In this post, we are going to use the version of the Launchpad that already works on the Goerli testnet (and that we will publish on Polygon in a few days) to explain, with a real and first-hand example, how to make your first investment in an IDO decentralized and get tokens from your favourite project.
1. What is a decentralized launchpad?
99% of the Launchpads on the market are launched by Exchange-type companies. There is nothing negative about it, but in the end, it is the company that controls the variables that affect each investment operation. In the case of the Tutellus Launchpad, the company neither punctures nor cuts, that is, we have no possibility of deciding anything beyond the IDO list and the terms agreed with the company (amount to invest, design of tokenomics, etc). It is the smart contracts of the Launchpad that define everything that is going to happen.
Therefore, the scalability both in receiving investors and in financed projects is not limited to the Tutellus community: any user in the world who passes a KYC can invest in the IDO they want.
2. Why do we include a KYC if it is a decentralized Launchpad?
Good question. Although it is something that the most crypto and libertarians do not like, the reality is that we live in a world where there are laws and obligations to comply with, and behind smart contracts there are developers and companies with names and surnames. We know that MiCA is just around the corner and, since the projects that we are going to finance have nothing to hide and we do not want "grey" investors, we have taken a step forward and the only condition that any investor must meet is to have passed a KYC. In addition, this greatly helps invested companies from a financial perspective when accounting for the investment received.
3. Concepts to be clear about before starting
When you first approach the Tutellus Launchpad it can seem complex, so let's understand the different variables to eliminate those initial fears;
A faction is a "clan" you must join to participate in an IDO. You have 3 factions, represented by 3 characters. Join the one you prefer. Each faction comprises 2 contracts: one for staking (where you deposit TUT) and another for farming (where you deposit the TUT liquidity token, which is TUT+WBTC). You must be part of the faction and use 1 or 2 contracts, as you wish. In the image above and at that time the most interesting was the Vuterins (since it has the highest APR). Still, the profitability changes constantly depending on how complete the different contracts are. Pure game theory.
To join the faction you must deposit TUT either in staking (the loose token) or in farming (the liquidity token). The more tokens you put in and the longer you deposit them, the more energy you will get (we see it in the next point). Keep in mind that the profitability and energy you get in the farming contract are always much higher than in the staking contract since from the protocol we encourage more pure liquidity over the simple blocking of tokens.
Energy is the metric that marks the winning faction at the end of each IDO. The faction that accumulates the most energy (through the sum of the energy of each wallet) will take an additional 15% of tokens, subtracting them from those of the other factions.
The energy, in turn, depends on 2 factors: the time you have been in the faction and the amount you have deposited in the staking and farming contracts. The more time and the more it matters, the more energy you generate. You can change factions without any problem, but it is unknown which faction will win until the close of the IDO.
In the previous image, you will see that I am in the "Vuterins" faction. Specifically, I am in the farming contract; I have some money deposited and have already accumulated some energy. I know the energy that I accumulate as a user, but I don't know the energy that others have. I know the global energy ranking, but I don't know before the closure of a certain IDO which faction would turn out to be the one with the most energy.
Finally, we move the energy into a token called eTUT. If you change factions you keep the energy, but if you unlock your liquidity (by staking or farming), you lose it. We are talking about losing energy (eTUT), not your TUTs. With this we encourage users to permanently leave liquidity in contracts, accumulate energy and have more options to win in future IDOs.
If I wanted to modify my faction (either add/withdraw liquidity or migrate faction) I would click on the button in the first image and decide what to do, in a very intuitive way:
As you can see, the concept of factions aims to gamify the investment experience, making it competitive among users and, of course, with prizes for the winners (that 15% additional investment subtracted from other factions).
4. Entering an IDO.
In the current example (I insist, I am interacting against contracts in the test network, these IDOs were already closed 1-2 years ago) I have an IDO already finished (FITtoken). I could participate in 2 others (Reental and BullRun). If we look at the results of FITtoken we will see that the Nakamotos have won, since they are the ones that have accumulated the most energy: note that they are not the ones that have funded the most money ($12,000 vs $360,000 in Vuterins), but they do represent the faction that has the most energy. This may be due to the fact that the money received in the Vuterins (myself, continuing with this example) entered very late in the IDO, so it has not accumulated enough energy.
5. Anchoring an IDO
The first thing I have to do to participate in an IDO is to fulfil a series of steps before anchoring:
- Pass the KYC (logically, only 1 time; then I will be able to enter as many IDOs as I want).
- Join a faction (I have already done it, I am in Nakamotos).
- Be Venture or SuperVenture (i.e. have a minimum of 1,000 TUT in my portfolio). The difference between the two is that the token allocations to the SuperVenture do not go by lottery, but are secured (in a % decided in the Whitepaper and published in the IDO details).
- Accept the terms and conditions of the IDO.
- Prefund (i.e. fund the IDO with USDT to get the famous tokens).
If we look precisely at my position in the IDO I have information about the money I have funded (in USDT). Until the IDO is closed I can always add/withdraw funds. Again, the more funds I deposit the more tokens I will be eligible for:
In this example, I have deposited $350k and could continue to add funds, up to the limit available in my wallet.
We must not confuse the PREFUND (money that I want to invest in an IDO) with the money that I have deposited in my faction to accumulate energy: the REFUND will be destined to get tokens, while the funds that I have in the faction are constantly mining. Its objective is to help me accumulate energy. Of course, both the staking and farming contracts also give me an incentive return (APR) for having deposited the funds.
What interests me more, depositing more money in the PREFUND or more tokens in the factions?
Depends. Keep in mind that the main factor that determines how many tokens you will receive (about the total number of tokens to be "allocated") is energy. Adding funds to your faction (in staking or farming) and having them locked up longer will help you get more energy, so you can get more tokens if your faction wins. What's more: the protocol highly rewards the time you've been accumulating energy in your faction, so that a user with less PREFUND than another can generate more energy (and get more tokens) if they spend more time (and have more volume of tokens) in the faction But again, it's all game theory and the rules are set by market dynamics.
6. Closure of IDO and allocation of tokens.
Once the IDO has been closed, the smart contract assigns me several tokens based on energy, factions and other token holders. Depending on the IDO tokenomics, I can claim these tokens. In the example above I have a vesting period and until a particular block I won't be able to start claiming them, but I already have them assigned to my wallet:
Once again, the game theory will determine how many tokens I am entitled to, and I will automatically receive the remaining PREFUND, called REFUND, back into my wallet. In the "Vesting" section I will be able to follow how the allocation of all my tokens is going, being able to claim them as soon as the smart contract allows it.
The Tutellus Launchpad is going to rock it. We have incorporated complex mechanisms (from the backend) that allow the user (in a very simple way) to "play" with certain variables to get energy and, in turn, get more tokens from their favourite projects. The ecosystem, being decentralized, self-regulates itself, resulting in a final balance between factions, energy, users and tokens.
Behind all this gamification there is a common goal: that the TUT captures value. Both because of the need to buy it to participate (and the more you have, the more "allocation" you will have assigned) and because of the need to stake it in faction contracts to get energy. A very bright future awaits the Launchpad, invested projects and token holders.
More info in https://www.tutellus.io/launchpad/