Introducing Crowdpooling on DODO: A Novel Token Distribution and Market Initiation Method
Crowdpooling, a unique blend of "crowdfunding" and "liquidity pool," represents an innovative approach for token distribution and initiating liquid markets, accessible to everyone. Drawing inspiration from the call auction mechanism in securities markets, Crowdpooling ensures equitable participation, free from the haste of experts or bot interference common in other DEX liquidity offerings. Enhanced by a liquidity protection period, it assures users a secure environment to support their favorite projects.
The Crowdpooling Process#
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Initiation by Project Owners: The process begins with project owners supplying a number of tokens, setting an initial offering price and a token cap. A part of these tokens is allocated for crowdfunding, while the rest serves as ask-side liquidity.
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Defined Campaign Duration: Owners set a start and end time for the Crowdpooling campaign, inviting open participation by staking capital.
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Token Distribution: Post-campaign, participants claim tokens based on their stakes at the pre-set offering price. In cases where capital surpasses the token cap, tokens are distributed proportionally at the initial price, with excess capital refunded.
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Public Pool Creation: Following the Crowdpooling phase, new public liquidity pools are automatically created for the token on DODO, with the initial market price set at the offering price, facilitating immediate spot trading.
Additional Features and Security Mechanisms#
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Pre-deposited Settlement Fees: To ensure smooth transaction execution, project owners pre-deposit a settlement fee (currently 0.2 ETH). The executor of the transaction concluding the Crowdpooling campaign receives this fee.
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Liquidity Protection: This mechanism safeguards against sudden liquidity withdrawal by the project team, ensuring a balanced and fair market. Liquidity is composed of bid-side from participants and ask-side from reserved tokens, with the creator unable to withdraw during the protection period.
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Flexible Participation and Pricing Models:
- Crowdfunding Quota: Different user quotas can be set, allowing for whitelisting and tiered participation based on criteria like vDODO balances.
- Bonding Curve vs Fixed-Price: DODO V2 supports both models, with the former seeing price escalation along a curve and the latter having a fixed price.
Advantages of Crowdpooling#
- Fairness and Security: Crowdpooling prevents frontrunning and ensures that proceeds are used effectively to create a liquid market.
- Efficient Token Distribution: It serves as a one-stop solution for new asset distribution, building a robust foundation for future interest and capital influx.
- Market Guidance: For assets with limited liquidity elsewhere, Crowdpooling offers a way to release significant liquidity, acting as a price guide for external markets.
In essence, Crowdpooling on DODO is more than just fundraising; it's a comprehensive approach to fair and secure token distribution, ensuring immediate liquidity and market health for new tokens.