DeFi‘s unique ability to connect people to financial services who lack it has long been lauded. Indeed, many decentralized platforms are developed with a goal of promoting financial inclusion. Yet DeFi‘s inclusive ethos has thus far ignored one of the most important areas of the financial landscape: Funding
While ICOs, STOs, exchange raises, and many other types of token-powered fundraising mechanisms opened up the world of funding to many new projects and investors, there was still a high barrier to entry. The costs associated with holding a token sale could easily reach anywhere from a few thousand dollars to a few million — a sum that many early-stage projects simply cannot afford, particularly in developing regions.
This lack of a truly inclusive fundraising mechanism has served to distinguish the “haves” and “have nots”. Projects that are able to secure the resources needed for their work are able to move forward, while teams that cannot access capital are simply unable to realize their visions. This limits the number of people developing DeFi technology, which slows the pace of innovation.
That’s why DODO developed Crowdpooling, a one-stop fundraising and token distribution solution designed to work for everyone. Anyone can use Crowdpooling with minimal starting capital — making funding more accessible, enabling projects everywhere to access the resources they need to grow, and accelerating the pace of innovation. Not only can Crowdpooling provide funding for new projects — it can also kickstart liquidity pools that build a solid foundation for an influx of interest and capital, regardless of bid size.
Who Can Start a Crowdpooling Campaign on DODO?
Crowdpooling is open to anyone. To begin a Crowdpooling campaign, simply visit the Crowdpooling listing page on the DODO App and select “Launch a Crowdpooling Campaign.”
After initiating the campaign, users are asked to deposit a settlement fee. As of December 2021, this fee amounted to 0.2 ETH (roughly $80 USD.) They are also prompted to supply tokens that will be used for crowdfunding and ask-side liquidity.
Once the tokens have been supplied, issuers set a soft-cap target and initial offering price for their coins. They also need to designate the time frame during which the campaign will be conducted. After the campaign begins, anyone can participate in it by staking their capital. When the campaign ends, investors receive their share of the issued tokens according to how much they staked at the pre-set offering price.
The capital raised during the campaign will automatically be used to set up public liquidity pools at the campaign’s conclusion. This way, token liquidity is activated as soon as the campaign is finished. Additionally, tokens previously reserved for ask-side liquidity become available.
In the past, all kinds of projects have used Crowdpooling to fundraise and kickstart token liquidity on DODO. Here are some recent examples:
How Does Crowdpooling Help Keep Investors Safe?
Crowdpooling is designed to be beneficial not only to token issuers, but also to the investors who participate in campaigns.
Unlike other kinds of token-powered fundraising mechanisms, every Crowdpooling participant starts on an equal footing. This practice discourages frontrunning, which is what happens when a participant uses the timing of their investment to gain an unfair advantage. By distributing tokens at the exact same time, Crowdpooling prevents frontrunning — regardless of the timing of their commitment, each participant receives the same proportional allocation. “The early bird gets the worm” is a widespread attitude in crypto, but with Crowdpooling, others can get it, too.
Crowdpooling has also introduced a liquidity protection period that bars token issuers from removing tokens from liquidity pools. This stops token issuers from immediately draining pool-side liquidity after a Crowdpooling event has ended, a practice commonly known as “rug pulling.” Participants also have some flexibility regarding their contributions: during the 48-hour period when a campaign is active, participants are free to deposit and withdraw tokens as they wish. After that, withdrawals continue for an additional 12-hour “cooling off” period, giving participants one last opportunity to reconsider their investment.
It’s important to note that DODO is not liable for Crowdpooling contributions, and does not provide compensation for any asset losses caused by project mismanagement, malicious token minting, or secondary market manipulation. Cryptocurrencies are high-risk investments — always proceed with caution and be aware of potential risks.
DODO’s Mission
DODO’s mission is to provide users with the best possible decentralized trading experience. The ability to offer support for the distribution and liquidity of new assets is an important part of that mission: through Crowdpooling, we are able to establish liquidity for new assets, while simultaneously offering users early access to them. Crowdpooling’s low capital requirements mean that token issuers can afford to raise the funds they need to envision, innovate, and create the future of DeFi.
Learn more about Crowdpooling here.
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