SOY Finance - Initial DEX Offering

By SOY Finance 🌱 | SOY Finance | 2 Nov 2021


 

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Introduction - Why an IDO?

In this document, we describe the process that will be followed during the SOY Initial Dex Offering (IDO). The process is designed to fulfill the demands of both small and large investors, maximizing the involved participants’ trust.

The initial DEX offering will open on Wednesday 03/11/21 at 10:00 and close on 02/06/22 at 23:59 or earlier in case all the SOY tokens have been sold. The maximum number of SOY tokens for sale is 90 million.

As stated in the monetary policy vision, the received funds will be reclaimed by the insurance department to develop an innovative distributed insurance platform that will operate within the SOY finance system, offering insurance and security services on top of the SOY DeFi services.

The funds will be used for further improvement of the ERC 223 standard. We strongly believe that we will set new security standards through this approach to improve security across the DeFi industry. Specifically, the innovative decentralized insurance mechanism aims to bring new safety standards in the DeFi ecosystem by being the first platform that insures the deposited users’ funds in case of a possible loss due to software error. Through this initiative, we aim to change the way DeFi projects operate and encourage more projects to follow our path, offering distributed insurance and auditing services towards minimizing the possible users’ loss.

The raised funds from the IDO will be used based on the following priorities:

  1. Create a pool of funds to ensure that users’ losses will be covered from the insurance pool in case of a software error.
  2. The development of a decentralized insurance system that will further increase the intrinsic value of the SOY token will bring additional benefits to users of SOY Finance, increasing the whole platform’s safety.
  3. The ERC 223 standard improvement and promoting it to other DeFi projects.
  4. To increase the number of security auditors.

The received funds will be allocated as described in Figure 1.

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SOY Finance Initial DEX Offering

To ensure a fair distribution of the tokens and to increase the platform’s decentralization, the SOY IDO will be performed in rounds of different duration (daily and weekly auctions). Daily and weekly auctions will be held for the first six months, while at the end of this period, a final round will be held with a total of 30 million tokens for sale at a fixed price. So, the total duration of the whole IDO process will be seven months. The amount of tokens that will be distributed with this process is equal to 60 million SOY.

Different amounts of tokens will be available for sale in both types of auctions, with smaller amounts available for the daily auctions and larger amounts for the weekly auctions. Specifically, 36 million tokens will be available for sale in the daily auctions. In comparison, the remaining 24 million will be distributed through the weekly auctions (960000 SOY tokens per week). Also, the number of tokens for sale will increase with time.

Locking Period Duration

A part of the sold tokens will be locked for a different period depending on the auction type.

  • Daily auctions: 50% of the tokens acquired in the daily auctions will be available to the bidders at the end of the auction round, while the remaining 50% will be locked for 12 months.
  • Weekly auctions: 30% of the tokens will be available to bidders at the end of the auction, while the remaining 70% will be locked for 12 months (Table 02).

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Auction Process

The initial amount of SOY tokens for sale in the daily auction will be 30.000 SOY. For the following rounds, the total amount for sale will increase following a geometric series with a standard ratio of r=1.72336 and will vary from 30000 tokens on the first day to 641000 on the last day of the whole process.

For the weekly auctions, 960000 SOY tokens will be available for sale each time.

The auction process will consider a minimum bid price and a maximum bid price. These limits will be used to avoid any extreme cases and price manipulation. Hence, the SOY tokens cannot be sold at a price lower than the minimum price or higher than the maximum price. The exact price in the close interval defined before the limits mentioned above will be determined by the total amount offered by the bidders based on the following formula:

Total_deposits_by_bidders/ SOY_tokens_for_sale.

When the auction ends, the tokens will be distributed to the investors proportionally to their deposited funds.

When the offer is high, and the deposited funds match the maximum price defined by the price limits, the auction process stops, and the tokens are distributed to the smart contract depositors.

Suppose that the required minimum price is not reached at the close of the period (funds deposited < min required), then the end of the round will be delayed by one more period (day/week). In that case, a deadlock may occur, and the minimum price constraint will never be met.

Suppose the minimum price is not met for three consecutive rounds; In that case, the auction process will be canceled, and the deposits will be returned to the bidders.

The price definition of the bottom and upper limits will be performed based on the price of the SOY token in the previous auction round. The minimum price will be set 10% lower, while the maximum price will be set 160% higher for the daily auctions and 500% higher for the weekly auctions with respect to the SOY auction price at the previous round.

If at the end of the aforementioned seven-month process, SOY tokens will remain unsold, they will be burned, resulting in decreasing the maximum token supply.

 

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