Introduction
The official documentation for Gonear, a pioneering decentralized fundraising & NFT platform on Near's Aurora EVM.
Background
The first ever Initial Decentralized Exchange Offering (IDO) of Raven Protocol took place on Binance DEX on June 17th 2019. At the time, decentralized exchanges, or DEXs, had yet to gain much traction in the market. With the explosion of DeFi in 2020, DEXs increased in popularity, and IDOs became an inexpensive way to get around the centralized initial exchange offering model.
Some would purchase the entire pool in one swoop, causing the crypto asset to soar in price as others attempted to do the same. The term “ape in” to a liquidity pool was born to describe those who turned up the gas on their MetaMask wallet to buy out entire pools of newly-created tokens at lower prices before others did the same.
The above in turn produced wild volatility and left many investors shell-shocked, additionally, this approach suffers from other significant downsides, most notably;
Projects need to provide liquidity on both the asset for sale (base currency) and a quote currency (usually ETH) for it to initially trade against.
Automated market makers, such as the one powering Uniswap, would dynamically adjust the asset’s price based on supply and demand.
Increasing popularity and usage of platforms such as Uniswap reinforced scalability issues, with Ethereum network fees skyrocketing and slow platform performance, leaving end-users frustrated.
Users are increasingly demanding;
Cheap transactions
Secure, ultra-fast swaps
User-friendly design
The killer features of Gonear is the possibility of making fixed swap pools, powered by the Near & Aurora ecosystem, which can provide higher throughput for faster and cheaper transactions while staying connected to the ERC20 Standard.
Understanding Gonear pools
Following Due Diligence by The Council, Gonear will allow projects to list at a fixed price, which will be maintained for as long as there are tokens remaining in the original supply. This should ensure less volatility around a token launch.
It also allows a project and its investors increased transparency over the amount of money raised and tokens sold. This data is not as easily calculable when the tokens sold varies greatly with price volatility.
Current challenges
Gonear pools solve three main challenges:
Lack of control mechanisms: Unfair token distribution and liquidity rug pulls
Prevent token dumps by private investors
Reduce token offering costs
As we can see, each time we swap with the liquidity pool, the rate changes. As projects try to launch their token via AMM liquidity pools, a popular token’s price can rapidly increase when plenty of investors buy it. This price increase is caused by the bonding curve model that liquidity pools implement.
For that reason, a fixed swap pool sets a fixed price for token swaps. Projects who want to use the Initial DEX Offering (IDO) model know precisely how much money they’ve raised and how many tokens they’ve sold. They know that their fresh community of token holders has paid a fair price. Conversely, the new token holders can be confident that the value they have contributed will go directly to the development of the project.
Furthermore, projects that pursue the IDO model with fixed swap pools can set additional parameters to gain more control over their fundraising, like controlling the maximum investment per user or the number of investors allowed in the pool. Soft caps and hard caps can be hard coded into the smart contract. Many elements can be crafted to make sure that the new set of token holders is taken care of as equitably and transparently as possible.
Gonear pool benefits
Amount raised + quantity of tokens sold is known
By ensuring a fixed exchange rate, investors as well know exactly how much they are paying for and how much they are getting. That allows smart investors to accurately calculate their cost basis in order to make better informed investment decisions in the future. This is completely different to the IDO model where the amount of tokens sold varies greatly alongside price volatility.
Wide distribution of token holders
Having a large number of token holders, distributed geographically and demographically, is a key advantage to have as a token project. Many centralised exchanges will look at the amount and location of token holders as key indicators of whether or not to list a project. Our pools can help to ensure that more investors are able to get in on an investment opportunity.
Fair price
At Gonear, we firmly believe that funds raised belong to the project. Alternatively, interested token holders should be given every opportunity to acquire tokens they desire at a reasonable price without having to “ape” into them.
That’s why at Gonear we first began creating pools tailored for the Near Protocol blockchain. Our pools provide a more fair token distribution mechanism while still remaining decentralized. Putting them on a next-generation interoperable blockchain like Aurora means that the transaction fees for performing decentralized swaps is much more efficient for the user.
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