Tokenomics

• Network: Layer 1 on Polkadot (parachain)
• Native Token: PLMC
• Fully Diluted Supply: 100 million PLMC*
• Inflation: 0%*
• Smallest Denomination: 10^-10 (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.

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

• 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: 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: 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: 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.

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:

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.

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. 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.

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.

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.

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. 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.

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.

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

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.
• 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.

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.