Colony to hold Dutch-auction style token sale
Colony is holding its token sale starting the 14th December 2021. The platform has built a Dutch-auction style token sale so as to avoid any front-running, pumps and dumps, and other negative aspects that are common in conventional ICOs. This also opens up the sale to everyone who is interested in Colony’s project. Token buyers can participate anytime during the sales period that will likely last several days. The mandatory KYC registration stays open until the end of the sale. As for the Dutch-auction style, the token sale will start at a very high price and then drop to adjust according to the demand that is created by the buyers.
The token sale starts at 12:00 UTC on 14th December and will run until all 20 million CLNY tokens are sold. The CLNY tokens are sold through Coin Machine in a wrapped manner as wCLNY. By being wrapped, the token does not get transferred during the sale period. Once the Coin Machine sale is concluded, the wCLNY token is unwrapped and available for easy transfer.
What is Coin Machine?
Coin Machine is a token sale mechanism that intends to find a fair market price for a new token by selling it in limited amounts in fixed-price batches. It also adjusts the prices to go up or down depending on the demand of the buyers.
Although the token would not be available continuously with real-time price adjustments, Coin Machine has a fixed price with a fixed supply that helps to tackle price manipulation and volatility.
Coin Machine sets a target and a maximum number of tokens to sell per period along with a period length and a number of periods to use as a price averaging window. Then, Coin Machine sells up to the maximum number of tokens per period but adjusts the price based on the number of tokens.
The token sale process
The wCLNY token can be purchased using the xDai token in batch periods. Every batch period lasts for one hour and users will have to wait for the next batch to start if one batch sells out.
The average window size is 16 periods with a 250,000 wCLNY target per period. The moving average of the token price will be calculated using the 16-period window wherein, the higher the number the slower the price adjustment. If the 250,000 tokens are sold in the allotted time, then the price would increase in the next batch, whereas if it does not reach the target then it will decrease.
The maximum number of tokens that can be sold in a period is 500,000 wCLNY. Every user can purchase a maximum of 5% of the total 20 million tokens. The starting price of the token sale is 50 xDai (equal to $50).
Users who want to purchase the token do not need to hurry as the sale has been planned to be as safe and fair as possible. This helps to avoid any price manipulation and front-running while also giving the token time to discover a price that is appropriate according to the market. CLNY is sold in a minimum of 40 batches and the token will be in price discovery throughout the duration of the sale.
The token sale can be accessed here.
Colony provides an easy-to-use framework for DAOs. Users can create and run their own DAO in a simplified manner. It provides organizations everything they need to operate on-chain from payments, teams, authority to governance, fundraising, revenue sharing, and arbitration.
It packs more than 20 features such as a ‘lazy consensus’ mechanism and reputation-weighted voting. Colony is one of the first Ethereum-based projects that aim to be completely decentralized, trustless, and 100% open source.
For more information on Colony, please check out their official website.
Disclaimer: This is a paid post and should not be treated as news/advice.