Gaps in Existing Solutions
The problems and our approach to the solutions.
The most important of which, plainly said, is we have a bunch of cutting-edge early-stage teams that need funding, and an abundance of sidelined investor capital, with too few options to connect these eager parties in a compliant, responsable, and secure manner.
The solutions that exist can be either not complete, not compliant, or lack the transparency and reporting that leads to the degradation of token stability.
Problem: As previously stated, teams need funding, and investors want to deploy capital, but these two parties struggle to find each other or the tools to facilitate investment. Solution: We provide a platform where vetted projects can raise capital, and we also provide a simple interface for investors to conduct investment transactions.
Problem: Often, platforms have zero or simply incomplete disclosure. Platforms are generally not transparent about their operations, token movements, and lack of team and founder locking, leading to potential scams and rug pulls. Solution: We address this with a 3rd party integration with Xerberus, which brings transparency and detailed public reporting to the process, with investors seeing token visualization reports directly in our platform dashboard.
Problem: Most platforms simply ignore compliance, make no effort to conduct KYC (Know Your Customer), and ignore the development of meaningful investor/platform protections.
Solution: We utilized a 3rd party KYC; and here are eight reasons why:
- 1.Regulatory Compliance: In many jurisdictions, financial intermediaries must perform KYC checks to ensure compliance with anti-money laundering (AML) and combating the financing of terrorism (CFT) regulations. By conducting KYC, our platform can greatly reduce the risk of legal repercussions.
- 2.Avoiding Potential Sanctions: By conducting KYC, we can ensure we are not inadvertently facilitating transactions for individuals or entities on international sanctions lists.
- 3.Risk Management: KYC can be a tool to reduce fraud and other malicious activities. It can prevent sybil attacks where a single entity pretends to be multiple participants to gain undue advantages or allocations.
- 4.Access to Traditional Banking Infrastructure: IPD PAD and our launch customers that interface with traditional financial systems (e.g., for fiat on/off ramps) might be required by their banking partners to conduct KYC checks.
- 5.Project Requirements: Projects launching on our launchpad can ensure fair distribution, prevent whale manipulation, or comply with their legal advice.
- 6.Future Proofing: The regulatory landscape around crypto and DeFi is evolving. Implementing KYC from the outset can prepare IPD PAD for potential future regulations.
- 7.Protecting the Broader Ecosystem: By ensuring that bad actors are kept out of the ecosystem, the DeFi space can grow and evolve healthier, potentially negating regulatory overreach and benefiting our reputation and DeFi in the long run.
- 8.Building Trust: By adhering to recognized standards, traditional investors can feel more comfortable knowing that our platform is taking steps to ensure transparency and compliance.
Problem: If the blockchain fails, it could create a total investment loss.
Solution: The core of our platform is built on Cardano, which has never had an outage, even under high-stress loads and attacks. Cardano, developed by IOHK (Input Output Hong Kong), has always emphasized a research-driven approach to blockchain development. The platform has produced numerous academic papers related to the protocol, consensus algorithm, smart contracts, and other facets. We believe that the proven resilience, security, and openness of the protocol make it the best choice for DeFi.
Problem: We have seen a very concerning pattern of launchpads conducting noncompliant token sales without interest in protecting token stability or discouraging short-term profit-driven behavior. This result is many unaccredited investors buying the token and dumping it immediately, hurting long-term investors, the project team, and, ultimately, the Defi industry.
Solution: We utilized vesting schedules and stability mechanisms. Our smart contract vesting schedules dictate the release of assets over a specific period or under certain conditions. IPD PAD facilitates the launch of new tokens on vesting schedules because:
- 1.Long-Term Alignment: Vesting schedules ensure that early participants, including the project team, advisors, and initial investors, remain committed to the project's success over the long term. It discourages short-term, profit-driven behavior.
- 2.Reduction in Market Dumping: When tokens are unlocked all at once, there's a high risk that recipients will sell or "dump" a significant amount of these tokens on the market, causing a sharp decline in project confidence and the token's price. Vesting schedules mitigate this risk by distributing tokens gradually.
- 3.Incentive for Continuous Development: If the project team's tokens are vested, it ensures that they have an incentive to continue working on the project. If the team were to abandon the project or underperform, the token's value might decrease, and their vested rewards would be worth less.
- 4.Building Trust with the Community: Knowing that a project's team and early backers are vested can build trust among the broader investment community. It indicates a level of confidence in the project's long-term vision.
- 5.Regulatory Prudence: In some jurisdictions, having a vesting schedule can be seen as a measure to ensure that a token sale is more aligned with genuine utility and long-term project growth rather than a speculative investment. This can help present a stronger case that the token isn't a security.
- 6.Stability in Tokenomics: A predictable release of tokens into the market can contribute to more stable tokenomics, reducing extreme volatility that can harm the project's ecosystem.
- 7.Rewarding Long-Term Supporters: Later stages of vesting can often have more generous allocations or bonuses, which can be an added perk for those who support the project in its early stages and remain committed.
In summary, vesting schedules can balance the interests of early participants with the health and stability of the token's ecosystem. They can also reassure potential new participants or investors that the project's initial stakeholders are committed to its long-term success.