📮Proportional Allocation Mechanism (PAM)

How does KoiPond work?

How does it work?

KoiPond uses a Proportional Allocation Mechanism, which helps reduce botting attacks and whale monopolies of launch tokens.

Using our Proportional Allocation Mechanism, participants are able to commit and use dKOI to purchase new BRC20 launchpad tokens. The BRC20 tokens are then sold and allocated proportionally to how much KOI is committed per person.

The PAM allows for the oversubscription of the raise. In such cases, any surplus dKOI tokens are swiftly returned, paving the way for users to claim their earned token allocations, coupled with any remaining dKOI tokens.

Example

Let's consider a new BRC20 token called "BATS" that aims to sell 100,000 tokens for a total of $500,000. These tokens are offered for sale on KoiPond.

Assuming that KoiPond's wrapped token, dKOI, is valued at $1 each, then only 500,000 dKOI can be sold for BATS.

Users can commit as much dKOI as they wish, with no predefined limit. However, if the total committed dKOI exceeds the value of 500,000 dKOI, the fundraising becomes 'oversubscribed.' In such a scenario, the BATS tokens will be distributed proportionally among all the stakers.

For instance, if users collectively commit 2,500,000 dKOI, the oversubscription ratio would be 5x (2,500,000 KOI / 500,000 KOI).

At the conclusion of the auction, the dKOI that users committed is utilized to purchase BATS tokens. However, in this scenario only 20% of the dKOI will be utilized. The other 80% of committed dKOI will be returned to users.

When the public sale has ended, each person can claim their proportional BATS tokens and receive any remaining dKOI returned.