LitShares
Fundraising platform connecting revenue-generating projects with users who want a share.
LitShares is a launchpad and revenue-sharing protocol on LitVM. The official directory describes it as a fundraising platform connecting revenue-generating projects with users who want a share of their earnings. According to the project's website, application creators can raise capital by launching pools where they commit a portion of their fee income to share holders and lock an initial bond as collateral. Shares are purchased along an automated bonding curve after an initial fair-launch phase, and holders receive periodic disbursements over a weekly window following each 30-day accounting cycle. If a project falls short of its stated monthly commitment, the smart contract covers the difference using the creator's locked bond, and complete failure to pay defaults the pool and liquidates the remaining bond to holders. The site also describes peer-to-peer lending markets where users borrow funds by posting shares at 300% to 500% collateralization. Share holders can exit their positions by selling directly back to the pool, which carries an early exit fee that scales down from 10% to 2% over 90 days unless the user opts for a two-day unbonding period.
Questions
- What happens if a project on LitShares underpays its promised revenue share?
- According to the project's documentation, if a project pays less than its 30-day commitment, the deficit is automatically deducted from its locked bond. If a project defaults completely, the remaining bond is distributed to share holders.
- How do share redemptions and exit fees work on LitShares?
- Users can sell shares back to the pool contract without finding a counterparty. Selling immediately incurs an early fee that scales down from 10% to 2% over 90 days, though users can avoid the fee entirely by submitting to a two-day unbonding delay.
- How does peer-to-peer lending function on LitShares?
- Share holders can borrow against their holdings by pledging shares valued between three and five times the requested loan amount. Lenders define the interest rate, term, and principal, receiving interest payments and a 1% fee upon repayment or claiming the underlying shares in the event of a default.