On Monday (April 1), Binance announced that the fourth cryptoasset to go on sale this year on its initial exchange offering (IEO) platform, Binance Launchpad, would be Matic Network's MATIC token. In this article, we try to answer all the questions you might have about Binance Launchpad, Matic Network, the MATIC token, and about the MATIC sale event, which is taking place on April 24.
What Is Binance Launchpad?
On January 3rd, as reported by CryptoGlobe, Binance said that its token launch platform, which was originally created in 2017, was planning to offer for sale one new token "every month in 2019, starting with BitTorrent and Fetch.AI," and that the purpose of Binance Launchpad was to help "blockchain projects raise funds and increase their reach across the crypto ecosystem" by "offering a project’s tokens to up to more than 10 million Binance users," thereby granting Binance users the "chance to be part of potentially game-changing projects."
The Binance CEO, Changpeng Zhao ("CZ" for short), held an Ask Me Anything (AMA) session on March 5th, during which he commented on Binance Launchpad. He started by first talking about the main goals of Binance Launchpad:
"Launchpad is a place where we want to help good projects raise money, but it's not only about raising money. We want to help them raise awareness and exposure... We also help them raise liquidity after the Launchpad initial sale. If nothing goes unexpected, they have a very high chance of getting listed on Binance."
He next talked about how Binance and project teams decide on the initial offer price for the tokens being launched:
We have a choice. We can try top advise the projects to keep the initial sale price low. We think that's a good thing. Do you want it low or high? Most people will choose the initial sale price to be low. When the initial sale price is low, we generate very high demand. So, basically, by design, a very large number of people will not be able to grab it. So, it is a rush sale type of event... We don't know how to price it perfectly so everybody gets and the guys who didn't want it don't get it. So, we want there to be higher demand than supply in the initial sale stage, and this will also help with the listing. When that coin is listed later on, a high demand will help drive the price even higher, hopefully."
The previous three launch events this year—BitTorrent (BTT) on January 28, Fetch.AI (FET) on February 25, and Celer Network (CELR) on March 19—have all been widely successful, with demand far exceeding supply.
What Is the Matic Network?
The Matic team believes that before decentralized applications (DApps) can achieve "mass adoption by mainstream users", they need to be easy to use (offer an "awesome user experience") and the "issues of slow block confirmations and high gas fees" need to be solved.
Matic Network tries to solve these problems by "building a decentralized platform using an adapted version of Plasma framework that provides a solution for faster and extremely low-cost transactions with finality on the main chain." This system "ensures liveliness using PoS checkpoints which are pushed to the Ethereum mainchain," which "enables a single Matic sidechain to theoretically achieve" 65,536 "transactions per block, and possibly millions of transactions on multiple chains in the future."
Here are the Matic Network's main features:
- Scalability: "Scalability is realized by using a decentralized Plasma operator mechanism with finality achieved on a main chain."
- High Throughput: "Can scale to millions of transactions on a sidechain tree architecture. Up to 65k transactions/second on a single Matic chain."
- User Experience: "Smooth UX abstraction from mainchain to Matic chain. Native mobile apps and SDK with WalletConnect support."
- Security: "The Matic chain(s) operators are themselves Stakers and Delegates in a Proof-of-Stake system in the Matic Network."
- Asset Interoperability: "Assets on different sidechains across various blockchains will be made inter-operable by Matic Network in the near future."
- One Stop DeFi Platform: "Multiple protocols enabling extensive decentralized finance applications can be hosted on Matic Sidechains."
Matic's advisors include Esteban Ordano (Founder and CTO at Decentraland), Pete Kim (Head of Engineering, Wallet at Coinbase), and Ari Meilich (Project Lead at Decentraland).
If you are interested in learning more about this project, Binance Research has written an excellent report that is highly worth reading.
What Is the MATIC Token Good For?
According to Matic's whitepaper, the "native digital cryptographically-secured utility token of the Matic Network (Matic Token) is a major component of the ecosystem on the Matic Network, and is designed to be adopted for use as the primary token on the network". MATIC tokens "will be issued as ERC-20 standard compliant digital tokens on the Ethereum blockchain."
The Matic Token is "designed to be a utility token which functions as the unit of payment and settlement between participants who interact within the ecosystem on the Matic Network." Matic Tokens are "expected to provide the economic incentives to encourage participants to contribute and maintain the ecosystem on the Matic Network." Also, the token Matic "will be used as the unit of exchange to quantify and pay the costs of the consumed computational resources." It is "an integral and indispensable part of the Matic Network, because without the Matic Token, there would be no incentive for users to expend resources to participate in activities or provide services for the benefit of the entire ecosystem on the Matic Network." Those users of the Matic Network and/or holders of Matic Token "which did not actively participate will not receive any Matic Token as rewards."
To take part in the consensus process, users need to" stake Matic Token as an indication of that user's commitment to the process," which means that the Matic Token "would thus also be used as a deterrent for punishing stakers for various offences (e.g. invalid blocks, illegally verifying blocks, or invalid transaction execution) by requiring them to first put up a stake of Matic Token before being entitled to participate in the ecosystem."
When and How Is the Matic Network (MATIC) Token Taking Place?
According to Binance's announcement, the MATIC token sale will be using a new lottery format, which was introduced on March 24, with one exception: based on feedback from the Binance community, "the lowest threshold to participate" has been reduced from 100 BNB to 50 BNB. The main details of the sale are as follows:
- "Launchpad Session Time: 2019/04/24 08:00 AM (UTC) to 2019/04/26 2:00 PM (UTC)"
- "Total Token Supply: 10,000,000,000 MATIC"
- "Total Tokens Allocated to Binance Launchpad: 1,900,000,000 MATIC (19% of total token supply)"
- "Public Token Sale Price: 1 MATIC = 0.00263 USD (price in BNB will be determined 1 day prior to the lottery date)"
- "Max Number of Winning Lottery Tickets: 16,666"
- "Allocation Per Winning Ticket: 300 USD (114,068.44 MATIC)"
- "Supported Sessions: BNB only"
Featured Image Courtesy of Matic Network