When a DeFi launchpad properly structures a token launch, there exists a chance for a community to invest together in an idea that is valuable for its ecosystem. If you are not already an accredited private investor (which most of us aren’t) it is a rare and desirable opportunity.
Unfortunately, it’s more common to see overly centralized launchpads that design unfair systems. Some launchpads perform IDOs for any project that pays an upfront fee, regardless of its fundamental value. Others design tokenomics that favor venture capitalists at the risk of the public.
I had the opportunity to interview the team at Carbonstarter, a developmental launchpad project on Arbitrum. After considering their surprisingly transparent responses to my somewhat abrasive questionnaire, I have concluded that Carbonstarter is capable of building a launchpad completely controlled and moderated by its own decentralized community.
Without a centralized authority, the launchpad can’t operate without users that regularly participate in the DAO governance system. But if enough progressive minds come together to form the Carbonstarter community, this launchpad will continually provide fair investment opportunities for projects that bring value to the entire Artbitrum ecosystem.
Carbonstarter’s Fair IDO (FIDO) System
Carbonstarter is composed of two vertical products - launchpad and DEX. Both are designed with features that incorporate community governance into core functionality.
When a project applies for a launch, its application becomes an onchain proposal submitted to the DAO governance voting area. Users with a stake in the Carbonstarter governance token are eligible to vote on each proposal. Some projects will over incentives that entice voters to spend their limited governance tokens.
Projects that reach a certain threshold of votes move on to the Pooling phase, where users have the opportunity to invest directly in the project. Users who voted in favor of the proposal during the Voting phase are allowed to participate in Pooling first, followed by all other community members.
Carbon DEX: Flexible Solutions to Attract Initial Liquidity
Without venture funding, projects often struggle to find liquidity using a launchpad’s native DEX. The Carbon DEX provides flexible solutions for each project launch by using funds from the DAO Treasury (30M ARBS tokens, or 30% of total emissions).
Using Carbon DEX, newly-launched projects can comfortably commit their token’s initial liquidity, receiving in exchange liquidity provided by Carbonstarter, its partners, and most importantly the Carbonstarter DAO community. Strategic deployment of DAO Treasury funds immediately ensures healthy liquidity options, allowing for substantial liquidity rewards and deep project liquidity out of the gate.
Most importantly, the Carbon DEX provides an in-house trading platform for the Carbonstarter community. Users can trade natively within a system designed by themselves to benefit everyone involved.
In order to realize this monumental achievement of decentralization, the Carbonstarter team is literally giving 30% of the value of the project to the hands of its DAO users. Only through careful application of this generous allocation will the project market cap flourish. It will require most community members to apply fundamental understanding of the native Carbonstarter tokens: ARBS, veARBS and xARBS.
Carbonstarter ARBS Tokenomics
Complete tokenomics from the ARBS token is already publicly announced. In addition to the aforementioned DAO treasury, there will also be a large vested allocation for public IDO, a fund for staking rewards over time, community incentives for the ARBS airdrop program, initial liquidity, and a fund to reward important early project contributors.
Complete tokenomics and airdrop details are publicly available.
During my interview, the team graciously elucidated core functionality of ARBS and its derivative tokens.
All users have the option to stake the ARBS token for a specific lockup period. Staking ARBS immediately sends a certain ratio of veARBS back to the user: up to a 1:1 ratio of ARBS is staked for the maximum time frame.
veARBS is a scarce governance token used to Vote on proposals. veARBS depreciates a tiny percent every block: near the end of the lockup period, the user will have less veARBS than when they started their stake. This is a measure to prevent whales from manipulating DAO decisions with hoarded votes.
By having veARBS, the user also claims xARBS, which converts back to ARBS at a ratio up to 1:1. Users can choose to convert xARBS to ARBS earlier in the lockup in exchange for less ARBS, or hold until the end of the lockup for a full 1:1 ratio. This deflationary method of returning the tradeable value of voting power over time shares commonalities with the popular ETH LSD incentives. Read more about Liquid Staking Derivatives here.
The Risk of Decentralization
Of course, a decentralized launchpad structure does carry inherent risks compared to its centralized counterpart.
Using the native ARBS token to seed initial liquidity means that it is paramount for the community to prove its inherent value. The success of the early economy depends on users locking a decent portion of initial ARBS supply into the DAO governance system. If too many shortsighted users ignore governance utility and dump ARBS into a pool without substantial venture funding, it could be catastrophic for the health of the project.
In my research, I noticed confusing language that resembled a contradictory admission of a seed investment round. I asked the team directly to elaborate how it’s possible for a DAO and Angel Investors to simultaneously own a project. I was humbled by their candid, detailed response:
What I see is a system that initially grants disproportionate power to a small group of users with a lot of skin in the game, then gradually rebalances power toward decentralization. As more users lockup ARBS for governance, spend veARBS on Voting, deflate ARBS supply by exchanging xARBS, and diversify native liquidity pools, true ownership of the protocol will be diffused from the center throughout the network.
Community Growth Begins Now
This content is dense, and comprehension is not so simple. That is why it is crucial for members of the early Carbonstarter community to begin educating themselves and others immediately.
The Carbonstarter team is transparently dedicated to building a financial behemoth that can be wielded by its own community. In the short time that remains before Carbonstarter goes live, it is up to us to become a community worthy of its power.
Carbonstartner clearly understands the importance of mindful community growth: In addition to the 4M ARBS airdrop available to all community participants 10M ARBS tokens - that’s 10% of total supply - is allocated to incentivize outstanding early contributors. These tokens are reserved to reward individuals who make significant contributions to community growth, including community content production, marketing strategies, and open calls (time sensitive bounties for critical tasks like bug bounties and beta testing).
Rewarding community members that go out of their way to strengthen the entire community gives a higher share of initial voting power to users that are more likely to use it wisely. And even before TGE, it incentivizes cooperative behavior. Don’t believe me? I didn’t decide to write this article until I discovered the 10M ARBS Community Incentives fund…
Users that want to maximize their share of this project have to earn it by strengthening the community’s foundations. This cooperative incentive is an excellent strategy to create a community eager to put in the effort required to manage its own treasury. All that remains for us is to show up.
Begin your journey to Fair IDOs and a rich self-contained launchpad governed by its users today by joining Carbonstarter communities and keeping up to date with announcements.
The Discord and Telegram communities already have a reputation system that rewards active users. Soon there will be more social engineering tasks and incentive programs available for attentive users. Giveaways and partnerships are announced daily on Twitter and beyond.
The traditional financial system is characterized by centralized practices that allow selective insiders to profit immensely while outsiders cannot participate. Decentralized Finance introduces radical technology that allows anyone, anywhere to participate in building new financial paradigms.
Have you ever thought that you could create a better financial system than the one we were born into? Join Carbonstarter today and prove it. Let’s work together to build an investment platform we can all be proud of.
See you out there,
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