What Is Polkastarter (POLS)?
The platform allows cryptocurrency projects to raise funds by setting up a swap pool based on a fixed purchase rate for tokens. These so called “Fixed Swap Pools” have many advantages for token sale investors over traditional fundraising models like ICOs, IEOs and IDOs (Initial DEX Offerings). Fixed Swap Pools will maintain the token price throughout the sale until the initial supply is bought.
With Polkastarter, decentralized projects will be able to raise and exchange capital cheap and fast. Users will be able to participate in a secure and compliant environment and to use assets that go way beyond the current ERC20 standard. Startups and projects can raise funds on Polkastarter’s interoperable and decentralized infrastructure.
Polkastarter Storage Key Points
|Circulating Supply||93,221,432.00 POLS|
|Source Code||Click Here To View Source Code|
|Explorers||Click Here To View Explorers|
|Twitter Page||Click Here To Visit Twitter Group|
|Whitepaper||Click Here To View|
|Official Project Website||Click Here To Visit Project Website|
What problem is Polkastarter trying to solve?
The first ever Initial Decentralized Exchange Offering (IDO) of Raven Protocol took place on Binance DEX on June 17th 2019. At the time, decentralized exchanges, or DEXs, had yet to gain much traction in the market. With the explosion of DeFi in 2020, DEXs increased in popularity, and IDOs became an inexpensive way to get around the centralized initial exchange offering model.
While IDOs on Uniswap certainly decreased the initial expense for a project’s token listing, that convenience came at a steep cost. The crypto community quickly adjusted to this new token launch mechanism. Savvy investors began to front-run listings immediately after a large amount of liquidity was provided to a Uniswap pool.
Polkastarter Some would purchase the entire pool in one swoop, causing the crypto asset to soar in price as others attempted to do the same. The term “ape in” to a liquidity pool was born to describe those who turned up the gas on their Meta Mask wallet to buy out entire pools of newly-created tokens at lower prices before others did the same.
What is a Fixed Swap Pool?
Polkastarter will allow projects to list at a fixed price, which will be maintained for as long as there are tokens remaining in the original supply. This should ensure less volatility around a token launch. It also allows a project and its investors increased transparency over the amount of money raised and tokens sold. This data is not as easily calculable when the tokens sold varies greatly with price volatility.
How Liquidity Pools work in AMM Swap Platforms
A liquidity pool offers users liquidity at any price level. This property is a valuable benefit for projects seeking immediate liquidity for their project’s token. When the token has yet to go through an extended price discovery phase, it is really anyone’s guess as to its value. Thus, when a project creates a new liquidity pair for its protocol token, the initial price swings can be quite volatile, especially when there is less than $100,000 of value in the pool.
Each time a user swaps a token with the liquidity pool, the pool’s balance ratio shifts. Let’s say we have a pool that allows you to swap watermelons for grapes. The current rate for swapping watermelons for grapes is one against seven. At the moment, the pool holds 12 watermelons and 80 grapes. Next, Alice swaps one watermelon for seven grapes.
Now, the pool consists of 13 watermelons and 73 grapes. To offer liquidity at each price level, the pool needs to maintain an equal value balance (50/50 ratio). Polkastarter Therefore, the smart contract controlling rate will automatically adjust the ratio, so each pool’s value is equal. Let’s divide 73 by 13, which results in the new ratio of 5.61 grapes per watermelon. This new ratio ensures a 50/50 ratio for both currencies in our liquidity pool.
Why Use a Fixed Swap Pool?
As Polkastarter can see, each time they swap with the liquidity pool, the rate changes. As projects try to launch their token via AMM liquidity pools, a popular token’s price can rapidly increase when plenty of investors buy it. This price increase is caused by the bonding curve model that liquidity pools implement.For that reason, a fixed swap pool sets a fixed price for token swaps.
Projects who want to use the Initial DEX Offering (IDO) model know precisely how much money they’ve raised and how many tokens they’ve sold. They know that their fresh community of token holders has paid a fair price. Conversely, the new token holders can be confident that the value they have contributed will go directly to the development of the project.