Peer Mountain rolls out SmartCap Token Sale Model for ICOs transparency

The SmartCapTM model, underpinned by a price discovery algorithm, enables companies to offer tokens via a capped token sale without running the risk of failure by incorrectly forecasting demand or setting unrealistic pricing.

In a SmartCapTM capped sale, tokens are made available in sequential rounds. Each round delivers a fixed number of tokens, offered at a fixed price. When the order quantity exceeds the amount available, the round closes. Tokens are then allocated by order size, with larger orders receiving priority; unfilled orders receive priority in the next round.

The number of tokens available in the next and subsequent rounds will increase by an algorithmically defined amount. The price will also increase in the same manner, albeit by a much smaller amount. The sale closes at the first incomplete round, and any tokens sold in this final round are priced at the lower price of the preceding round.

The algorithm has been independently validated by Prof. Jos Van Bommel, an expert in IPO securities, liquidity and valuation, according to the company’s press release.