s **vision** is to transform finance for a fair and decentralized future.

Polimec’s **mission** is to shape the future of finance by democratizing access to capital and transforming the landscape of direct ownership. By leveraging decentralized technologies, Polimec delivers products and solutions for a more inclusive world, where everyone has the power to participate and own.

## [Introduction to Polimec](introduction-to-polimec)

Polimec started in late 2020 as a project conceptualized by the team behind <Popover label="KILT Protocol">A blockchain identity protocol for generating self-sovereign, decentralized identifiers (DIDs) and verifiable credentials.</Popover> and became an independent project to realize the vision of the first decentralized, community-driven funding protocol for <Popover label="Web3">Third generation of the world wide web, characterized by the use of decentralized technologies such as blockchain, smart contracts, and peer-to-peer networks.</Popover>. Since then, a dedicated team with extensive experience in crypto and financial services has taken on the protocol’s further development and the network’s future launch. In June 2022, the Polimec Foundation (Zug/Switzerland) was established, a non-profit organization dedicated to developing, growing, and promoting Polimec.

## [Purpose of Polimec](purpose-of-polimec)

Polimec provides an automated framework for projects to raise funds within a broad and diverse community with transparent and fair access for all. The protocol provides access to fundraising and manages the issuance, distribution, and conversion of tokens to mainnet. 

Polimec allows different stakeholders to participate in funding rounds, and minimizes information asymmetry between participants and issuers to grow their community. The underlying reward mechanism ensures that the interests of the various participants and projects are aligned for sustainable fundraising. 

Using <Popover label="on-chain">Activities, transactions, or data that are recorded directly on the blockchain.</Popover> <Popover label="credentials">Verifiable, tamper-proof records that attest identity attributes, skills, achievements, and qualifications of individuals.</Popover> enables user verification for <Popover label="KYC/AML">Know Your Customer (KYC), process of identifying and verifying the client’s identity aimed at uncovering or preventing fraud, corruption, money laundering and terrorist financing. Anti Money Laundering (AML), a framework of laws, regulations, and procedures aimed at uncovering or preventing efforts to disguise illicit funds.</Popover> and other regulatory purposes while staying <Popover label="pseudonymous">Practice of using a public key or wallet address where the identity of a person is unknown whereas it is still possible to assign related transactions to the same wallet.</Popover>. This allows <Popover label="network participants">General term for all network participants interacting on Polimec, i.e. issuers, evaluators, participants, stakers, liquidity providers.</Popover> to comply with relevant regulations in a decentralized and efficient process - while preserving data privacy.

Furthermore, the native <Popover label="PLMC token">Native token for Polimec, serves four purposes: evaluation, participation, staking, and governance.</Popover> enables access to fundraises and a variety of additional functionalities such as evaluations, <Popover label="staking">Holding/locking up tokens to contribute to validating transactions and supporting functioning of the network, and in return, earning rewards.</Popover>, liquidity provisioning, governance, and more.

## [Roles on Polimec](roles-on-polimec)

**[Issuers](/learn/network-participants/issuers)** on Polimec are projects raising funds on Polimec. After providing the necessary documentation and structuring their funding process, issuers are subject to approval from evaluators to enter the funding round and depend on participants to achieve a successful fundraise.

**[Evaluators](/learn/network-participants/evaluators)** on Polimec are incentivized to assess projects accurately, as they earn rewards for successful evaluations or get <Popover label="slashed">Penalty mechanism in blockchains that involves the deduction of a portion of staked tokens for certain types of malicious, erroneous behavior, or i.e. inaccurate funding prediction.</Popover> for unsuccessful ones. The evaluation process is intended to be transparent, with evaluations recorded on the blockchain and evaluator <Popover label="DIDs">Decentralized identifiers, globally unique persistent identifiers that do not require a centralized registration authority and are often generated and/or registered cryptographically.</Popover> linkable to social media profiles.

**[Participants](/learn/network-participants/participants)** on Polimec are actors categorized as <Popover label="retail">Natural persons that do not qualify as professional participants.</Popover>, <Popover label="professional">Natural persons with the necessary knowledge or experience and/or sizable assets at their disposal.</Popover>, or <Popover label="institutional">Legal entities which qualify as professional, such as financial intermediaries or companies with professional treasury departments.</Popover>. They can browse projects and participate in those for which they are eligible based on their credentials. Unsuccessful funding rounds will result in an automatic refund of the participants’ contributions. <Popover label="Contribution tokens">Tokens issued by projects which successfully raised funds on Polimec, serving as proof of participation for participants of the respective funding round.</Popover> are automatically converted to <Popover label="mainnet tokens">Tokens that operate on a project’s fully operational blockchain (mainnet).</Popover> once a project’s <Popover label="mainnet">A project’s fully operational blockchain.</Popover> goes live. 

**[Stakers](/learn/network-participants/stakers)** on Polimec earn staking rewards by delegating to <Popover label="collators">Node operators in parachain networks that collect and execute transactions, generate state transition proofs, and provide unsealed blocks to validators for proposing a parachain block, while also facilitating message passing between different parachains.</Popover> who help stabilize the network. Staking rewards for collators and their delegators are paid out in PLMC on a round-by-round basis. The effective staking rewards rate is determined by the amount of PLMC staked in relation to the total supply. 


## [The Reasons for Polkadot](the-reasons-for-polkadot)

Polimec builds on the <Popover label="Polkadot">Heterogeneous, multi-chain network allowing various blockchains of different characteristics to perform arbitrary, cross-chain communication under shared security, enabling cross-chain interoperability and scalability.</Popover> ecosystem infrastructure due to its crucial differentiation from other decentralized protocols. A key pillar is that Polkadot enables true <Popover label="interoperability">Ability for a system, such as different blockchains, to exchange or to make use of information and data.</Popover> and <Popover label="cross-chain transfers">Process of transferring tokens or value between different blockchains.</Popover> of any type of data or asset. The ability to interoperate with various blockchains is critical for a thriving fundraising ecosystem and leveraging network effects. Furthermore, on Polkadot every <Popover label="parachain">Purpose-built blockchains that connect to the Polkadot Relay Chain to benefit from shared security, cross-chain interoperability and scalability.</Popover> derives its security from the Polkadot <Popover label="Relay Chain">Blockchain that coordinates consensus and communication between parachains and external chains.</Popover> and its <Popover label="validators">Node operators in a proof-of-stake (PoS) blockchain that validate transactions and proofs from collators on parachains, and create new blocks along with other validators to earn rewards.</Popover>. This ensures that each transaction on Polimec is secure and <Popover label="trustless">Ability of a system to function without the need for network participants to trust each other or a central authority/actor.</Popover>. Low transaction fees allow the protocol to scale and <Popover label="runtime upgrades">Allow changes or improvements made to the underlying software or logic of a blockchain while it is still operational (i.e. without the need for a hard fork).</Popover> enable Polimec to improve consistently and swiftly without requiring time-consuming <Popover label="forks">Creating a new blockchain protocol by copying an existing one and making changes to its software or logic.</Popover>.

*High-level technical infrastructure of Polimec:*

<ImagePop  center src="/images/graph_high-level-technical-infrastructure.png" caption="High-level technical infrastructure of Polimec" />

Polimec executes token transfers between the network participants and the on-chain treasury in an automated manner. This includes mechanisms for the issuance and distribution of contribution tokens and their conversion to the project’s mainnet token at launch. Polimec uses trusted third-party providers to credential and verify network participants to support them in complying with relevant regulations. The pseudonymous credentials can be validated on-chain using the KILT protocol. 

Polimec can integrate with other parachains and <Popover label="parathreads">Allow parachains to temporarily participate (on a block-by-block basis) in Polkadot security without needing to lease a dedicated parachain slot.</Popover> built on Polkadot’s technology and any <Popover label="layer 1">Base protocol layer of a blockchain network.</Popover> or 2 blockchains built on top of the existing <Popover label="layer 0">Provide the fundamental infrastructure for layer 1 blockchains and are designed to address the challenges prevalent to blockchain systems, including security, scalability and interoperability.</Popover> of Polkadot.

However, Polimec is expected to be available to other ecosystems (e.g. <Popover label="EVM">Ethereum Virtual Machine, a decentralized software used to create decentralized applications and smart contracts.</Popover>-based) in the future.

## [Polkadot’s Parachains](polkadot’s-parachains)

Polkadot is an advanced blockchain that utilizes a heterogeneous <Popover label="multichain">System where multiple independent blockchains are linked together to enable cross-chain interoperability and communication between them.</Popover> architecture, which enables a network of specialized, independent blockchains, known as parachains, to operate in concert under a unified security umbrella. This multichain model allows for diverse, independent blockchains specialized for various purposes to work together, creating a free alliance of sovereign chains. Polkadot, as the layer 0 protocol, underpins and supports this network of layer 1 parachains, enabling cross-chain interoperability and facilitating the transmission of any type of data or asset between parachains, thereby creating a new paradigm of interchain services, communities, and economies. This multichain architecture serves as the foundation for a new, decentralized internet, commonly referred to as Web3, a term coined by Polkadot’s founder <Popover label="Gavin Wood">Polkadot founder and Ethereum co-founder, well known for his contributions to smart contract technology and blockchain interoperability.</Popover>.

The parachain model brings scalability to blockchain technology in a more decentralized and trustless manner. Transactions are distributed across the network, taking place in-parallel or simultaneously on several blockchains, all of which are secured by decentralized validators.

The parachain model unlocks a multitude of possibilities for blockchain technology and the future of Web3. Parachains bring a plethora of benefits, a few of which include specialization, flexibility, and interoperability.

## [Polkadot’s Consensus Mechanism](polkadot’s-consensus-mechanism)

The Polkadot blockchain has implemented a consensus mechanism known as <Popover label="nominated proof-of-stake (NPoS)">Proof-of-Stake consensus mechanism where nominators (token holders) nominate and back validators with their own stake to secure the network and create new blocks in exchange for rewards.</Popover> to facilitate the selection of validators who are granted the privilege of participating in the network’s governance protocol. A cohort of individuals referred to as validators are elected to perform vital functions such as block production and the validation of transactions. These individuals are held to a high standard of reliability, and are required to demonstrate their commitment through the act of staking their <Popover label="DOT">Native token of Polkadot, serves three purposes: bonding, general operation, and governance.</Popover>, the blockchain’s native token, which serves as a collateral for their adherence to protocol.

While any node may publicly offer itself as a candidate for the role of validator, only a limited number are ultimately elected, due to operational constraints. Additionally, the ecosystem encourages the participation of DOT holders as nominators, who publicly endorse a list of validator candidates they trust and place a corresponding stake of DOT to support their endorsement. This arrangement provides robust security guarantees by enabling the selection of validators with substantial aggregate stake, while simultaneously eliminating candidates with low stake. Furthermore, the election process is informed by a blend of election theory, game theory and mathematical optimization to ensure fairness and security in the selection of validators.

## [Collators’ Role](collators’-role)

In parachain networks, collators play a critical role in maintaining the parachain’s functionality by aggregating transactions from users on the parachain and generating state transition proofs for Relay Chain validators. To accomplish this, they maintain a complete <Popover label="node">Computers or devices that contribute to maintaining the blockchain by validating transactions, storing a copy of the blockchain, and relaying information to other nodes.</Popover> for the Relay Chain and another for their corresponding parachain, enabling them to retain all necessary information to author new blocks and execute transactions, akin to the role of miners on <Popover label="proof-of-work (PoW)">Consensus mechanism in which nodes solve complex mathematical problems to validate transactions and mine new blocks, requiring significant computational power and energy consumption.</Popover> blockchains. In the normal course of operations, they collate and execute transactions to produce an unsealed block, which they then furnish, along with a <Popover label="proof-of-validity (PoV)">Consensus mechanism produced by parachain collators where validators check the validity of transactions rather than solving complex mathematical problems to create new blocks.</Popover>, to one or multiple validators responsible for proposing a parachain block. 

It is worth noting that collators are not required to provide security guarantees, as Polkadot’s protocol provides them. The validators are responsible for assessing the validity of submitted candidates and issuing statements about their validity to other validators. Once a candidate meets the criteria for inclusion, it is included in the Relay Chain block. Furthermore, collators are a vital component of the <Popover label="cross-consensus message format (XCM)">Format that enables the exchange of any type of data between blockchains.</Popover> by facilitating message passing between different parachains.

Technical Infrastructure


One of the main unresolved obstacles to innovation and growth in fundraising is the efficient allocation of capital. To achieve capital efficiency during fundraising, all stakeholders’ incentives must be aligned. Fundraising possibilities as of today are still highly trust-based, centralized, dominated by opaque and inefficient procedures, and limited to the network of projects and/or intermediaries.

- **Centralized processes with inherent counterparty risk**: Given the decisive role centralized funding platforms and other intermediaries currently play in project funding, they effectively act as gatekeepers by imposing non-transparent terms and processes on issuers and participants in their self-interest. Relying on intermediaries in the funding process leads to counterparty risks and exposes issuers and participants to the intermediaries’ inefficient, error-prone, and arbitrary practices.
- **Misalignment of stakeholder interests and information asymmetries**: Centralized funding providers leave participation opportunities up to an individual’s arbitrary judgment and preferences. Intransparency in token allocations, prices, and vesting periods for different types of participants only adds to the information asymmetry between the various stakeholders. This can lead to dire consequences for disadvantaged participant categories, the community, and issuers, and carries a significant reputational damage risk. 
- **Limited accessibility**: Early-stage funding opportunities today are only accessible to corporations and individuals rooted in narrow and, in most cases, exclusive circles. Similarly, centralized funding platforms limit the optimal allocation of capital and access to funding rounds to their client base - which usually is limited to a specific target group. The exclusion of certain participant categories, jurisdictions, and high entry barriers restrict the establishment of a diversified participant/future token holder base. 
- **High costs and lengthy lead times**: Today, projects allocate substantial time and effort to fundraising. Performing funding rounds is time-consuming, stressful, and can negatively impact the project’s development plans. Turning to intermediaries or centralized funding platforms, on the other hand, almost always involves upfront payments and high fees. Instead, projects should be able to focus on creating valuable business models.

Challenges in Fundraising

General Information


**[Deloitte Managed Services](https://www2.deloitte.com/ch/en.html)** is a leading European RegTech Provider of end-to-end managed services for KYC and AML services. They combine their extensive expertise with advanced technology, high-quality data and unique mapping intelligence into easy-to-use solutions, no matter which industry or jurisdiction you operate in.

**[Read](https://www2.deloitte.com/ch/en/pages/core-business-operations/articles/polimec-and-deloitte-switzerland-introduce-new-kyc-credentials-to-enhance-regulatory-compliant-fundraising.html)** partnership announcement.

### [KYC Credentials to Enhance Regulatory Compliant Fundraising](kyc-credentials-to-enhance-regulatory-compliant-fundraising)

Polimec, a decentralized funding protocol developed on Polkadot, and Deloitte Switzerland are joining forces to issue reusable KYC/AML credentials enabling access to global fundraising of digital assets.

Banking grade standard KYC/AML credentials, issued by Deloitte, streamline the process of participating in early-stage fundraising on Polimec. The credentials are anchored on KILT, providing an additional level of regulatory compliance, security, and data privacy.

Users share their KYC/AML documentation exclusively with Deloitte, a company trusted by the largest multinational enterprises and governments worldwide. Deloitte Managed Services then provides KYC/AML credentials in Web3, an evolved version of the internet that incorporates blockchain technologies and decentralized systems. These Deloitte KYC/AML credentials present a more efficient and secure alternative to traditional KYC/AML methods, which typically involve significant time and resources to confirm the identities of customers.

Credentials will be available for natural persons as well as for legal entities in consideration of their respective needs:

- **[Issuers](/learn/network-participants/issuers)**: The credentials serve as authenticity certificates of the legal entity raising funds, instilling trust and accountability in funding rounds.
- **[Participants](/learn/network-participants/participants)**: The credentials allow access to Polimec and enable the categorization into retail, professional, and institutional.

With the introduction of reusable KYC/AML credentials, Polimec revolutionizes fundraising practices by creating a compliant and transparent fundraising environment with the goal of ensuring data ownership for all stakeholders. Now each credential holder gets to choose who holds their data and decide what data to share with whom.

- Issuers are able to offer contribution tokens to individuals/entities that have been appropriately certified by using the required KYC/AML standards, reducing their risk of fraud and ensuring a more secure, more compliant and pseudonymous investing environment. This enables the customization of funding round criteria such as jurisdiction and participant types and provides access for investors based on criteria specified by the issuer.
- Participants no longer need to share KYC/AML documentation with multiple intermediaries and issuers to be compliant. Their sensitive documentation is shared with Deloitte exclusively; they save time and reduce the risk of potential data breaches and identity theft. Participants are also assured of project legitimacy due to the issuer and the founders obtaining KYC/AML credentials.

The result is a fast, accessible, privacy-preserving, and compliant authentication experience.

The KILT infrastructure ensures that KYC/AML credentials can be verified at any time. That verification is documented on Polimec, ensuring that all transactions and network participants can be processed in a regulatory compliant, transparent, and secure manner while preserving data privacy. As a result, Polimec is able to create a secure and regulatory compliant fundraising environment for all involved stakeholders.

Deloitte


**[KILT](https://www.kilt.io/)** is a decentralized blockchain protocol for issuing self-sovereign, anonymous, and verifiable credentials, enabling trust in Web3.

- KILT uses blockchain technology to represent digital identity without intermediaries. It provides a secure way to create, issue, and verify digital credentials.
- KILT allows users to claim multiple attributes about themselves and have them attested by trusted third parties. These attributes are stored and can be recalled whenever needed through the trusted third party.
- KILT does not collect and store any of the data on-chain.

### [Credential System on Polimec](credential-system-on-polimec)

Polimec utilizes credentials issued by trusted third-parties on KILT to ensure adequate knowledge and verification of all network participants. For issuers, it is essential to sell their contribution token only to persons or entities which are properly certified and have met the KYC/AML standards in accordance with jurisdictional or funding round specific regulatory criteria. Credentials ensure that a given Polimec address has met these requirements. For participants, the credentials ensure that they are properly identified and certified to meet regulatory or other requirements in a privacy preserving manner.


**[Moonbeam](https://moonbeam.network/)** is a Polkadot <Popover label="smart contract">Self-executing digital program that automatically enforces the terms and conditions implemented in its code, such as a transaction between parties on the blockchain.</Popover> platform that facilitates the creation of natively interoperable blockchain applications. It simplifies the developer experience by combining full Ethereum compatibility with the power of Polkadot, enabling scalability, cross-chain integrations, and on-chain governance.

### [EVM-Based Fundraising via Polimec](evm-based-fundraising-via-polimec)

Polimec expands to other ecosystems after launching as Polkadot parachain. Therefore, it is essential for Polimec to collaborate with Moonbeam to empower EVM-based fundraising via Polimec.

Moonbeam enables asset teleportation to bridge for example USDC from an EVM-based chain to the Polkadot ecosystem - enabling participations directly from EVM-based chain wallets. Fundraises on Polimec are settled fully on-chain and to bring Polimec’s mission of permissionless access to the next ecosystem, Moonbeam and Polimec collaborate to not only accelerate Polkadot-based projects but also to support EVM-based projects.

Partnerships


Polimec brings together all stakeholders required for sustainable project funding and aligns their multifaceted interests. The following section provides a detailed overview of the different network participants, their roles, and how they benefit from functionalities on Polimec.

The following network participants are involved in funding rounds on Polimec:

- **Issuers** who raise funds
- **Evaluators** who evaluate projects
- **Participants** who participate in funding rounds

All the network participants contributing to the funding round process require attested credentials to interact with the network. Credentials are created and issued by trusted third parties that provide the required KYC/AML services. The credentials are directly accessible on-chain and verifiable at any time via KILT.

Overview Network Participants


Issuers are projects raising funds on Polimec. A trusted third party attests issuers and links the credentials to the projects’ DID. The issuers can submit a project on Polimec by providing all required information as described in the **[funding application](/learn/funding-process/funding-application)**.
 
After providing all required information, the project goes through the evaluation process, where evaluators signal that they expect a specific project to complete the funding round.

Once the issuer has secured the required backing from evaluators, the funding round begins in which retail, professional, and institutional participants can participate.

The following thresholds apply to the total amount raised relative to the target funding amount, which determine the project’s potential outcomes.

*Possible outcomes under the various thresholds:*

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Thresholds</TableHeadCell>
      <TableHeadCell>Outcome Project</TableHeadCell>
      <TableHeadCell>Outcome Evaluators</TableHeadCell>
      <TableHeadCell>Outcome Participants</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>≤33.00%</TableCell>
      <TableCell bgColor="light">Rejected (autom.)</TableCell>
      <TableCell>Slashed</TableCell>
      <TableCell>Refunded</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>33.01%-75.00%</TableCell>
      <TableCell bgColor="light">Project’s Choice</TableCell>
      <TableCell>Slashed</TableCell>
      <TableCell>Project’s Choice<br/>*Declines Funding=Refunded;*<br/>*Accepts Funding=Receive Contribution Tokens*</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>75.01%-89.99%</TableCell>
      <TableCell bgColor="light">Project’s Choice</TableCell>
      <TableCell>Neither Slashed,<br/>Nor Rewarded</TableCell>
      <TableCell>Project’s Choice<br/>*Declines Funding=Refunded;*<br/>*Accepts Funding=Receive Contribution Tokens*</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>≥90.00%</TableCell>
      <TableCell bgColor="light">Accepted (autom.)</TableCell>
      <TableCell>Rewarded</TableCell>
      <TableCell>Receive Contribution Tokens</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

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’ <Popover label="bonded">Locking up tokens as collateral to participate in consensus protocols, secure the network, and earn rewards.</Popover> 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.

Issuers


Evaluators assess projects that applied for funding on Polimec. They are incentivized to evaluate projects correctly as they earn rewards for successful evaluations or are slashed for unsuccessful ones. The incentivization mechanism encourages evaluators to only back projects which they consider to have an above-average success probability and consequently ensures that only projects deemed promising are made available to other participants.

Evaluators have the opportunity to perform due diligence by assessing the whitepaper, team, <Popover label="tokenomics">Parameters that govern the issuance, allocation, distribution, and usage of tokens, considering factors such as supply and demand, market adoption, and network effects.</Popover>, total supply of mainnet tokens, roadmap and usage of funds of a project for 28 days after project submission. 

Evaluators signal that they expect a project to successfully complete the funding round by bonding PLMC. After bonding PLMC for the evaluation of a project, the evaluation lock activates, which means that the bonded PLMC are only available for participation in funding rounds for the evaluated project and voting. The evaluation lock is active until the completion or cancellation of the funding round. The evaluation process informs participants in an open and interactive decision-making process before a funding round starts. Evaluator DID’s can link to social media profiles (e.g. Twitter, Telegram, Discord, Youtube, Github) in a verifiable manner to reach more people and to increase the quality and verifiability of the evaluations. This allows publishing evaluations in an easy-to-access form while also raising project awareness.

Evaluator backing is crucial as a project only progresses to the funding round if it reaches 10% of PLMC bonded by evaluators (in USD equivalent) in relation to the target funding amount. At this stage, failure to meet the 10% threshold does not entail any slashing for the evaluators. However, if the project reaches the 10% threshold and thus progresses to the funding round, the following thresholds apply to the total amount raised relative to the target funding amount, which determine the evaluator’s potential outcomes.

*Possible outcomes under the various thresholds:*

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Thresholds</TableHeadCell>
      <TableHeadCell>Outcome Project</TableHeadCell>
      <TableHeadCell>Outcome Evaluators</TableHeadCell>
      <TableHeadCell>Outcome Participants</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>≤33.00%</TableCell>
      <TableCell>Rejected (autom.)</TableCell>
      <TableCell bgColor="light">Slashed</TableCell>
      <TableCell>Refunded</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>33.01%-75.00%</TableCell>
      <TableCell>Project’s Choice</TableCell>
      <TableCell bgColor="light">Slashed</TableCell>
      <TableCell>Project’s Choice<br/>*Declines Funding=Refunded;*<br/>*Accepts Funding=Receive Contribution Tokens*</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>75.01%-89.99%</TableCell>
      <TableCell>Project’s Choice</TableCell>
      <TableCell bgColor="light">Neither Slashed,<br/>Nor Rewarded</TableCell>
      <TableCell>Project’s Choice<br/>*Declines Funding=Refunded;*<br/>*Accepts Funding=Receive Contribution Tokens*</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>≥90.00%</TableCell>
      <TableCell>Accepted (autom.)</TableCell>
      <TableCell bgColor="light">Rewarded</TableCell>
      <TableCell>Receive Contribution Tokens</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

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.

Evaluators


Participants contribute to funding rounds of projects on Polimec. A trusted third party attests and classifies them into the following categories based on their financial circumstances, governance status, or professional experience:

## [Retail](retail)

The credential category retail is assigned to individuals who do not qualify as professionals.

## [Professional](professional)

The credential category professional is assigned to individuals who:

- are considered <Popover label="High Net Worth Individuals (HNWI)">High net worth individuals, commonly referred to as HNWIs, are individuals with substantial financial resources and investable assets.</Popover>, or
- possess the necessary knowledge based on education, professional experience, or comparable experience in the financial sector to understand the risks of financial decisions and have at their disposal assets of a certain amount

## [Institutional](institutional)

The credential category institutional is assigned to legal entities (non-natural persons) that qualify as professionals, such as:

- Regulated financial intermediaries (e.g. banks, fund management companies, securities dealers, asset managers, regulated insurance companies, etc.)
- Companies with dedicated professional treasury departments

While professional and institutional participants are needed to <Popover label="bootstrap">Self-launching a business without or with only minimum external capital.</Popover> a project economically, retail participants fulfill further funding needs and form an essential part of community building and a distributed token holder base. The three credential categories are based on terminologies that are commonly used in traditional financial markets.

Funding rounds on Polimec are structured to ensure the participation of all three participant types at a similar price, with transparency in token allocations, multipliers, and vesting schedules. The participant categories impact the timing of access to funding rounds (i.e. <Popover label="auction round">First round of the funding round on Polimec where professional and institutional participants submit bids in a candle auction. It determines the final token price as the weighted average of the highest bids that meet the target funding and are above the minimum price set by the issuer.</Popover> vs. <Popover label="community round">Second round of the funding round on Polimec where all participant types participate at the final token price. It concludes when the target funding amount is reached, or after a period of 5 days.</Popover>), the maximum possible participation amounts, the multipliers, and corresponding vesting periods.

Participants


<Callout color="secondary">
Begin your staking journey with Polimec by delegating your PLMC to the collator(s) of your choice. To delegate your PLMC, visit Polimec's **[staking dashboard](https://app.polimec.org/staking)**.
</Callout>

Similar to **[NPoS](/learn/glossary#nominated-proof-of-stake-glossary)**, where DOT holders can participate as nominators, in Polimec’s delegated proof-of-stake mechanism (DPoS), PLMC holders can engage as delegators. By delegating to collators, they are eligible to receive rewards in PLMC in return. This process, referred to as staking, closely mirrors the procedure for DOT holders on the Relay Chain. During staking PLMC, a staking lock is activated, restricting transfers, evaluations, and participation in projects using the staked PLMC.

Staking rewards for collators and their delegators are paid out in PLMC on a round-by-round basis. The effective staking rewards rate is determined by the amount of PLMC staked in relation to the total supply. The more PLMC staked, the less staking rewards per staked PLMC.

For further information on this topic, visit the **[staking page](/learn/staking)**.

Stakers

Network Participants


Polimec deploys a rule- and blockchain-based framework for raising funds in an automated, trustless, and disintermediated manner. The following section provides a detailed overview of the entire funding process on Polimec in chronological order.

*Polimec’s funding process:*

<ImagePop  center src="/images/graph_funding-process-flow.png" caption="Polimec’s funding process" />

Overview Funding Process


### [Participation Currencies](participation-currencies)

Participation currencies are any currencies the issuer accepts for contributing to the funding round and are specified by the issuer in the funding application (e.g. stablecoins, DOT, KSM).

### [Contribution Tokens](contribution-tokens)

Contribution tokens are tokens issued by projects which successfully raised funds on Polimec. They are distributed to evaluators and participants who contributed to the project’s successful funding round. Contribution tokens are transferability-locked in the wallet of participants or evaluators after distribution and are automatically converted to the project’s transferable mainnet token at launch.

The purpose of the contribution token is to provide trust and transparency by serving as proof of participation and is used to incentivize network participants and the community. In addition, it facilitates the efficient distribution of the project’s mainnet token at launch by allowing the migration of balances to the mainnet and conversion of the corresponding contribution tokens in a fully automated process.

### [Mainnet Tokens](mainnet-tokens)

Mainnet tokens are tokens 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. This is achieved by a simple token conversion between the project’s contribution tokens and the project’s mainnet tokens. The conversion rate between contribution tokens and mainnet tokens is set by issuers in the funding application.

Polimec’s balance migration process introduces transparency by maintaining a complete track record of contribution token balances and ensures a secure and efficient token distribution process for issuers and participants.


Tokens on Polimec


Polimec utilizes credentials issued on-chain by specialized, trusted third parties to ensure adequate verification of all network participants. 

For issuers, it is essential to distribute their contribution token only to individuals or entities that are properly verified and have met the KYC/AML standards per jurisdictional and funding round specific criteria. Credentials ensure that a given address always meets these requirements. 

For participants and evaluators, this means that KYC/AML information only needs to be shared with one trusted third-party provider, rather than repeatedly sharing sensitive data with many intermediaries and each of the issuers as required in current setups.

For this purpose, Polimec uses KYC/AML credentials. KYC/AML credentials issued by a trusted third party are anchored on the KILT blockchain. The credentials 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.

*Components enabling Polimec’s on-chain credentials:*

<ImagePop  center src="/images/graph_on-chain-components.png" caption="Components enabling Polimec’s on-chain credentials" />

## [Issuer Credential](issuer-credential)

Any project can apply on Polimec to issue a contribution token, just as they can issue a mainnet token. However, all issuers must obtain an issuer certificate that is attested and issued by a trusted third party after a KYC/AML process to raise funds on Polimec. 

The issuer credential provides participants in funding rounds with a trusted third-party verification of the issuer’s legal entity. It ensures accountability of the issuer, founders and people with signatory rights of the legal entity. The hashes of the credentials are directly accessible on-chain and verifiable at any time via KILT.

## [Evaluator, Participant, and Liquidity Provider Credential](evaluator-participant-and-liquidity-provider-credential)

Evaluators, participants, and liquidity providers must also obtain a certificate attested by a trusted third party to interact with Polimec. 

To claim the credential, the participant submits the information to the trusted third-party provider for conducting the required KYC/AML. After verifying the information, the trusted third party issues the signed certificate (attestation) to the participant. This attestation is cryptographically tied to the participant’s DID and included in the credential.

The hashes of the credentials are directly accessible on-chain and verifiable at any time via KILT, so regulators or authorities can access required information on participants or issuers by contacting the specialized third-party KYC/AML provider. By ensuring that all participants on the network have proper credentials based on their profile, Polimec aims to support all stakeholders in meeting regulatory requirements and provide similar participant protections to those in traditional financial markets.

## [KYC/AML Request Process](kyc-aml-request-process)

To access all functionalities on Polimec, network participants must complete a KYC/AML check performed by a trusted third-party provider to claim their on-chain credentials. Network participants can initiate the credential process by visiting the third-parties’ credential issuance website.

In the next step, network participants must select the credential type they want to claim and consequently provide the requested information to perform their KYC/AML. Polimec distinguishes between issuer and participant credentials (i.e. retail, professional, institutional).

The third-party provider performs the KYC/AML checks according to the requirements or standards of the jurisdiction applicable as determined based on the information provided by the user. After receiving the requested information from the KYC/AML requestor, the third-party provider performs the KYC/AML checks and returns to the KYC/AML requestor (network participant) should there be any issue with the provided data (e.g. incomplete, unreadable, inaccurate). If the KYC/AML check is successful, the third party attests the (now) verified KYC/AML requestor by issuing the credentials to the wallet provided by the requestor in the process.

After receiving the on-chain credential, network participants can interact pseudonymously on Polimec and use all functions while remaining regulatory compliant and secure.

*KYC/AML process flow to get credentials:*

<ImagePop  center src="/images/graph_request-process-overview.png" caption="KYC/AML process flow to get credentials" />

On-Chain Credentials


## [Contribution Token Registration](contribution-token-registration)

Once an issuer is credentialed, the issuer applies for the registration of a new contribution token by specifying the following parameters:

- Token information:
    - Name
    - Ticker
    - Smallest denomination
- Total allocation of contribution tokens available for the funding round
- Minimum price per contribution token
- Target funding amount in USD equivalent
- Maximum and/or minimum ticket size 
- Maximum and/or minimum number of participants for the auction and community round
- Funding round thresholds for retail, professional, and institutional participants
- Participation currencies (e.g. stablecoins, DOT, KSM)
- Issuer destination accounts for accepted participation currencies (for receiving contributions)
<br/>

<Accordion title="Example">
This example, along with the numbers presented in other chapters, has been randomly generated solely for illustrative purposes.

*Example of contribution token registration:* 

<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Contribution Token Registration Parameters</TableHeadCell>
      <TableHeadCell>Example</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>Name</TableCell>
      <TableCell>Nexa</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Ticker</TableCell>
      <TableCell>NXTK</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Smallest Denomination (of PLMC)</TableCell>
      <TableCell>0.0000000001</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Total Allocation of Contribution Tokens Available for the Funding Round</TableCell>
      <TableCell>100,000</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Minimum Price per Contribution Token (in USD)</TableCell>
      <TableCell>10</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Target Funding Amount in USD Equivalent</TableCell>
      <TableCell>1,000,000</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Maximum and/or Minimum Ticket Size</TableCell>
      <TableCell>N/A</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Maximum and/or Minimum Number of Participants for the Auction and Community Round</TableCell>
      <TableCell>N/A</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Funding Round Thresholds for Retail, Professional, and Institutional Participants</TableCell>
      <TableCell>Auction Round: 50%, i.e. 50,000 Contribution Tokens<br/>Community Round: 50%, i.e. 50,000 Contribution Tokens</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Participation Currencies (e.g. Stablecoins, DOT, KSM)</TableCell>
      <TableCell>USDT</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Issuer Destination Account for Accepted Participations Currencies (for Receiving Contributions)</TableCell>
      <TableCell>N/A</TableCell>
    </TableRow>
  </TableBody>
</Table>
</Accordion>

## [Project Information](project-information)

The issuer provides project-specific information to the community, encouraging evaluators and participants to contribute. To give a comparable information basis for all stakeholders to perform due diligence, submitting the following information is mandatory:

- Whitepaper
- Team description
- Tokenomics
- Total supply of mainnet tokens
- Roadmap (next 12-36 months) 
- Usage of funds

Funding Application


## [Evaluation Process](evaluation-process)

Evaluators have the opportunity to perform due diligence by assessing the whitepaper, team, tokenomics, total supply of mainnet tokens, roadmap and usage of funds of a project for 28 days after project submission. Polimec provides a dashboard allowing other participants to analyze the evaluation results. This mechanism fully informs participants and enables sharing of information during the decision-making process.

Evaluators signal that they expect a project to successfully complete the funding round by bonding PLMC. Once the required threshold of bonded PLMC for the evaluation is reached, which is 10% of the target funding amount denominated in USD, a project progresses to the funding round. Evaluations are still possible and will be considered after reaching the threshold, however, in a reward-adapted manner. 

PLMC bonded for evaluations can still be used to participate in the funding round of the evaluated project as well as for voting, and are released at the end of the funding round. 

<Accordion title="Example">
Example funding specifications:

- **Target funding amount: USDT 1,000,000**
- **10% (threshold) of target funding amount: USDT 100,000**

*Evaluators bonding PLMC during the evaluation period:*

<ImagePop  center src="/images/graph_evaluators-bonding-plmc.png" caption="Evaluator Bonding" />

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 28 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.
</Accordion>

## [Social Credit Building](social-credit-building)

The evaluation process includes gamification features, such as social credit building. Evaluators are scored based on past evaluations and can increase/decrease their scores to move up or down in the evaluator ranking. 

Social credit building allows participants to follow evaluators they trust based on publicly available data. Social credit building generally narrows knowledge gaps, as one evaluator may emphasize technical aspects while another may focus more on the potential business case.

A visible track record of evaluators’ assessments further enhances accountability on the network. Furthermore, evaluators can link their pseudonymous identity credentials with social media accounts (e.g. Twitter, Telegram, Discord, Youtube, Github) to increase, and benefit from, their community engagement.


Evaluation

Funding Round


## [Issuer Fee](issuer-fee)

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:*

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Total Amount Raised (x)</TableHeadCell>
      <TableHeadCell>Fee</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>x≤1m USD</TableCell>
      <TableCell>10%</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>1m{'<x<'}5m USD</TableCell>
      <TableCell>8% for any additional USD raised</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>x≥5m USD</TableCell>
      <TableCell>6% for any additional USD raised</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

## [Issuer Fee Calculation](issuer-fee-calculation)
<br/>

<Accordion title="Example">
With the total funding amount raised being USDT 1,083,000, 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:

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Total Amount Raised (x)</TableHeadCell>
      <TableHeadCell>Fee</TableHeadCell>
      <TableHeadCell>Example</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>x≤1m USD</TableCell>
      <TableCell>10%</TableCell>
      <TableCell><Popover label="USDT 100,000">USDT 1,000,000x0.1</Popover></TableCell>
    </TableRow>
    <TableRow>
      <TableCell>1m{'<x<'}5m USD</TableCell>
      <TableCell>8% for any additional USD raised</TableCell>
      <TableCell><Popover label="USDT 6,640">USDT 83,000x0.08</Popover></TableCell>
    </TableRow>
    <TableRow>
      <TableCell>x≥5m USD</TableCell>
      <TableCell>6% for any additional USD raised</TableCell>
      <TableCell>N/A</TableCell>
    </TableRow>
    <TableRow bgColor="dark">
      <TableCell>**Total Issuer Fee**</TableCell>
      <TableCell></TableCell>
      <TableCell>**USDT 106,640**</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

This equals an issuer fee of approx. <Popover label={<strong>9.85%</strong>}>USDT 106,640/USDT 1,083,000</Popover> or <Popover label={<strong>9,850 contribution tokens</strong>}>100,000x0.0985</Popover>. Note that the issuer fee in contribution tokens, i.e. 9,850, is separate from the contribution tokens, i.e. 100,000, sold in the funding round.

The issuer fee in contribution tokens equals the issuer fee in USDT divided by the average token price paid by participants. This average price can be different from the weighted average token price, since participants in the auction round may have entered below that price.
</Accordion>

## [Issuer Fee Allocation](issuer-fee-allocation)

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

*Possible outcomes under the various thresholds:*

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Thresholds</TableHeadCell>
      <TableHeadCell>Outcome Project</TableHeadCell>
      <TableHeadCell>Outcome Evaluators</TableHeadCell>
      <TableHeadCell>Outcome Participants</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>≤33.00%</TableCell>
      <TableCell>Rejected (autom.)</TableCell>
      <TableCell>Slashed</TableCell>
      <TableCell>Refunded</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>33.01%-75.00%</TableCell>
      <TableCell>Project’s Choice</TableCell>
      <TableCell>Slashed</TableCell>
      <TableCell>Project’s Choice<br/>*Declines Funding=Refunded;*<br/>*Accepts Funding=Receive Contribution Tokens*</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>75.01%-89.99%</TableCell>
      <TableCell>Project’s Choice</TableCell>
      <TableCell>Neither Slashed,<br/>Nor Rewarded</TableCell>
      <TableCell>Project’s Choice<br/>*Declines Funding=Refunded;*<br/>*Accepts Funding=Receive Contribution Tokens*</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>≥90.00%</TableCell>
      <TableCell>Accepted (autom.)</TableCell>
      <TableCell>Rewarded</TableCell>
      <TableCell>Receive Contribution Tokens</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

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:*

<RewardTotalCard />

*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.

<Accordion title="Example">
It is imperative to note that the issuer fee, equivalent to USDT 106,640, 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 1,083,000, it can be deduced that the project has achieved over 100% of its target funding. This results in the application of case (iv) where Y=1 and 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 <Popover label={<strong>2,955</strong>}>100,000x0.0985x0.3</Popover>.
</Accordion>

## [Evaluator Rewards Allocation](evaluator-rewards-allocation)
<br/>

<Accordion title="Example">
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**: <Popover label={<strong>2,364 contribution tokens</strong>}>2,955x0.8</Popover>

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Evaluator</TableHeadCell>
      <TableHeadCell>Weight</TableHeadCell>
      <TableHeadCell>Rewards</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>Valeria</TableCell>
      <TableCell><Popover label="0.375">USDT 75,000/USDT 200,000</Popover></TableCell>
      <TableCell bgColor="light"><Popover label={<strong>886.50</strong>}>2,364x0.375</Popover></TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Tim</TableCell>
      <TableCell><Popover label="0.325">USDT 65,000/USDT 200,000</Popover></TableCell>
      <TableCell bgColor="light"><Popover label={<strong>768.30</strong>}>2,364x0.325</Popover></TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Marc</TableCell>
      <TableCell><Popover label="0.300">USDT 60,000/USDT 200,000</Popover></TableCell>
      <TableCell bgColor="light"><Popover label={<strong>709.20</strong>}>2,364x0.300</Popover></TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

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**: <Popover label={<strong>591 contribution tokens</strong>}>2,955x0.2</Popover>

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Evaluator</TableHeadCell>
      <TableHeadCell>Weight</TableHeadCell>
      <TableHeadCell>Rewards</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>Valeria</TableCell>
      <TableCell><Popover label="0.75">USDT 75,000/USDT 100,000</Popover></TableCell>
      <TableCell bgColor="light"><Popover label={<strong>443.25</strong>}>591x0.75</Popover></TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Tim</TableCell>
      <TableCell><Popover label="0.25">USDT 25,000/USDT 100,000</Popover></TableCell>
      <TableCell bgColor="light"><Popover label={<strong>147.75</strong>}>591x0.25</Popover></TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Marc</TableCell>
      <TableCell>not entitled</TableCell>
      <TableCell bgColor="light">**not entitled**</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

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:

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableHeadCell>Evaluator</TableHeadCell>
      <TableHeadCell>All Evaluator Rewards</TableHeadCell>
      <TableHeadCell>Early Evaluator Rewards</TableHeadCell>
      <TableHeadCell>Total Evaluator Rewards</TableHeadCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>Valeria</TableCell>
      <TableCell>886.50</TableCell>
      <TableCell>443.25</TableCell>
      <TableCell bgColor="light">**1,329.75**</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Tim</TableCell>
      <TableCell>768.30</TableCell>
      <TableCell>147.75</TableCell>
      <TableCell bgColor="light">**916.05**</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>Marc</TableCell>
      <TableCell>709.20</TableCell>
      <TableCell>not entitled</TableCell>
      <TableCell bgColor="light">**709.20**</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>
</Accordion>

Reward Payouts


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:

- <Popover label="Instance-ID">Unique identifier assigned to each instance on a blockchain network.</Popover>
- 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. 

Issuance and Distribution


Generally, token distribution plans include various distribution modes to launch the issuer’s mainnet. Instead of factoring all the complexity into the genesis block of a mainnet, Polimec allows this to be set in the contribution token phase to be later migrated to its mainnet. Designing and integrating such complexity directly into the contribution tokens generates trust and transparency. 

On Polimec, the instance-ID of the contribution token and all contribution token balances are migrated to the new mainnet leveraging XCM to ensure that assets are not lost or duplicated across multiple chains.

*Contribution token issuance and mainnet migration:*

<ImagePop  center src="/images/graph_migration-to-mainnet.png" caption="The contribution token issuance and mainnet migration" />

Furthermore, the token distribution process can implement particular balances owned by the issuer or under the control of trusted entities. They can serve as a contribution token reserve for the team, early participants, a foundation, or bounty programs. These accounts are maintained directly by the issuer without any funding token equivalent being transferred. This functionality increases transparency in funding rounds as it shows the exact amount of issued tokens and stores corresponding transaction data on-chain.

Today, projects more frequently explore other designs for token distributions with growing popularity. Airdrops of different forms have gained prominence, especially by allocating tokens to target user groups based on network contribution or interest to bootstrap a network at launch. This proved effective in raising awareness and distributing tokens widely if structured correctly. In particular, such an approach may be appropriate for projects aiming to distribute tokens and incentivize participation amongst a specific audience of potential users that have funding support for network development through other means. Airdrops represent a functionality of Polimec as they support the creation of a user base for the contribution token. Issuers can manage airdrops by engaging with their community to request their Polimec addresses and valid on-chain credentials for <Popover label="sybil attack protection">Strategies and mechanisms designed to safeguard decentralized and distributed systems from security threats posed by malicious users creating multiple fake identities or nodes to manipulate or control the network.</Popover>.

Migration to Mainnet

Funding Process

Calculation Example

Tokenomics


## [PLMC Metrics](plmc-metrics)

- **Network**: Layer 1 on Polkadot (parachain)
- **Native Token**: PLMC
- **<Popover label="Fully Diluted Supply">Total number of tokens issued by a project, including the supply which is still to be issued or released.</Popover>**: 100 million PLMC*
- **Inflation**: 0%*
- **Smallest Denomination**: 10<sup>-10</sup> (0.0000000001 PLMC)
- **Existential Deposit**: 0.01 PLMC
- **Block Time**: ~12 seconds

**For 4 years following the mainnet launch, the total PLMC supply will be capped at 100 million. The total supply may decrease or increase in the future due to changes enacted by PLMC holders via on-chain governance.*

## [PLMC Functionalities](plmc-functionalities)

The Polimec tokenomics are designed to incentivize PLMC holders to actively use the token for its intended purposes on the protocol:

- **[Evaluation](/learn/funding-process/evaluation)**: PLMC holders perform evaluations and signal their confidence in a project by bonding PLMC. Their backing is decisive for a project to proceed to a funding round. Evaluators are rewarded - in contribution tokens of the evaluated project - for correct evaluations, or slashed for incorrect ones.
- **[Participation](/learn/funding-process/funding-round)**: PLMC holders gain access to funding rounds by bonding PLMC. They may participate in the funding round with any other cryptocurrency accepted by the projects (e.g. stablecoins or other tokens).
- **[Staking](/learn/staking)**: PLMC holders earn staking rewards by delegating to collators. In doing so, they get rewarded for providing stability to the network and contributing to validating transactions.
- **[Governance](/learn/governance)**: PLMC holders determine the direction of the protocol by deciding on topics such as protocol development, the inclusion of new network features, and treasury management.

## [PLMC Lock Types](plmc-lock-types)

Polimec implements distinct PLMC lock types. For each lock type, the PLMC holder retains certain action-specific permissions (see table below). For example, all locks still allow voting in governance, and no lock allows for transfers. This has the goal to align the interests of all network participants on Polimec.

*Possible actions under the various lock types:* 

<TableHorizontalContainer>
<Table fixed>
  <TableHead>
    <TableRow bgColor="dark">
      <TableCell></TableCell>
      <TableCell>**Transfer**</TableCell>
      <TableCell>**Evaluate**</TableCell>
      <TableCell>**Participate**</TableCell>
      <TableCell>**Stake**</TableCell>
      <TableCell>**Vote**</TableCell>
    </TableRow>
  </TableHead>
  <TableBody>
    <TableRow>
      <TableCell>**No** Lock</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>**Evaluation** Lock</TableCell>
      <TableCell>No</TableCell>
      <TableCell><Popover label="No">No additional evaluations are possible simultaneously with the same PLMC.</Popover></TableCell>
      <TableCell><Popover label={<strong>Yes</strong>}>PLMC bonded for evaluation can only be used to contribute to the same evaluated project.</Popover></TableCell>
      <TableCell>No</TableCell>
      <TableCell>**Yes**</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>**Participation** Lock</TableCell>
      <TableCell>No</TableCell>
      <TableCell>No</TableCell>
      <TableCell><Popover label="No">No additional participations are possible simultaneously with the same PLMC.</Popover></TableCell>
      <TableCell>No</TableCell>
      <TableCell>**Yes**</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>**Long-Term Holder Bonus** Lock</TableCell>
      <TableCell><Popover label="No">Soft Lock: Transferring is still possible, but will result in the loss of entitlement to the long-term holder bonus.</Popover></TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>**Staking** Lock</TableCell>
      <TableCell>No</TableCell>
      <TableCell>No</TableCell>
      <TableCell>No</TableCell>
      <TableCell>No</TableCell>
      <TableCell>**Yes**</TableCell>
    </TableRow>
    <TableRow>
      <TableCell>**Governance** Lock</TableCell>
      <TableCell>No</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
      <TableCell>**Yes**</TableCell>
    </TableRow>
  </TableBody>
</Table>
</TableHorizontalContainer>

### [Evaluation Lock](evaluation-lock)

The evaluation lock is activated once PLMC has been bonded to evaluate a project. The evaluation lock is active until the completion or cancellation of the funding round. An evaluation period lasts 28 days and is followed by a maximum of three funding rounds which last for a maximum of 11 days. The second funding round, however, can end earlier in the case that all contribution tokens available for sale are allocated to participants. The duration of the evaluation lock can range from 5 days to a maximum of 46 days, depending on the effective time of evaluation, the initiation of the issuer, and the actual durations of the funding rounds. PLMC bonded for evaluation cannot be transferred, staked, or used for evaluating other projects simultaneously. However, PLMC bonded for evaluation can still be used to participate in funding rounds for that same project only, and voting in governance.

### [Participation Lock](participation-lock)

The participation lock is activated once PLMC has been bonded to participate in a funding round. The bond restricts the ability to transfer, evaluate, participate, and stake. Depending on the participation type and the multiplier chosen, participants are subject to varying vesting periods on the PLMC, and mainnet tokens received as a result of their participation. The unbonding of the PLMC starts 7 days after the fundraise and varies between **[0-52 weeks](/learn/funding-process/funding-round#multipliers-and-vesting-periods)**. In contrast, the unbonding of the mainnet tokens starts at the tokens’ mainnet launch, for the same linear unbonding period as applied to the PLMC.

### [Long-Term Holder Bonus Lock "Soft Lock"](long-term-holder-bonus-lock)

The long-term holder bonus lock is activated once PLMC has been bonded to participate in a funding round. The PLMC can still be used for evaluations, participations, staking, and voting, without losing the eligibility for the long-term holder bonus. The token holder must wait to transfer any of the used PLMC and mainnet tokens until 18 months after the mainnet launch of the project in which they participated. Although transfers are still possible, they will lose entitlement to the long-term holder bonus.

### [Staking Lock](staking-lock)

The staking lock is activated once PLMC has been bonded for staking. The bond restricts the ability to transfer, evaluate, participate, and stake. The unbonding period takes 7 days; during this time, no rewards are paid out.

### [Governance Lock](governance-lock)

The governance lock is activated once PLMC has been bonded to vote and follows a similar logic as the one applied for **[governance v1 on Polkadot](/learn/governance)**. The unbonding period of PLMC bonded for governance depends on the conviction multiplier used and lasts 7 days for a 1x conviction multiplier. The bond restricts the ability to transfer.

## [PLMC Transaction Fee Types](plmc-transaction-fee-types)

Transaction fees serve as an economic incentive to encourage efficiency in execution time, computation, and the number of calls required for operations. The protocol incorporates a minimal transaction fee that varies based on transaction types to prevent denial-of-service attacks by malicious actors. Polimec calculates an appropriate transaction weight by using benchmark parameters to measure the time it takes to execute function calls on various hardware, with different variable values, and repeated multiple times. The weights derived from these benchmarks are used as the basis for calculating transaction costs.

Polimec imposes transaction fees on certain transaction types only, such as PLMC transfer, funding application, staking, and governance. All transaction fees flow into the blockchain operation treasury to sustain operations. Some transaction types, such as evaluation and participation, are exempt from transaction fees. 

## [PLMC Allocation](plmc-allocation)

Polimec Foundation initially issues and distributes PLMC as per the schedule below:

<ImagePop  center src="/images/graph_plmc-allocation.png" caption="PLMC Allocation" />

At the token generation event (TGE), PLMC will have a total supply cap of 100 million (100%), which will not increase further for the first 4 years. The specific allocation of PLMC is stated below, in percentage of the total supply at TGE as visualized in the pie chart above and defined as follows:

- **Early Backers (20%)**: Early investors from a globally diversified stakeholder base provided initial funding for the development of Polimec to have early access to the protocol functionalities with PLMC. This funding enables the Polimec Foundation to deliver its minimum viable product (MVP) and embark on the path toward self-sustainability by attracting initial users, creating a feedback loop that continuously enhances the end-user experience. 
- **Employees, Advisors, and Founders (20%)**: The token allocation for the development team, which includes employees, advisors, and founders, is designed to align long-term incentives. In the rapidly evolving Web3 environment, it is crucial to continually monitor and respond to market needs. This requires a constant process of assessing, optimizing, developing, and implementing protocol features. The Polimec Foundation was the key driving force behind the initial protocol development and remains a core contributor to the ongoing development of the protocol.
- **On-Chain Treasury (40%)**: The primary objective of Polimec’s on-chain treasury for PLMC holders is to ensure the sustainable growth of the network through integration programs and project collaborations, incentivizing network participants, and securing the blockchain infrastructure. For this purpose, Polimec distinguishes between the protocol growth treasury, contribution treasury, and the blockchain operation treasury. Of the initial token supply, 40% is allocated to the on-chain treasury, with 75% designated for the protocol growth treasury and 25% for the blockchain operation treasury. For further information on this topic, visit the **[on-chain treasury](/learn/on-chain-treasury)**.
- **Foundation Reserve (20%)**: The long-term reserve for the Polimec Foundation is dedicated to promoting the growth and support of Polimec over several years. This reserve is designed to address future needs and growth opportunities, facilitating a quicker path to the protocol’s self-sustainability through user adoption and network traction.

## [PLMC Release Schedule](plmc-release-schedule)

The initial token amount of 100 million PLMC is generated at TGE and will be released as per the graph below. All token functionalities are enabled at TGE, during freeze and respective linear vesting periods, except for transferability. This means that evaluations, bonding for participations, staking, and governance interactions can be conducted using vested PLMC.

<ImagePop  center src="/images/graph_plmc-release-schedule.png" caption="PLMC Release Schedule" />

On-Chain Treasury


The primary objective of Polimec’s <Popover label="on-chain treasury">Smart contract that holds a cryptocurrency project's funds and manages the allocation of those funds through community governance.</Popover> for PLMC holders is to ensure the sustainable growth of the network through integration programs and project collaborations, incentivizing network participants, and securing the blockchain infrastructure. For this purpose, Polimec distinguishes between the protocol growth treasury, contribution treasury, and the blockchain operation treasury.

### [Protocol Growth Treasury](protocol-growth-treasury)

The protocol growth treasury empowers PLMC holders to fund valuable contributions through governance proposals and grants. It also enables future growth initiatives, such as a single-token model for participations with stablecoins only that allows seamless borrowing of protocol utilities. Furthermore, the allocation supports B2B/B2C integration programs, collaborations with other Web3 projects, additional applications and functionalities, an ambassador program, and community rewards.

### [Contribution Treasury](contribution-treasury)

The contribution treasury consists of issuer fees denominated in their contribution tokens on Polimec and will capture future treasury inflows from each successful funding round. This treasury serves to incentivize liquidity providers, evaluators, and long-term token holders. It allocates the issuer’s contribution token fees to the respective stakeholders as defined in **[reward payouts](/learn/funding-process/reward-payouts)**.

### [Blockchain Operation Treasury](blockchain-operation-treasury)

The blockchain operation treasury is designated to support collators and ensures infrastructure stability without the need for inflating the total token supply. This treasury receives PLMC inflows from slashed evaluators and transaction fees.

*High-level overview of Polimec’s on-chain treasury:*

<ImagePop  center src="/images/graph_on-chain-treasury.png" caption="High-level overview of Polimec’s on-chain treasury" />

Staking

Governance

Glossary


## [Airdrop](airdrop-glossary)

Distribution of a token or other digital assets to reward a project’s community based on certain eligibility criteria.

## [API](api-glossary)

Application Programming Interface is a publicly available interface that allows developers to access and interact with the functionalities of a particular software or platform.

## [Auction Round](auction-round-glossary)

First round of the funding round on Polimec where professional and institutional participants submit bids in a candle auction. It determines the final token price as the weighted average of the highest bids that meet the target funding and are above the minimum price set by the issuer.

## [Bonding](bonding-glossary)

Locking up tokens as collateral to participate in consensus protocols, secure the network, and earn rewards.

## [Bootstrapping](bootstrapping-glossary)

Self-launching a business without or with only minimum external capital.

## [Bounties](bounties-glossary)

Rewards offered to individuals or groups for completing specific tasks, such as identifying and reporting bugs, improving code, or developing new features for a blockchain project.

## [Candle Auction](candle-auction-glossary)

Type of auction where bidders (participants) can place bids during an unknown predefined period of time. The highest bid/bidder at the conclusion of the time period - end defined after auction period ended - is considered the winning bid/winner.

## [Collators](collators-glossary)

Node operators in parachain networks that collect and execute transactions, generate state transition proofs, and provide unsealed blocks to validators for proposing a parachain block, while also facilitating message passing between different parachains.

## [Community Round](community-round-glossary)

Second round of the funding round on Polimec where all participant types participate at the final token price. It concludes when the target funding amount is reached, or after a period of 5 days.

## [Contribution Tokens](contribution-tokens-glossary)

Tokens issued by projects which successfully raised funds on Polimec, serving as proof of participation for participants of the respective funding round.

## [Credentials](credential-glossary)

Verifiable, tamper-proof records that attest identity attributes, skills, achievements, and qualifications of individuals. 

## [Cross-Chain Transfers](cross-chain-transfers-glossary)

Process of transferring tokens or value between different blockchains.

## [Cross-Consensus Message Format (XCM)](cross-consensus-message-format-glossary)

Format that enables the exchange of any type of data between blockchains.

## [CTYPE](ctype-glossary)

Claim types define the structure of a credential.

## [DIDs](dids-glossary)

Decentralized identifiers, globally unique persistent identifiers that do not require a centralized registration authority and are often generated and/or registered cryptographically.

## [DOT](dot-glossary)

Native token of Polkadot, serves three purposes: bonding, general operation, and governance.

## [Evaluators](evaluators-glossary)

Assess projects that apply for funding on Polimec and earn rewards for successful evaluations or get slashed for unsuccessful ones.

## [EVM](evm-glossary)

Ethereum Virtual Machine, a decentralized software used to create decentralized applications and smart contracts.

## [Forks](forks-glossary)

Creating a new blockchain protocol by copying an existing one and making changes to its software or logic.

## [Fully Diluted Supply](fully-diluted-supply-glossary)

Total number of tokens issued by a project, including the supply which is still to be issued or released.

## [Gavin Wood](gavin-wood-glossary)

Polkadot founder and Ethereum co-founder, well known for his contributions to smart contract technology and blockchain interoperability.

## [HNWI](hnwi-glossary)

High net worth individuals, commonly referred to as HNWIs, are individuals with substantial financial resources and investable assets.

## [Instance-ID](instance-id-glossary)

Unique identifier assigned to each instance on a blockchain network.

## [Institutional Participants](institutional-participants-glossary)

Legal entities which qualify as professional, such as financial intermediaries or companies with professional treasury departments.

## [Interoperability](interoperability-glossary)

Ability for a system, such as different blockchains, to exchange or to make use of information and data.

## [Issuers](issuers-glossary)

Projects applying for funding or raising funds using Polimec.

## [KILT Protocol](kilt-protocol-glossary)

A blockchain identity protocol for generating self-sovereign, decentralized identifiers (DIDs) and verifiable credentials. 

## [KSM](ksm-glossary)

Native token of Kusama, serves three purposes: bonding, general operation, and governance.

## [KYC/AML](kyc-aml-glossary)

Know Your Customer, process of identifying and verifying the client's identity aimed at uncovering or preventing fraud, corruption, money laundering and terrorist financing.

Anti Money Laundering, a framework of laws, regulations, and procedures aimed at uncovering or preventing efforts to disguise illicit funds.

## [Layer 0](layer-0-glossary)

Provide the fundamental infrastructure for layer 1 blockchains and are designed to address the challenges prevalent to blockchain systems, including security, scalability and interoperability.

## [Layer 1](layer-1-glossary)

Base protocol layer of a blockchain network.

## [Linear Bonding](linear-bonding-glossary)

Gradually locking up tokens in a smart contract over a specified time period.

## [Liquidity Pool](liquidity-pool-glossary)

Pool of tokens locked in a smart contract that facilitates the trading between the tokens on a decentralized exchange.

## [Liquidity Providers](liquidity-providers-glossary)

Earn fees by offering cryptocurrency assets as liquidity in a decentralized trading pair, which are locked with the protocol for a set period of time.

## [Mainnet](mainnet-glossary)

A project’s fully operational blockchain.

## [Mainnet Tokens](mainnet-tokens-glossary)

Tokens that operate on a project’s fully operational blockchain (mainnet).

## [Minimum Price](minimum-price-glossary)

Minimum price per token set by the issuer during the funding application.

## [Multichain](multichain-glossary)

System where multiple independent blockchains are linked together to enable cross-chain interoperability and communication between them.

## [Multipliers](multipliers-glossary)

Factor applied by participants in a funding round to determine the participation amount in relation to the required bonded PLMC and respective duration of the vesting period of their PLMC and mainnet tokens.

## [Network Participants](network-participants-glossary)

General term for all network participants interacting on Polimec, i.e. issuers, evaluators, participants, stakers, liquidity providers.

## [Nodes](nodes-glossary)

Computers or devices that contribute to maintaining the blockchain by validating transactions, storing a copy of the blockchain, and relaying information to other nodes.

## [Nominated Proof-of-Stake](nominated-proof-of-stake-glossary)

Proof-of-stake consensus mechanism where nominators (token holders) nominate and back validators with their own stake to secure the network and create new blocks in exchange for rewards. 

## [On-Chain](on-chain-glossary)

Activities, transactions, or data that are recorded directly on the blockchain.

## [On-Chain Treasury](on-chain-treasury-glossary)

Smart contract that holds a cryptocurrency project's funds and manages the allocation of those funds through community governance.

## [Parachains](parachains-glossary)

Purpose-built blockchains that connect to the Polkadot Relay Chain to benefit from shared security, cross-chain interoperability and scalability.

## [Parathread](parathread-glossary)

Allow parachains to temporarily participate (on a block-by-block basis) in Polkadot security without needing to lease a dedicated parachain slot.

## [Participation Currencies](participation-currencies-glossary)

Cryptocurrencies that are accepted by the issuer for participating in the funding round (e.g. stablecoins, DOT, KSM), specified in the issuer’s funding application.

## [Participants](participants-glossary)

Participate in funding rounds on Polimec and are categorized as retail, professional, or institutional participants.

## [Permissionless System](permissionless-system-glossary)

Blockchain that allows anyone to participate and transact without the need for approval or permission from a centralized authority/actor.

## [PLMC](plmc-glossary)

Native token for Polimec, serves four purposes: evaluation, participation, staking, and governance.

## [Polkadot](polkadot-glossary)

Heterogeneous, multi-chain network allowing various blockchains of different characteristics to perform arbitrary, cross-chain communication under shared security, enabling cross-chain interoperability and scalability. 

## [Professional Participants](professional-participants-glossary)

Natural persons with the necessary knowledge or experience and/or sizable assets at their disposal.

## [Proof-of-Validity (PoV)](proof-of-validity-glossary)

Piece of information created by collators that parachain validators use to verify the validity of a new parachain block, without the need to store the entire parachain storage.

## [Proof-of-Work (PoW)](proof-of-work-glossary)

Consensus mechanism in which nodes solve complex mathematical problems to validate transactions and mine new blocks, requiring significant computational power and energy consumption.

## [Protocol Inflation](protocol-inflation-glossary)

Gradual increase in the supply of a cryptocurrency resulting from the issuance of new tokens according to the protocol's tokenomics, often used to incentivize network maintenance.

## [Pseudonymous](pseudonymous-glossary)

Practice of using a public key or wallet address where the identity of a person is unknown whereas it is still possible to assign related transactions to the same wallet.

## [Regulatory Compliance](regulatory-compliance-glossary)

Adherence to the laws, regulations, and other provisions set forth by governmental authorities or other bodies that apply to a specific activity or process.

## [Relay Chain](relay-chain-glossary)

Blockchain that coordinates consensus and communication between parachains and external chains.

## [Retail Participants](retail-participants-glossary)

Natural persons that do not qualify as professional participants. 

## [Root Origin](root-origin-glossary)

Concept of root account that has ultimate control over a network's parameters that can make systemic changes. On Polimec, the root origin is the highest privileged origin, and its only used for enacting governance proposals.

## [Rule-Based Framework](rule-based-framework-glossary)

Set of predetermined rules that governs the execution of transactions based on the behavior of network participants or specific circumstances on a blockchain.

## [Runtime Upgrades](runtime-upgrades-glossary)

Allow changes or improvements made to the underlying software or logic of a blockchain while it is still operational (i.e. without the need for a hard fork).

## [SDK](sdk-glossary)

Software Development Kit is a set of software building-tools for specific applications such as protocols.

## [Slashing](slashing-glossary)

Penalty mechanism in blockchains that involves the deduction of a portion of staked tokens for certain types of malicious, erroneous behavior, or i.e. inaccurate funding prediction.

## [Smart Contract](smart-contract-glossary)

Self-executing digital program that automatically enforces the terms and conditions implemented in its code, such as a transaction between parties on the blockchain.

## [Solidity](solidity-glossary)

High-level programming language used for writing smart contracts on the Ethereum blockchain.

## [Stablecoin](stablecoin-glossary)

Type of cryptocurrency designed to maintain a stable value, often pegged to a fiat currency or commodity, providing price stability.

## [Stakers](stakers-glossary)

Delegate to collators who validate transactions and stabilize the network, and in return, earn rewards.

## [Staking](staking-glossary)

Holding/locking up tokens to contribute to validating transactions and supporting the functioning of the network, and in return, earning rewards.

## [State Transition Proof](state-transition-proof-glossary)

Mathematical proof that demonstrates the validity of a transition between two states on a blockchain network, ensuring the integrity and correctness of transactions.

## [Sybil Attack Protection](sybil-attack-protection-glossary)

Strategies and mechanisms designed to safeguard decentralized and distributed systems from security threats posed by malicious users creating multiple fake identities or nodes to manipulate or control the network.

## [Tokenomics](tokenomics-glossary)

Parameters that govern the issuance, allocation, distribution, and usage of tokens, considering factors such as supply and demand, market adoption, and network effects.

## [Trustless](trustless-glossary)

Ability of a system to function without the need for network participants to trust each other or a central authority/actor.

## [Unbonding](unbonding-glossary)

Withdrawing tokens from a staking pool or other activities, which takes a certain amount of time to complete.

## [Validators](validators-glossary)

Node operators in a proof-of-stake (PoS) blockchain that validate transactions and proofs from collators on parachains, and create new blocks along with other validators to earn rewards.

## [Verifiable Random Function (VRF)](verifiable-random-function-glossary)

Cryptographic tool used to ensure fair and tamper-proof random selection of events.

## [Vesting](vesting-glossary)

Gradual release of tokens over a specified period of time, often used as a mechanism to incentivize long-term commitment from token holders.

## [Web3](web3-glossary)

Third generation of the world wide web, characterized by the use of decentralized technologies such as blockchain, smart contracts, and peer-to-peer networks.


What is Polimec?

About Polimec

Community

Development

Differentiator

Regulatory Basis

KYCAML Credentials

Others

Collaborations

Learn


<Callout color="secondary">
Get your KYC/AML credential **[here](https://kyc-credentials.com/home)** and follow the step-by-step user guide below.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/bsOPRAAuytk?si=rXXjhCfNKoc9nKcu" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec's **[on-chain credentials section](/learn/funding-process/on-chain-credentials)**.

How do I get my Deloitte KYC/AML credential?

Credentials


<Callout color="secondary">
To connect to Polimec, visit **[Polkadot-JS](https://polkadot.js.org)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/o-9VqEWGo50?si=7OylO7DU-BNHv9ZN" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

How do I connect to Polimec on Polkadot-JS?


<Callout color="secondary">
To check your PLMC wallet balance, visit Polimec’s **[app](https://app.polimec.org)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/CkkpbBoMkHQ?si=1V72Wg5j_2JEn4cp" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

How do I check my PLMC wallet balance?


<Callout color="secondary">
To unlock your vested PLMC, visit **[Polkadot-JS](https://polkadot.js.org)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/hwLjmfDsawY?si=BU56vapeQ211Q_U-" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

How do I unlock my vested PLMC?

General


<Callout color="secondary">
Begin your staking journey with Polimec by delegating your PLMC to the collator(s) of your choice. To delegate your PLMC, visit Polimec’s **[staking dashboard](https://app.polimec.org/staking)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/56DMM4XCmc4?si=0mPseatvah79eh_s" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[staking section](/learn/staking)**.

How do I stake my PLMC?


<Callout color="secondary">
To change your delegation amount, visit Polimec’s **[staking dashboard](https://app.polimec.org/staking)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/eFIBtrRsws0?si=LPb29c-I-VsBbzfJ" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[staking section](/learn/staking)**.

How do I change my delegation amount?


<Callout color="secondary">
To revoke your delegation, visit Polimec’s **[staking dashboard](https://app.polimec.org/staking)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/I13YFg5EPWA?si=p8f20_zPCzzEF2n1" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[staking section](/learn/staking)**.

How do I revoke my delegation?


<Callout color="secondary">
To adjust the auto-compounding percentage on your delegation, visit Polimec’s **[staking dashboard](https://app.polimec.org/staking)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/ak7BWwqa7Jg?si=Y9u2EYgOVXfNdyWO" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[staking section](/learn/staking)**.

How do I adjust the auto-compounding percentage on my delegation?


On Polimec, network participants require two distinct wallets: a wallet for KYC/AML credential and a funds wallet with PLMC and/or participation currencies. Below is an overview of wallets currently compatible with Polimec.

It should be noted that the wallets and hardware devices listed are third-party products. Polimec does not endorse any specific wallet. Furthermore, the list of compatible wallets may be subject to change, depending on their ongoing compatibility with the protocol.

## [KYC/AML Credential Wallet](kyc-aml-credential-wallet)

To access all functionalities on Polimec, network participants must complete a KYC/AML check performed by a trusted third-party provider to claim their on-chain credential. Network participants can initiate the credential process by visiting the third-parties’ credential issuance website. Currently, the only KYC/AML wallet supported on Polimec is the Deloitte wallet, which is based on Sporran and can be downloaded **[here](https://kyc-credentials.com/)**.

## [Funds Wallets](funds-wallets)

Polimec currently supports a range of wallets that have integrated PLMC and offer broad support for the Polkadot ecosystem:

- **[Polkadot-JS](https://polkadot.js.org/extension/)** (supports Polkadot Vault)
- **[Subwallet](https://www.subwallet.app/)** (supports Polkadot Vault)
- **[Talisman](https://www.talisman.xyz)**

Participants must install the wallet extension in their web browser. Once installed, the wallet will appear in the list of selectable wallets when connecting a funds wallet to Polimec through the app.

Additional wallets will be included as they add support for Polimec. If you represent a wallet provider that has integrated PLMC support, **[contact us](mailto:info@polimec.org)**.

## [Signers/Hardware Wallets](signers-hardware-wallets) 

Always ensure the safety of your seed and private keys. Polimec does not have access to users’ seed or private keys and cannot provide assistance in cases where an address, seed, or private keys is lost.

Most funds wallets compatible with Polkadot Vault enable the offline storage of seed and private keys. For the latest Polimec metadata updates, Polkadot Vault should be updated **[here](https://metadata.novasama.io/?tab=1#/polimec-mainnet)**.

It should be noted that Ledger support for Polimec is currently unavailable. Wallets may vary in their offerings for offline storage of seed and private keys. Polimec holds no responsibility for the ongoing compatibility of such devices or methods.

*Being listed as a compatible wallet is neither an endorsement, nor a recommendation from Polimec or Polimec Foundation. Neither Polimec, nor Polimec Foundation has vetted or curated the list of wallets and assumes no responsibility with regard to the performance, security, accuracy, selection or use of any third-party offerings, services or products. Neither Polimec, nor Polimec Foundation assume any responsibility for the usage of the listed wallets and exclude all liability that may arise with respect to or as a result of such usage.*

Which wallets support PLMC?

Wallets


<Callout color="secondary">
To check your PLMC wallet balance, visit Polimec’s **[block explorer](https://explorer.polimec.org/polimec)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/twOa-jy10xY?si=-3n61nyyoInBe_Jh" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>


<Callout color="secondary">
To check your transfers and staking rewards, visit Polimec’s **[block explorer](https://explorer.polimec.org/polimec)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/n3hY74qoqsw?si=lbzjTRp9nWbLSvVp" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

How do I check my transfers and staking rewards?


<Callout color="secondary">
To check an extrinsic, visit Polimec’s **[block explorer](https://explorer.polimec.org/polimec)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/XWyDoDo3-cQ?si=EfbHGVm9E8NF9-Xr" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

How do I check an extrinsic?

Block Explorer


<Callout color="secondary">
To check the latest proposals and referenda, visit Polimec’s **[governance dashboard](https://app.polimec.org/governance)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/KdNx3xXL1uo?si=yXoCRe3yHOGP0Q9O" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[governance section](/learn/governance)**.

How do I connect with the governance dashboard?


<Callout color="secondary">
To vote on a referendum, visit **[Polkadot-JS](https://polkadot.js.org)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/p89wheLqhdE?si=Lqx_ydzQJyd4JuSo" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[governance section](/learn/governance)**.

How do I vote on a referendum in Polkadot-JS?


<Callout color="secondary">
To vote on a referendum, visit **[Polkassembly](https://polimec.polkassembly.io/)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/S33JbgnSj70?si=u41i5Rb_uUsKHesl" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[governance section](/learn/governance)**.

How do I vote on a referendum in Polkassembly?


<Callout color="secondary">
To vote with staked PLMC, visit **[Polkadot-JS](https://polkadot.js.org/)**.
</Callout>

<iframe width="560" height="315" src="https://www.youtube.com/embed/wlpk7-XtFcw?si=scMEYUzAEk6hMhZg" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>

For further information on this topic, visit Polimec’s **[governance section](/learn/governance)**.

But first ... Cookie policy

Moonbeam

EVM-Based Fundraising via Polimec