How Impossible’s Buyback Program Protects Launchpad Users
Impossible Finance's Buyback Protection Program mitigates risk for users while empowering projects to build products and communities that redefine the crypto space.
Impossible Finance is committed to launch high quality projects that are fair and accessible for users of our platform. We aim to set the bar for what launchpads within the space should strive for. We have introduced in previous IDOs, the market-leading “Buyback Protection Program” (the “Program”). The Program creates a win/win model for both projects and users — mitigating risks for users whilst empowering projects to build products and communities and redefine the crypto space –all in a sustainable way.
How does the Program work?
The Program is available in IDOs where the Project has agreed to reserve part of the IDO proceeds (the “Proceeds”). The Proceeds are held in a multi-sig controlled by both the project and Impossible. Impossible will announce the details similar to the table below during the relevant IDO period. The Program is activated when the token’s market price is expected to fall below a specified buyback price. Impossible will confirm the activation several weeks before the buyback period. When activated, the IDO participants may sell back at the buyback price. The buyback period takes place typically 3 months to 1 year after the IDO. The parameters of the Program for each IDO may vary depending on the project and market conditions.
The Program is our first step in creating the concept of what our whitepaper termed “self-sustaining IDO.” The Program not only helps mitigate the downside risks for users, but also encourages project accountability on progress, project spending, and community expectations.
Illustrating how the Program works
Let’s look at Impossible’s launch of the IDO of Aura Network as an illustration.
Here, Aura Network has pledged the Buyback Price of US$0.045, protecting the maximum downside of IDO participants to approximately 30%.
Let’s look at these hypotheticals with details at launch and before the buyback period:
Launch in July 2022 — IDO Price = US$0.065
- User buys 100 AURA tokens = net worth US$6.50
Example 1 — AURA price is expected to remain above Buyback Price
Jan 2023 — AURA Market Price = US$0.10 (price increased 40% from IDO)
- The Program is not run. If the Program were run, the user would forgo the buyback as the price is US$0.10 = net worth US$10. If 100 AURA were sold back, the user would only sell back at US$0.045 = net worth US$4.50 (loss of US$5.50)
Example 2 — AURA price is expected to fall below Buyback Price
Jan 2023 — AURA Market Price = US$0.039 (price fell 40% from IDO)
- The Program is activated. The user would sell 100 AURA at US$0.045 = net worth US$4.50
- If the user sold on the market, their net worth would be US$3.90
- Under the Program, the user avoids an additional loss of US$0.60 (over 13%)
Who is eligible to participate in the Program?
- “Eligible users” are those whose KYC’d wallet addresses participated in the IDO.
- Eligible users can only sell back the tokens, which were bought during the IDO and held at the same wallet address used in the IDO (“Sale Wallet”) until the Buyback Period.
- Typically, tokens sold or transferred out of the Sale Wallet before the Buyback Period are ineligible. But, each project may exempt specific activities (e.g., staking and liquidity provision campaigns).
- Once the Program is activated, the buyback process will be conducted on OpenSwap** or similar platform.
- Eligible users will receive the same cryptocurrency used to complete the initial purchase (e.g., BUSD or IDIA).
*These guidelines are subject to changes by the Impossible Team and are in no way final. Impossible will announce for each project where the Program is available, specifying any additional conditions that apply. Stay tuned for further announcements.
- *OpenSwap was Impossible’s second IDO project. We are firm believers to continue helping our past and present projects to integrate together to build a stronger Impossible ecosystem.
About Impossible Finance
Impossible Finance is the go-to crypto investment platform that empowers you with high-quality, fair and accessible crypto opportunities. We simplify DeFi so you can enjoy fairer investing, cheaper trading and better yields through our accelerator, launchpad, and swap platform.
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