On the 12th of August 2022 Genius X, a Cardano startup accelerator created by the world-class team behind Genius Yield, announced the world’s first multi-token ISPO. But what exactly is a Multi-Token ISPO and what makes it different from other ISPOs?
What is an ISPO and how do they work in the Cardano ecosystem?
An ISPO is a community-funding method unique to Cardano. In ISPOs, delegators stake their ADA to stake pools run by startups. Delegators give up their usual ~ 4–5% APY (Annual Percentage Yield) in ADA staking rewards in exchange for receiving a project’s native tokens. Startups use these staking rewards to fund development for their new venture. Cardano ISPOs have become one of the most egalitarian mechanisms for startups to raise funds from Cardano’s 3.5+ million community.
In November 2021, MELD - a DeFi, non-custodial, banking protocol - launched one of the first ISPOs on the Cardano blockchain. In that particular ISPO, users delegated to the MELD stake pools and in return, they received MELD tokens. The MELD project keeps the 4 to 5% ADA rewards that users will traditionally get. However, in exchange, they are going to give its users their native token.
How to delegate to ISPO?
Creating a wallet: Users can create any wallet that can hold ADA and allows them to delegate. There are some wallets which are popular among others like Eternl or Nami. It is important for users to keep their private keys stored securely because losing them means losing your funds.
Buying ADA: Users can purchase ADA on an exchange and transfer it to their personal Cardano wallet.
Delegating ADA: Participants need to delegate their ADA to one of the selected pools.
General Benefits of Multi-Token ISPO
- Plurality - Users are able to earn different tokens by delegating ADA to one particular stake pool.
- Non-custodial - the ADA will never leave their wallet (such is the mechanism of the Cardano ecosystem). So, when users stake on the Cardano blockchain their ADA will never leave their wallet, and if at any point they want to withdraw their ADA there will be no lockup period.
- No risk to initial balance - There is no risk to the initial ADA balance when staking on Cardano. If a project fails, users only give up potential staking.
- No slashing - Unlike other blockchains, there is no slashing when staking on Cardano.
- Decentralization - There is no KYC or registration required in order to participate in ISPO because it is running in a decentralized environment.
The only risk to consider is the forgoing of ADA rewards to instead receive the token of new projects.
Multi-Token ISPOs
This is a new feature coming to Cardano in regard to ISPOs and how users can actually delegate on the Cardano blockchain. One of the concrete examples is a Multi-Token ISPO recently launched by the Genius X team.
In a multi-token ISPO, users can get multiple rewards just for staking in a single Cardano stake pool. Usually, the ISPO is dedicated to one project which means users only receive one type of token for their ADA delegation.
Multi-Token ISPO by Genius X
In the first cohort of the Genius X Multi-Token ISPO, users are able to earn the tokens from five different projects by making a single delegation to one single stake pool. These five projects can assign a total of approximately one-third of every project's total offer to ISPO.
Stake Pools
To participate in the multi-token ISPO, users must delegate to any of the four Genius pools: GENS1, GENS2, GENS3, and GENSX. These pools are actually the same stake pools used in th Genius Yield and Genius X ISPOs. The continued use of these pools makes it easier for delegators to participate in the multi-token ISPO because they do not have to move their funds if they are already delegated to any of the stake pools. If users are already delegated in the Genius X ISPO then, they do not have to do anything to participate in this particular ISPO. Genius X team has made it very simple for existing delegators to participate.
Staking rewards
The staking rewards will be split equally for each project. If it is 5 different projects at 20% each, it will be equally weighted so users are not going to be receiving more tokens for one particular project or the other.
ISPO length
The length of the ISPO will last a total of 25 epochs. There is no minimum amount to be delegated so users can delegate as much as they want.
Development
For development, Genius X put projects through a thorough vetting process, so delegators can be assured of a standard of quality. In order to qualify for the multi-token ISPO, it will have to be a project which has already been onboarded into the program.
When is Multi-Token ISPO launched?
The Multi-Token ISPO started when epoch 363 began at 21:45 UTC on September 12th, 2022, and will last 25 epochs. To participate, delegators had to stake their ADA to any of the four GENS pools before the beginning of epoch 364 at 21:45 UTC on September 17th, 2022. ADA can be staked at any time during the ISPO period to participate in the remaining epochs. The multi-token ISPO ends at the beginning of epoch 388 at 21:45 UTC on January 15th, 2023.
What is Genius X?
Genius X fosters innovation by empowering Web3 startups to build impactful and scalable blockchain-based companies that will have a massive global impact. We accelerate and scale incredible Web3 projects through our advisory, mentorship, and growth experiences. They have now announced the world’s first multi-token ISPO.
First Cohort of Genius X Multi-Token ISPO
- Smart Places ($SMART), 900,000,000: Connect-2-Earn social matchmaking application incentivising real-life interactions
- Ledgity ($LTY), 82,800,000: Digital wealth management platform bridging Centralized and Decentralized Finance, bringing private banking to the masses
- Outlaws Brawl ($HYN), 300,000: A multiplayer online First & Third Person Shooter game set in the Hell Hyenas Motorcycle Club universe
- Reach Metaverse ($REACH), 16,650,000: ‘Metaverse-as-a-Service’ — Infrastructure and hosting provider
- Drunken Dragon ($DG), 60,000,000: An Autonomous Fantasy Franchise with Decentralized Intellectual Property where fans can contribute proposals to shape the development of their universe
Conclusion
Genius X introduces the world’s first multi-token ISPO for selected startups in the Genius X Accelerator Program. This is a novel method to distribute the tokens of five new projects (which have been successfully onboarded to the Genius X program), to the Cardano community. Delegators that like the ISPO method of token distribution will be rewarded with the tokens from five separate tokens for the first time!
Genius X's goal is clear: to empower early-stage startups to build impactful and scalable blockchain-based companies that have the potential to bring positive impact on a global scale.