FAQs about the raiseToken

FAQs about the raiseToken.

Why does Polygen have raiseTokens?

For one simple reason — with raiseTokens , Polygen can offer much more to the community!

For example, projects can offer more than one token to be claimed, or they can provide different types of assets (e.g., NFTs). No other launchpad offers this! It is Polygen's permissionless flexibility that makes us the future of launchpads.

The raiseToken creates many new opportunities between the raise and the distribution of project tokens. This motivates us to keep creating new flexible tools to utilize in that period. Making the raiseToken an essential part of the community seeding process.

How does raiseToken enable seeding and why not just sell the project token?

Polygen allows anyone to post a raise and provide the initial USDC to “seed” the raise.

How does the raiseToken protect investors on Polygen?

Polygen's Seed Token protects investors from a "Bring Your Own" (BYO) token policy. Through a BYO token policy, investors who provide the initial liquidity in the seed round are at risk of being scammed by the raiser.

Why? Let's say a raise creator puts 1% of their BYO token into the seed round, asking for a $1MM seed. Then as the project proceeds into the raise round, they sell the remaining 99% of the token into the raise after it starts. This will result in draining most of the USDC from the seed round in the process. The raise would then ultimately fail and auto-trigger Polygen's refund function. However, there would be little to no USDC left in the pool in this case, so the refund would not be possible. Meaning the creator of the BYO token would have effectively stolen funds from the seeders.

Using the raiseToken, even if the raise fails to hit the target, there will always be enough USDC in the pool to cover the seed costs. Seed funds are a critical part of Polygen FLO's — and because the seeder doesn't benefit from the raise in any way (other than the optional seed fee paid for a successful raise), we need to keep them safe.

What is the raiseToken worth?

raiseTokens are in relation to its claim power (the % share the investor holds concerning all other raiseTokens) on all future rewards the project behind the raise is offering. The raiseToken is NOT worth the value of the money raised. The raiseToken is frozen, cannot be transferred or traded, and has no price. The money raised is now owned by the project, who must now do something to provide investors with future value, be that a token, NFT, or the project's next big thing!

Projects must be very clear about what future value they aim to provide.

Just like traditional platforms such as KickStarter, GoFundMe, IndieGoGo, etc., the raise should be specific.

Investors GIVE money to the project, and the project CREATES something for the investors to want in the future. If the investors look at it objectively, the raiseToken's value is not about what investors have put in, but the value they expect to get from it.