The Polkadot unicorn dreams are met, and the $60 million financing goal is only 25% completed.

The blockchain project Polkadot's $1.2 billion valuation encountered obstacles.

Since January of this year, the Web3 Foundation, a Swiss non-profit organization behind the project, has been trying to raise $60 million through private placement. According to people familiar with the matter, the three Chinese funds have agreed to invest $15 million in the DOT token of the project.

Palkadot

However, sources said that the three investors agreed to pay an average price that caused their valuation to be less than $1 billion, which was not enough to realize Polkadot's unicorn dream. (Agreed prices may vary from investor to investor.)

Although it is not clear how many tokens these three Chinese funds have purchased, it is not clear how many investors are involved, but one source said that Polkadot only sold 70% of the original plan of 50 million tokens.

According to sources, Polkadot will continue to try to sell the remaining tokens to qualified investors and distribute them to community contributors free of charge, rather than ending private placements now.

Assuming other investors participate in valuations similar to the three funds, the remaining 30% of the token sales will not bring the target revenue. Therefore, for the goal of $60 million, Polkadot needs to increase the distribution of token sales.

Web3 said in a statement that it could not comment on private placements, "but we hope to make this information public as soon as possible."

According to sources, the proceeds from the sale of tokens will be used to test Polkadot's main network, motivate developers, and fund the research and operations of the Web3 Foundation.

Hope to connect the various blockchains to Polkadot

Polkadot is one of the blockchains that have not yet been launched but are the most anticipated.

Founded by Ethereum co-founder and founder of Paraity Technologies, Gavin Wood, Polkadot aims to build a blockchain network that helps other blockchains collaborate. Another competing network, Cosmos, with similar interoperability goals, was launched in March this year.

Parity CEO Jutta Steiner said in another statement that the company "excited about the new possibilities Brought by Polkadot" and added:

“The true interoperability of a scalable, governanceable protocol has real potential to drive the dream of an open Internet. In the past year, we have been working hard to build (custom blockchain platform). The foundation, and the development on Polkadot has also progressed as expected."

Steiner did not mention the ongoing token sale in the statement.

Demand for such sales has been on the rise in recent months, with Blockstack plans to raise $50 million through compliance (token) supply, while other startups are raising smaller amounts of money.

In October 2017, the Web3 Foundation publicly sold approximately 5 million DOTs and raised $145 million. These tokens are valued at approximately $30. (These tokens are currently running in Ethereum but will be replaced after the main network is launched.) The company employs approximately 37 people and is continually recruiting to find an attractive technology for cross-chain transmission. .

The foundation’s statement stated that the Foundation still plans to re-issue tokens “before and after the launch of the Polkadot blockchain”. "Our goal is to ensure that DOT can reach those who are actively involved in building the Polkadot network."

As mentioned in the Polkadot white paper, 30% of the token supply is reserved for the Web3 Foundation, and the remaining 20% ​​will be allocated before the main network is released. The specific release date has yet to be determined. A person familiar with the matter said that Web3 has spent half of its quota, leaving only 15% of the total supply.

OTC transaction

5% of the total supply is used for recent fundraising. The $60 million originally sought for the deal means a DOT target price of $100 to $120. Since Polkadot does not encourage trading DOT, DOT has not yet launched a mainstream exchange.

But a former employee of Web3 said that the price of DOT tokens on some OTC platforms ranged from $75 to $120.

The former employee said that the project's contributors will participate in governance after the main online line, and must hold at least one token for one year, and investors can immediately realize it.

When asked about over-the-counter trading, Web3 director Ryan Zurrer said, "We are not authorized to conduct such transactions, and such activities are very risky."

Because Polkadot is similar to the permissible blockchain, some members of the Ethereum community are critical of this. When the network starts, there will be a council that decides how to govern by voting. The identity of the board of directors is currently unknown.

The former employee expressed his concern:

“This is essentially a blockchain that is run by Gavin, Ryan and their friends.”

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