Appendix 1: Pro-rata refund calculation

In Coinecta's token sales, we employ a pro-rata distribution mechanism to ensure fairness and inclusivity. This section clarifies how contributions are calculated and allocated, particularly for CNCT stakers, whose allocations are determined by their staking pool weight.

Note: We willl use an example scenario for clarity throughout this appendix, but please be aware that these numbers will change from sale to sale, including the 80% value reserved in this example.

Example Data:

  • Total tokens available in sale: 100,000 tokens.

  • Total tokens sold (including overcontributions): 200,000 tokens.

  • Reserved allocation for CNCT stakers: 80% of the total available tokens (80,000 tokens).

Staking Pool Weight and Allocation

CNCT stakers have a "pool weight" based on the amount of CNCT they stake derived from their staking tiers. The pool weight is a measure of their share in the total staked CNCT. The higher a user's pool weight, the larger the share of the reserved allocation they are eligible for. The pool weight is calulated by taking the total weight of all contributers and dividing each individuals by that.

Individual's pool weight / total pool weight of participants

At the end of the token sale, we snapshot the total pool weight and calculate each staker's share of the reserved allocation (In this example, 80% of the total tokens) based on their individual pool weight relative to the total.

Detailed Calculation Example:

  • Assume the total pool weight of all stakers is 1,000.

  • A staker with a pool weight of 100 would have 100 / 1,000 = 10% share of the staker pool.

  • With 80% of 100,000 tokens reserved for stakers (80,000 tokens), this staker's reserved share would be 10% of 80,000 tokens = 8,000 tokens.

Refund Mechanism

  • If the staker contributed an amount resulting in more than their allocated share, the excess is subject to the pro-rata refund calculation.

  • For instance, if the staker contributed enough to receive 10,000 tokens but is only allocated 8,000 tokens based on their pool weight, the remaining 2,000 tokens worth of their contribution would be part of the pro-rata refund process.

Pro-Rata Refund Process

  • The refund process is initiated when contributions exceed the total tokens available for sale.

  • Using the example above, 200,000 tokens worth of contributions for a sale capped at 100,000 tokens means 100,000 tokens worth of contributions need to be refunded.

  • Each contributor's excess contribution is refunded on a pro-rata basis, ensuring that participants receive a fair refund amount corresponding to the oversubscription rate.

Refund calculation example

Our previous staker had 8k tokens as part of their reserved allocation and 2k as part of the refund process.

The calculation begins as follows:

  • Public sale allocation = 100k - 80k = 20k

  • Total public contributions = 120k

  • Oversubscribed amount = 120k - 20k = 100k

Now the specific user who's 2k is part of the refund calculation:

  • Public allocation ratio = 2k / 120k = 1/60

  • Public allocation amount = 1/60 * 20k = 333.33

So their total refund:

Refund = Total contribution - (Reserved allocation + Public allocation) = 10k - (8k + 333.33) = 10k - 8333.33 = 1666.67


Hopefully this clears things up. We believe this method ensures a balanced and equitable distribution of tokens, especially favoring the community members who actively support the platform through staking. It rewards long-term supporters with a greater chance of obtaining a larger share of the token sale, while still allowing for broader public participation.

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