- Polimec launches decentralized fundraising protocol for Polkadot.
- Requires Deloitte KYC Credential for compliance.
- Projects undergo community due diligence before funding.
The blockchain and decentralized finance (DeFi) sectors have grown rapidly in recent years. However, the sector has often run into issues with regulation and compliance, especially in the US. Since then, many projects have attempted to create a decentralized way to manage regulatory issues.
Most recently, Polimec has launched its decentralized funding protocol for projects within the Polkadot ecosystem. The platform aims to democratize access to early-stage funding while offering built-in compliance tools.
How Polimec Decentralized Funding Works
On Monday, May 20, Polimec officially launched its decentralized funding protocol. The protocol aims to be a transparent and compliant platform for funding projects in the Polkadot ecosystem. It has several innovative features that stress compliance and a community-driven approach.
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The platform works by enabling community members to assess submitted projects. Specifically, each submitted project must have minimum backing among the Polimec (PLMC) token holders.
Once projects pass the evaluation phase, they enter the funding round, where they can secure investments from users. These, however, must obtain the Deloitte KYC Credential to engage with the platform and ensure compliance. To maintain privacy, credentials are pseudonymous, meaning no personal information is stored on-chain.
This means that projects can review whether or not they can accept funding from particular investors. While Polimec does not assume responsibility for compliance, it offers a tool for managing compliance more effectively.
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After successful fundraising, projects issue tokens to investors. These tokens are distributed automatically and later converted to mainnet tokens upon the project’s launch.
Several Projects Already Launched on Polimec
Compliance is a key issue for crypto projects, especially in the United States. The United States Securities and Exchange Commission went after several high-profile projects over their token launches there. The agency has called these projects unregistered securities offerings, arguing that they put retail investors at risk. The lack of KYC procedures contributed to that issue, as projects could not distinguish between sophisticated and retail investors, a key distinction in securities regulation.
For that reason, Polimec has already attracted several projects within the Polkadot ecosystem. The first was Apillon, which provides infrastructure solutions for web3 developers. It aims to simplify the development process for decentralized applications (dApps), enabling faster and more efficient deployment.
Several other tokens have also launched on Polimec, including the Mandala Chain, which uses blockchain to track environmental initiatives and sustainability. Another project launched is Gotem, a decentralized social networking platform focusing on user privacy and data ownership.
On the Flipside
- While Polimec provides tools for regulatory compliance, projects must navigate regulations across different jurisdictions.
- Polimec’s use of KYC procedures means the platform relies on encryption to keep data safe. If this encryption were breached, users would find their data exposed.
Why This Matters
With regulations becoming a major roadblock for decentralized projects, compliance-friendly platforms can help crypto projects overcome that barrier. In the long run, more blockchain projects get funding, contributing to a more diverse blockchain ecosystem.
Read more about Polkadot’s growing ecosystem:
Polkadot Sees Record Growth in Users and Developers in Q4
Read more about a new trend in crypto:
Why Clicker Apps Like Notcoin Are Taking Off on Telegram
