During the month of May 2021 Gate.io Startup Projects raised nearly $1 billion in funding from Gate.io users. As interest in the platform grows to new highs, many have asked how exactly the platform works, here’s an explainer.
Introduction
Gate.io Startup is an initial exchange offering (IEO) platform that allows early stage blockchain projects to access funding from millions of Gate.io users. The platform was launched in 2019 and every single project listed on the platform has been oversubscribed to and thus raised much more funding than their initial target. After the fundraising stage is completed, projects are listed on the Gate.io exchange.
Startup Listing
Gate.io has a thorough vetting process to ensure projects listed on Startup are legitimate. As with regular listings on our exchange, we only list quality projects with long term potential. Once a project is approved, it is required to provide and publish key information such as the token name and symbol, maximum supply contract type and address, the token distribution, fundraising amount, price and number of tokens supplied for distribution on Startup. Projects interested in fundraising through Startup are invited to submit an application here.
Startup Fundraising
Once a project is approved and the listing announced, users are able to view the project on the Startup page where it will show the token description and more importantly the token’s fundraising goal, the amount of tokens offered through Startup and the initial price per token. The Startup listing period will also be shown and eligible users will be able to participate.
Oversubscription
An important aspect to remember is that the token supply offered through Startup does not change, even if the listing is oversubscribed to. If the project raises more than it’s goal, users receive the token in proportion to their investment in the total fundraising total. The token price on the listing is calculated by dividing the fundraising goal with the tokens supplied through Startup.
For example, if a project allocates 1,000,000 tokens to their fundraising effort with a goal of 100,000 USDT, the average amount of tokens received per 1 USDT invested would be 10. However if the goal is exceeded, and for instance raises 200,000 USDT instead, then the average amount of tokens received per 1 USDT invested would be 5. The total supplied tokens is divided up in proportion to each user’s investment and distributed accordingly once the fundraising period is over.
Eligibility
There are several criteria that have to be met for users to invest through Startup. First, a valid Gate.io account is needed with all KYC approved. Users will need to have an active balance in their Spot account able to cover their pledged investment. Users will only be able to invest once per project and are limited to 1,000 tokens in each project they commit to.
Citizens of the following countries are not eligible to participate on Startup: Afghanistan, Albania, Belarus, Bosnia and Herzegovina, Burundi, Burma, Canada, China, Democratic Republic of Congo, Cuba, Ethiopia, Guinea-Bissau, Guinea, Iran, Iraq, Japan, North Korea, Liberia, Lebanon, Libya, Macedonia, Malaysia, New Zealand, Serbia, Sri Lanka, Sudan, Somalia, Syria, Thailand, Trinidad and Tobago, Tunisia, Uganda, Ukraine, United States of America, Venezuela, Yemen and Zimbabwe.
Risk Warning
Although Gate.io has a thorough vetting process, it’s still the user’s responsibility to research projects themselves and invest with caution. Startup projects are still in their initial phase and several factors may influence their future including operation and underlying technology of the project, regulatory hurdles and other risks. Additionally, the crypto market is highly volatile and price fluctuations may occur. Finally, in some cases technical issues may hinder token withdrawals.
