Introducing SakeSwap ILO, a decentralized crowdfunding mechanism that creates AMM liquidity pools directly with higher liquidity utilization
2020 may have been filled with challenges, but DeFi protocols, BTC, ETH, Polkadot and stablecoins are the undoubted top performing crypto assets for the year. With the DeFi and DEXes boom increased in popularity and diversity, it’s time for DEXes to revamp the centralized initial exchange offering model.
After the successful launch of Swap, SakeSwap focuses on the development of the Asset Issuance Platform + Swap, positioning itself as coinlist + swap. The new feature, ILO (Initial Liquidity Offering), is an innovative crowdfunding mechanism that creates AMM liquidity pools directly for projects and investors. With ILO, projects built on Ethereum and Polkadot will be able to easily raise and exchange capital in public and develop from stage 0 to 1 with higher liquidity utilization.
What can ILO bring?
- Projects can list their tokens and use the platform to raise funds with lower cost and simpler process.
- A seamless fusion of token issuance and trading.
- The “Liquidity Provider (LP) Token Lock Period” feature can provide ILO projects with more stability.
- The Community Voting provides ILO projects and their investors with increased transparency.
- Investors, whales or retail traders will get the same opportunity to obtain priority access to ILO listings.
- Projects and investors will become Liquidity Providers after ILO and receive Liquidity Provider (LP) Token according to the scheduled LP Unlock Frequency.
How can ILO maximize the liquidity utilization?
- Projects only need to provide liquidity for the Project Token and investors to contribute the Fund-Raised Token. Once an ILO is successful, a liquidity pool with the Project Token/Fund-Raised Token at a ratio of 50/50 will be automatically created on SakeSwap.
- LP Token from the liquidity pool with the Project Token/Fund-Raised Token will be distributed to projects and investors according to the scheduled LP Unlock Frequency. LP tokens can track the contribution to the liquidity pool and are used for distributing shares of the transaction fees accumulated.
There is a 0.3% fee on each SakeSwap transaction with 0.25% rewarded to LP token holders, 0.045% for buyback and burn SAKE, and the remaining 0.005% will be distributed to the SakeBar. SakeBar will be replaced by LockBar. The LockBar will distribute every 12-month.
The SAKE token has 2 functions. It entitles SAKE holders with governance rights and a portion of the fees is paid to the protocol and eventually the protocol will be owned by SAKE holders. It also entitles liquidity providers and users to continue earning benefits from the development of the protocol, which means the early adopters will be significant stakeholders of SakeSwap.
SakeSwap involves tokenomics of deflation to support the token price from a structural perspective. Meanwhile, the rising awareness of SakeSwap ILO will pose a very significant influence on the price of SAKE token.
How to participate in ILO?
When a decentralized project wants to raise funds through SakeSwap ILO:
- The project is required to create an ILO listing on the ILO landing page which should include the outlines of the Project and Token Info, Pool/Liquidity Cap, Investor Access & Contribution Limits, ILO Dates & Token Unlock Period, Project Owner Contact and other project details.
- After submitting the ILO information, a SakeSwap Community Voting will be created on Snapshot. The SAKE community has the final decision on which ILO project to go live on SakeSwap.
- The ILO projects will need to provide the project tokens to SakeSwap ILO smart contract upon the approval from the SAKE Community.
- If the funding requirements are met within the specified timeframe, an AMM liquidity pool with the Project Token/Fund-Raised Token will be created on SakeSwap which means the Project Token will be tradable immediately. If the ILO does not meet the minimum cap required by the project, all fund-raised tokens will be released by the smart contract which means the investors will get back the tokens.
- Project and investors will receive a certain amount of LP token as the proof of liquidity provision. There will be a Lock Period for LP release which is set up by the ILO project when creating ILO.
- With the LP token, holders can participate in the SakeSwap Farming to earn SAKE rewards and more airdrop campaigns will be launched for ILO participants.
When creating ILO, projects can choose ETH/ WBTC/ USDT/ USDC/ DAI as the fund-raised token. All funds are protected by the Ethereum smart contract. Currently, SakeSwap ILO is only deployed on Ethereum. The deployment on Polkadot will be in the future pipeline to help more good projects raise funds in a decentralized and efficient way.
SakeSwap ILO page: https://app.sakeswap.finance/#/liquidity-offering
SakeSwap Swap page:: https://sakeswap.finance/
Community Vote: https://snapshot.page/?from=singlemessage#/sake
SakeSwap Info: https://info.sakeswap.finance/
Useful Tutorials: https://www.youtube.com/playlist?list=PLMAvf3CWmVcaQnE-JgomMNsCkzhVvWwpc