Polkastarter Launches New Mechanism By Which Token Prices Can Be Kept Constant
Polkastarter, a decentralized exchange on the Polkadot platform, is launching a crowdfunding mechanism with several projects lined up to deliver token sales through the platform.
Through the” fixed Swap Pool”, projects can list their tokens and create a pool with a fixed purchase rate per token.
The product will be released on December 15, and in the first three days of launch, the platform will use three projects to raise funds. These include two Decentralized Autonomous Organizations, SpiderDAO and Mahadao.
The first decentralized exchange offerings, or Idos, first appeared in the second half of 2019, but at the time, decentralized exchanges or Dex had not yet received much interest in the market. With the explosion of decentralized finance in 2020, Dex’s popularity has increased and Idos have become a cheap alternative to the centralized first exchange offering Model.
However, to launch an IDO, a project was required that would provide both the liquidity of the asset to be sold and the liquidity of the currency to be traded against it. Automated market makers would adjust the token sale price throughout the sale, depending on supply and demand.
But this is causing whale investors to “get stuck” by increasing gas charges and buying up entire newly created liquidity pools in an attempt to secure lower-priced tokens.
Polkastarter to allow tokens to be listed at fixed price
Polkastarter will allow projects to be listed at a fixed price, which will be retained as long as there are tokens remaining in the original supply. This can provide less volatility around a token launch.
It also allows a project and its investors to increase transparency over the amount of money raised and tokens sold. This data cannot be easily calculated when the tokens sold vary greatly according to price volatility.
Polkastarter will also provide additional tools for projects looking to collect resources, including anti-money laundering and ensuring compliance with customer recognition. These tools will not be mandatory but will be available when projects require them.
Polkadot ecosystem, which polkastarter is working on, recently announced the DeFi Alliance, which has Chainlink as its founding members.