The bid for a $1.2 billion valuation by Blockchain project Polkadot has hit a snag.
Since January, the Web3 Foundation, The Switzerland-based non-profit behind the project called Web3, since January has been making huge efforts to raise up to $60 million through a private token sale.
According to a reliable information, $15 million will soon be invested in the project’s DOT tokens by three Chinese funds.
These three investors however, agreed to pay prices which on average has put the value of the project below $1 billion, the sources said. This has fallen short of the unicorn threshold Polkadot was reportedly seeking. The agreed prices may vary from investor to investor.
A source said Polkadot has been able to sell only 70 percent of the intended 500,000 DOT as it’s not yet clear on how many tokens bought by Chinese funds and how many of their investors participated.
Polkadot will continue to try selling the remaining tokens to accredited investors and distributing them to community contributors freely, instead of closing the private round now.
It will be better to raise the full $60 million by increasing the allocation of tokens for sale, because assuming other investors participate at similar valuations to three funds, still selling the remaining 30% wouldn’t get to the expected target proceeds.
Web3 said it could not comment on any private sale, in a statement made by it “but information will be made public as soon as possible.”
Information from sources said, “Proceeds from the sale will be used for testing Polkadot’s mainnet, incentivizing developers and funding Web3 Foundation’s research and operations.”
Chain of chains
Aside all these, Polkadot happens to be is one of the most anticipated blockchains that are yet to launch.
Polkadot is aimed at building a blockchain network that can enable other blockchains to work in conjunction with each other. Polkadot is a rival network with a similar goal of interoperability, created by Gavin Wood, who is the co- founder of Ethereum as well as founder of Parity Technologies.
Cosmos, was also launched in March.
Parity CEO Jutta Steiner in a separate statement, said the firm is “excited about the new possibilities Polkadot brings to the table,” adding that Polkadot has progressed as expected as the true interoperability delivered in a scalable, governable protocol has a good potential to push the dream of an open internet forward.
Though Steiner’s statement did not address the ongoing sales of token .
With Blockstack setting out to raise $50 million in a regulated offering,and other startupsraising smaller amounts, for sure, the markets urge for such sales has moved up recently.
$145 million gotten through a public sale of half of the total 10 million supply of DOT in October 2017 , at the value of the tokens around $30 a piece by Web3 Foundation. once it is launched, it will be swapped once on the new blockchain, though presently, tokens run on top of Ethereum. Almost 37 people are employed and it continues to hire as it promises to deliver potentially lucrative technology for cross-blockchain transfers.
The foundation still plans to do another Public distribution of tokens during or at the time of the Polkadot blockchain launch will also be made by the Foundation, from its statement; “We want DOT tokens to make it into the hands of those that will actively participate in helping to build out the Polkadot network, this is our goal.”
With regards to Polkadot’s white paper, 30 percent of the total token supply was reserved for Web3 Foundation was given 30%of the total token supply on reservation, while the remaining 20 percent was to be distributed before the mainnet launch at a date of yet to be decided. Web3 has left 15% of it over all supply, spending half of its allocation, according to a source familiar with the situation.
5% of the total supply was allocated for the latest fundraise. The $60 million initially sought from the sale implies a target price per DOT of $100 to $120. Polkadot discourages trading them and for that reason, tokens are not listed on any major exchange platforms.
Contributors to the project are just contracted to participate in governance after the launch and are mandated to hold the tokens for at least a year, while investors can liquidate immediately.
When asked about OTC trades, The Web3 director Ryan Zurrer when asked about the OTC trades has this to say, “They are very risky, so we don’t authorize them.”
Some members of the ethereum community are critical of Polkadot’s similarity to permissioned blockchains, considering how council votes will later govern the network when it launches and It’s not clear who will be on that council with rotating seats.
The former employee summed up the concerns of the potential participants by saying: “ Basically it’s a permissioned blockchain that will be run by Gavin, Ryan and their friends.”
Credits: Leigh CuenJOIN OUR COMMUNITY