How it works

An explanation of how utility token launches work on Coinecta

Coinecta introduces a fair and inclusive way to participate in token launches through our pro-rata sales mechanism. This approach ensures that all participants have a chance to contribute to their desired projects, even in highly competitive sales. Here's how it works:

Understanding Pro-Rata Sales

In a pro-rata sale, there is a predefined maximum contribution cap for the entire sale. If the total contributions exceed this cap, excess contributions are refunded on a pro-rata basis. This means your final allocation might be less than your initial contribution if the sale is oversubscribed, and the excess funds will be refunded accordingly. See Appendix 1 for more details.

CNCT Staker Advantages

Typically, between 50% and 80% of the token sale allocation is reserved exclusively for CNCT token stakers. This reserved allocation is a way to reward our community members who support the platform by staking their CNCT tokens. What this means is that in the event of an oversubscribed sale, CNCT stakers will be guaranteed a reserved allocation that will not be subject to the pro-rata calculation. The amount reserved for each staker is based on the ratio of their pool weight to the pool weights of all contributors to this sale who are staking CNCT as well.

Note: due to the fact that the overall pool weight is determined dynamically, we can't predict exactly how much reserved allocation each staker will be eligible for. The team is working on a dynamic pool-weight calculator that should help provide some idea as the sale progresses, to help you plan your contribution better.

Step by step guide

Step 1: Preparation

Prior to the sale, detailed information about the token, including the sale date, maximum contribution cap, and specifics about the reserved allocation for CNCT stakers, will be announced. Keep an eye on Coinecta’s official channels for the latest updates.

Step 2: Staking for Reserved Allocation

To participate in the reserved allocation, stake your CNCT tokens before the sale begins. The snapshot of stakers, determining eligibility for the reserved allocation, is taken at the conclusion of the sale. Ensure your tokens are staked well in advance to be included in this snapshot. Make sure that all your CNCT Stake NFTs are in the wallet you contribute from. Please be mindful and double check, since this wallet could differ from your login wallet.

Step 3: Making Your Contribution

Once the sale goes live, contribute using the designated form on the Coinecta platform. Both the public and CNCT stakers can contribute without a preset maximum limit. This approach allows for greater flexibility but also introduces the possibility of oversubscription, which is addressed through our pro-rata refund mechanism.

Step 4: Post-Sale Allocation and Refund Process

After the sale ends, Coinecta will perform a pro-rata calculation if the total contributions exceed the maximum cap. This calculation determines your final allocation and the amount to be refunded. Refunds are processed automatically, returning any excess funds to contributors.

Step 5: Token & Refund Distribution

First, the team behind the project will create an LP pool on at least one DEX (Decentralized Exchange) on the Cardano blockchain. Then, allocated tokens will be distributed shortly after. Participants will either receive tokens directly to their wallets, along with any refunds due from oversubscription, or be given instructions on how to claim them from the Coinecta Dashboard.