🐋Anti-Whale Mechanism
Last updated
Last updated
On Colony, your staked CLY and the resulting ANT tokens don't correlate directly with your maximum USDC available allocation in a project's seed or private fundraise. If they did, the entire premise of "whale-resistance" would fall apart. Big wales would receive the largest allocations and the token distribution would definitely spiral toward centralization.
In line with our commitment to inclusivity, there are no minimums required for participation in Colony's Early-Stage program. Moreover, we've implemented an anti-whale mechanism tailored to each NEST to prevent sales from being monopolized by large holders, fostering a level playing field for both small and large investors. Furthermore, unlike other fundraising platforms, the on-chain nature of our anti-whale mechanism promotes transparency and trust, providing investors with a clear and fair investment process. This anti-whale mechanism is specific to each NEST, considering factors such as the raise target and other relevant parameters. Users can conveniently experience how this mechanism affects their potential USDC allocation on the application's front-end. When committing ANT tokens, users can view the corresponding USDC allocation they enable. It's important to note that while committing more ANT tokens increases the potential USDC allocation you can commit during the Analysis phase, the relationship is logarithmic rather than linear, reflecting the anti-whale mechanism's design.
The logarithmic behavior of the anti-whale mechanism is illustrated in the chart below:
Our Early-Stage Program is designed to withstand Sybil attacks, a common threat where malicious actors attempt to gain undue influence by creating multiple fake accounts. Participation in NESTs is exclusive to KYC-verified users, with each user limited to a single KYCed wallet. This measure safeguards against attempts by whales to exploit the anti-whale mechanism and ensures the integrity of our platform.
This approach serves multiple purposes:
Fair distribution: KYC helps eliminate the possibility of multiple accounts by the same users on our platform, guaranteeing a fair and equitable distribution of allocations among our community members. This measure is crucial to maintaining transparency and fairness in our fundraising processes.
Preventing manipulation: KYC acts as a barrier against automated bots and large-scale investors (whales), preventing them from dominating sales and ensuring a more democratic and inclusive fundraising experience for our community.
