A groundbreaking new fair launch mechanism has been revealed by the DeversiFi trading platform – a leading company pushing the frontier of layer 2 innovation.
DeversiFi CFO Ross Middleton told Coin Rivet that the company had been inspired by the events of ‘DeFi summer’ which saw a host of community token offerings launch via various on-chain mechanisms.
“But although the good intent was there, each mechanism seemed to have its own problems,” he said.
DeversiFi Launch Market (DLM) is the first fair launch solution developed on layer 2 and will be debuted through the upcoming launch of DeversiFi’s new DVF token on July 8.
The project’s CEO – Will Harborne – said the ‘fair’ system means gas prices won’t have an impact on excluding community members from being involved.
“We’ve built the DLM mechanism because we believe Decentralised Finance (DeFi) and token distributions should be available to everyone in the fairest way,” he explained.
“Previous initial token distribution mechanisms on Layer 1 are constrained by gas prices and front-running, favouring those that react fastest.
“All these factors cut out potential community members who don’t have big pockets from participating and lead to a smaller community following the distribution”
Layer 2 innovations are much needed blockchain solutions aimed at creating secondary frameworks on top of existing blockchain systems in order to solve issues of transaction speed and scalability.
DeversiFi have identified token launch mechanisms as a fundamental issue plagued by high gas fees, trading bots, and extremely volatile price action.
DLM is aimed at ensuring maximum inclusion in token launches by determining the market value of a token before it starts trading. This is done through a Dutch auction and LBP (reverse-auction mechanism) that penalises fastest-finger-first action such as trading bots with higher prices.
The DLM is powered by technology from StarkWare, the developers of the STARK zero-knowledge proof system. This marks a significant commercial success for StarkWare which launched following a $30m funding round in 2018.
Two million DVF tokens will be made available by DeversiFi during a public distribution event on July 8 using the new DLM feature.
Additionally, a full governance module will roll out in July, empowering holders of DVF to stake their tokens to receive xDVF tokens.
This will give them the right to ‘on key’ governance decisions while earning a potential share of platform fees, putting supporters of DVF in a future-shaping position as they will be able to make adjustments and major changes to the protocol.
Speaking on the future of token launches, Middleton said “if DVF – the first token to launch using a DLM – is successful then we hope to see many more projects launching tokens using a DLM”.
Formerly known as ETHFinex, DeversiFi raised $5 million in a recent funding round and with a suite of innovative products currently in the pipeline, like AMM pools and liquidity mining, set to launch next month the company seems set on becoming a player on the frontier of Phase 2 adoption.
Middleton added that DeversiFi were “constantly looking for ways to help Ethereum scale and have a really exciting roadmap over the next year to bring all the benefits of Layer 2 DeFi to the masses”. He also said the company will be launching bridges to other blockchains soon.
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