Why we invested in Impossible Finance

Introduction

Fundraising is an important part of crypto, driving lifeblood into projects and giving them the resources needed to survive and grow. It all started with the first Initial Coin Offering (ICO) — Mastercoin — which took place on the Bitcoin network. People were able to send bitcoins to receive Mastercoin tokens in return.

Sector Analysis — Launchpads

At least ~150 coins added per month on CoinGecko since the end of 2017
During the continued bull run of the first half of 2021, over 588 rounds were raised amounting to $9.9B. Source: DoveMetrics.
Virtuous cycle for a successful launchpad.

Current Problems

To understand the problems that current fundraising processes face today, we must first delve into its three main participants; retail users, institutional investors and projects.

5min chart for a public launch. White-listed listing price $0.03.
Public sale listing price of $0.05.

The Impossible Finance Vision

Impossible Finance is a multi-chain launchpad aiming to cover EVM compatible chains first, followed by other non-EVM chains. With a first-principle approach, they focus on building a business-to-developer (B2D) model that addresses issues inherent in legacy launch infrastructure while creating specialized, sector-specific investment tracks that direct allocation towards power users and away from speculators. In doing so, Impossible intends to provide an end-to-end solution to help projects raise once and build forever while allowing retail and institutional investors alike to participate fairly, creating sticky support to fundraising projects.

Team

Calvin Chu is a builder at Impossible Finance, Formerly of Binance Research he has valuable experience leading Binance Staking across 30 blockchains while supporting due diligence in projects applying for the Binance Launchpad. His insight and experience will help shape the launchpad into a prime candidate for consideration for projects and users alike seeking a more open fundraising option. Other members of the contributing team have backgrounds in payments, ride sharing, centralized exchanges and layer 1 blockchains to help scale the infrastructure to support project teams.

Key Advantages/Features

Not your average launchpad, Impossible Finance will build key features to help projects launch successfully, mitigate most of the friction that is involved in fundraising and address key issues that exist today.

  1. IDIA Pre-Allocation Queues — The more a user stakes in a sector, the higher the priority they get via “Right of First Refusal”. This incentivizes investors to become the leaders of a sector. Guardrails such as target “Gini coefficients” for sale participation and max limits (no investor can surpass 20% of the total track amount) can be added as constraints, rewarding all users staked within a sector prior to the announcement of the launchpad project, and offers the right to claim a launchpad allocation proportionate to the total amount staked in the sector. This mechanism ensures that a proper distribution can be allocated to the project’s most loyal and fervent investors as opposed to just a few participants taking up the entire allocation.
  2. IDIA Priority Auction — Similar to a combination of LBP and gas fees, IDIA per $ of allocation will follow the LBP curve during the auction window. Users submit bids of $(fixed rate) + IDIA (based on real time LBP curve) to get access into a particular deal. This assigns preference to users who signal interest by bidding with IDIA for allocation post-announcement. This mechanism ensures that front-running and jamming maximum allocation does not work (users will pay a substantial premium) as over time the LBP will adjust and trend downwards.
  1. Onchain whitelisting — (either by KYC powered by Synaps, Tor.us, Argent, other wallet integrations, DAO participants, Galaxy, POAP, Degenscore, or Rabbithole XP, etc.) to attract power users or verified crypto users.
  2. Retroactive Usage-based qualification — to offer limited sales to targeted addresses who have utilised certain onchain products
  3. Lucky draw — airdrops for IDIA holders (sector-agnostic) for allocations.
  4. Smart Drops — yield farming opportunities for liquidity providers and token holders of IDIA launch partners.

Governance

Impossible Finance Decentralized Autonomous Organization (IFDAO)

  • IF functions as the primary governance of the ecosystem, governing all things Impossible Finance (Details here).
  • IDIA functions as governance for the launchpad to tweak various parameters or proposals, and also govern the IDIADAO, a public on-chain fund to invest in Impossible projects. (Details here)

Risks

  1. Cyclical/Seasonal Demand — Fundraising in crypto has a cyclical trend, bull and bear markets. This has an impact both in terms of number of raises, and the valuations at which projects are able to raise. For a launchpad, this can pose a problem. During bull markets, there is a high volume of deal flow as teams organize quickly and seek to raise funds, creating pressure in the quality of project curations. During bear markets, there is a lack of demand to fund projects thus resulting in projects unable to raise target funds.
  2. Competition — Intense competition that Impossible Finance could face are chain specific launchpads that focus specifically on their ecosystem, as well as strategic funds and institutional investors. Being chain specific, these launchpads could be in a better position with stronger domain expertise to attract some types of projects and appeal to domain specific users.

Conclusion

We believe that Impossible will be a game changer in the fundraising space. As Impossible builds out its product suite and ecosystem, it will solve many of these key issues and become a strong competitor to existing launchpads. We look forward to Impossible’s growth and supporting both the project and it’s community in the future.

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Sino Global Capital

Sino Global Capital

A team of former consulting, Wall Street, private equity, government, and corporate veterans accelerating the blockchain revolution