In our Problem Statement Series, we broke down the issues in current fundraising methods that Polimec will solve. To recap, the existing insufficiencies are:
- Cost and time inefficiencies
- Restricted access for some investors
- Centralized intermediaries and their risks
- Misalignment of interests.
While there are no direct competitors to Polimec for regulatory compliant, decentralized, and trustless on-chain primary markets coverage, a question we often face is how Polimec differs from existing structures such as launchpads or IEOs.
Launching Into Chaos?
Launchpads or IEOs are faced with many of the problems outlined in our Problem Statement Series. Besides general disadvantages, such as their opaque processes, regulatory uncertainty, and counterparty risk, one of the key issues of such centralized providers is their pay-to-win (or even pay-to-play) structure. Conducting a token sale through such a platform often comes with steep requirements and upfront commitments — making it unfeasible for smaller projects that cannot bear the tedious and costly administrative processes.
From the point of view of the investors, contributing to token sales often requires volatile underlying assets, and after investing, the funds are pooled/commingled. Which deals are open to investing is also decided by a centralized committee with incentives that are neither aligned with investors nor with the project. Instead, the rational goal of the committee is to have a maximum throughput of projects and collect as much fees as possible — rather than creating a stable, long-term-oriented community and framework for the project.
Polimec Is Not a Launchpad
On Polimec, the incentives are aligned between all stakeholders as a result of the protocol’s design. All modules are directly on-chain: This approach is transparent, eliminates counterparty risk, provides instant settlement (guaranteed by Polkadot), and grants 24/7 uptime without centralized points of failure.
Polimec’s rule-based approach also allows full automation from token sale through mainnet launch and features a decentralized process for selecting deals that are outsourced to various investor types. The pay-to-win structure of launchpads is eliminated, and projects that pass the evaluation round can raise funds without upfront costs — creating a more level playing field and, ultimately, promoting innovation and supporting the best ideas globally without artificial access restrictions.
