Spark Investor Guide

IdeaCoin Lifecycle
Post-Raise Flow

Everything that happens after you invest in an IdeaCoin. All scenarios, all edge cases, no surprises.

Overview

The Complete Lifecycle at a Glance

Every IdeaCoin follows the same recursive loop. After launch, the token trades freely while a hackathon is organized. Builders compete, and a decision market on Combinator.trade determines the outcome: fund a builder, or redeem and close.

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Fig. 1 - Master lifecycle. The loop between Hackathon and Builder Funded can repeat indefinitely.
Phase 1

Token Launch

The raise is complete. The IdeaCoin is now live. Here is the initial state of the treasury and what happens immediately after launch.

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Fig. 2 - Treasury allocation at launch
Component Allocation Details
Treasury ~80% of raise 100% in USDG. Held in DAO-controlled wallets.
Liquidity Pools ~20% of raise Deployed in USDC to Omnipair GAMM (IdeaCoin/USDC pair) and Meteora DAMM v2 (with anti-sniper protection at launch).
Token Supply Fixed at launch No inflation at launch. Possible mint only if a builder deal includes token allocation (Phase 4).

🛡️ Anti-Sniper Protection

At launch, an anti-sniper mechanism is active on the Meteora DAMM v2 liquidity pool. This prevents bots from front-running the first trades by enforcing a brief delay or penalty on extremely early buys. It applies during the first minutes/blocks after launch. Exact parameters TBD

What can investors do at this stage?

Phase 2

Trading Phase (2 to 4 weeks)

After launch, the token trades freely. This period serves two purposes: price discovery, and building a holder community around the idea before the hackathon begins.

What happens during trading

  • The IdeaCoin is fully tradable via Jupiter Terminal, which routes through Omnipair GAMM and other available pools.
  • Every trade generates fees that grow the treasury and reward stakeholders (see Fee Structure section below for the full breakdown).
  • Community discussion forms around the idea: what features should the product have, what kind of builder is needed, etc.
  • Duration: approximately 2 to 4 weeks, exact duration TBD per IdeaCoin
Phase 3

Hackathon

A hackathon is launched to find the best builder team for the idea. This is where the concept becomes a real project.

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Fig. 3 - Hackathon flow with edge cases

Builder Application Process

  1. Idea brief is published. It describes the funded idea, the available treasury amount, and the expectations for the PoC. Published on Spark's platform and distributed through partner channels.
  2. Build phase begins. Accepted teams have a defined period to build their Proof of Concept. Duration TBD, expected 1-4 weeks
  3. Builder teams apply. They submit their team background, relevant experience, and initial approach to the problem.
  4. Eligibility check. Spark reviews applications for basic eligibility. Exact criteria TBD, but expected to include: team composition, relevant experience, capacity to deliver.
  5. Submissions. Each team submits: a working PoC or demo, a landing page, and a detailed quote with tiered budget proposals (e.g. "$1,000 for scope X, $2,000 for scope X+Y").

What is a "Quote"?

A quote is the builder's proposal for how much treasury they need and what they will deliver. Quotes are tiered, meaning the builder proposes different scopes at different budget levels. Builders can request up to 100% of the treasury, but the more aggressive the ask, the less likely they are to win the decision market against more conservative proposals.

Builders can also request a token allocation as part of their deal. For example: "Mint 5% of the IdeaCoin supply for the builder team, with unlocks tied to specific KPIs (e.g. X users, Y TVL, Z revenue milestones)." This aligns the builder's incentives with the project's long-term success.

Edge Cases

Edge Case

Zero builders apply. If no builder submits an application by the hackathon deadline, REDEEM is triggered automatically. Holders recover their pro-rata share of the treasury. No decision market is needed.

Edge Case

Hackathon is delayed or postponed. The trading phase simply extends. The token continues trading, and fees continue accumulating. Holders are notified of the new timeline. No funds are lost.

Edge Case

All submissions are low quality. The decision market still opens with all submissions plus the REDEEM option. If the community judges all proposals insufficient, REDEEM will win the decision market naturally.

Phase 4

Decision Market (Futarchy)

This is the single mechanism that determines the project's future. No separate governance vote, no committee. The market decides.

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Fig. 4 - Decision market options and outcomes

How Futarchy Works (simplified)

A decision market uses prediction market mechanics to make decisions. Participants trade on conditional outcomes: "If Builder A is selected, what will the token price be?" vs. "If REDEEM is selected, what will holders receive?" The market uses a TWAP (Time-Weighted Average Price) function to determine the winner. The option with the highest TWAP over the market duration wins. This prevents last-minute manipulation and ensures the result reflects sustained market conviction, not a single large trade.

For the detailed mechanics, see Combinator.trade documentation.

Key Points

Edge Case

Tie or very close result. Combinator.trade's futarchy mechanism defines how ties are resolved. Exact tiebreaker rules TBD. In practice, ties are extremely unlikely in prediction markets as they resolve to precise price levels.

Scenario A

A Builder is Selected

The decision market has resolved in favor of a builder. The project transitions from idea to execution.

Quote Activation
The winning builder's quote is activated. They receive their requested budget from the treasury. This can be anywhere from a small portion to 100% of the treasury, depending on what the market voted for.
Possible Token Allocation
If the builder's deal includes a token allocation, new IdeaCoin supply may be minted for them (e.g. 5% of supply). These tokens typically have unlock schedules tied to KPIs: user milestones, TVL targets, revenue goals, etc. This aligns builder incentives with long-term project success.
Build Phase Begins
The builder executes the project. Payment structure is defined in their quote: lump sum, milestone-based tranches, or a hybrid. This is at the builder's discretion as defined in their proposal.
Token Keeps Trading
The IdeaCoin remains fully tradable on Jupiter Terminal throughout the build phase. Trading fees continue to flow through the 40/10/40/10 split.
Cycle Can Repeat
If treasury funds remain after the builder is funded, a new hackathon can be launched. Same process: new builder submissions, new PoCs, new decision market with REDEEM option.
Stakeholder Role During Build Phase
Builder Executes the project. Reports progress. Receives payments per their quote schedule.
IdeaCoin Holders Monitor progress. Trade freely. Participate in future decision markets if new hackathons are launched.
Spark Facilitates communication, organizes future hackathons if applicable, maintains platform infrastructure.
Combinator.trade Provides decision market infrastructure for any future selection rounds.

Edge Cases

Edge Case

Builder abandons after selection. If the builder stops delivering, the remaining unspent treasury is still under DAO control. A new hackathon can be organized to find a replacement builder. The decision market mechanism resets, including a REDEEM option. Funds already disbursed to the builder are not recoverable (this is a risk clearly defined in the builder's payment schedule, which is why milestone-based payments are encouraged).

Edge Case

Builder fails to deliver on milestones. If the builder's quote uses milestone-based payments, remaining tranches are not released. The DAO retains control of unreleased funds. A new hackathon or REDEEM can be triggered. If the quote was a lump sum, the risk is higher, which is why the community should factor payment structure into their decision market assessment.

Edge Case

Product succeeds. The IdeaCoin becomes a product token. Its value is driven by the product's success, fees, and utility. The treasury may continue to grow from product revenue. New hackathons can be launched for additional features or expansions.

Edge Case

Product fails. If the product does not gain traction after the build phase, a new decision market can be opened. Options: fund a pivot, fund a different builder, or REDEEM remaining treasury to holders.

Scenario B

Redemption (REDEEM Wins)

The decision market has resolved in favor of REDEEM. The IdeaCoin is closed, and holders recover their funds.

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Fig. 5 - Redemption flow

What Holders Receive

Each holder can redeem their IdeaCoin for their pro-rata share of:

  • The remaining treasury (USDG)
  • Accumulated trading fees earned during the trading and hackathon phases
  • Recovered liquidity from the pools

The formula: Your share = (Your IdeaCoin balance / Total IdeaCoin supply) x Total redeemable assets

Important Notes on Redemption

Edge Cases

Edge Case

Partial treasury (some costs already incurred). If operational costs were incurred during the hackathon phase (platform fees, decision market costs, etc.), the redeemable amount will be the treasury minus these costs. This is transparently visible on-chain. Holders may receive slightly less than they invested, but all fees are accounted for.

Edge Case

A holder doesn't redeem in time. Redemption window duration TBD. Options include: indefinite redemption period (smart contract holds funds until claimed), or a deadline after which unclaimed funds are handled per DAO rules.

Edge Case

Treasury grew from trading fees. If trading was active and fees accumulated significantly, holders may actually receive MORE than they initially invested. The redemption includes all accumulated fees.

Comparison

Scenario A vs. Scenario B

✅ Scenario A: Builder Funded

  • Builder receives their quoted budget (partial treasury).
  • Token keeps trading on Jupiter.
  • Product gets built.
  • Remaining treasury available for future use.
  • Cycle can repeat with new hackathons.
  • Long-term upside potential.

🔴 Scenario B: Redemption

  • Trading is halted permanently.
  • Liquidity pools are removed.
  • Holders redeem pro-rata share.
  • Includes treasury + accumulated fees.
  • Terminal state, no further activity.
  • Capital preservation focus.
Reference

Fee Structure

All fees across the entire IdeaCoin lifecycle follow the same flow: claimed from pools into a single Fees Wallet, swapped daily to USDG, and distributed with a 40/10/40/10 split. This applies to trading fees and decision market fees alike.

Fee Flow

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Fig. 6 - Fee flow. Same 40/10/40/10 split for all fee sources.

Distribution Breakdown

Destination Share Purpose
IdeaCoin Treasury 40% Grows the project's capital. Funds future builder quotes, hackathons, and operational costs. Redeemable by holders if REDEEM wins.
Buyback Wallet 10% Used for manual buybacks of the IdeaCoin below NAV. Creates price support and rewards long-term holders.
Spark Treasury 40% Revenue to Spark for platform operations, infrastructure, and partner management.
Ideator Wallet 10% Reward to the person who originally proposed the idea. Claimed on-site with wallet signature verification.

When Do Fees Apply?

When Fee Type Paid By Distribution
Trading (ongoing) Swap fees from all pools Trader (buyer/seller) 40/10/40/10 split
Decision Market Market participation fee Market participant Same 40/10/40/10 split
Redemption None - No fee charged on redemption

How It Works

Daily Swap

Fees accumulate in the IdeaCoin Fees Wallet in mixed tokens (IdeaCoin, USDC, etc.). Once daily, all accumulated fees are swapped to USDG. After the swap, USDG is distributed to the four wallets according to the 40/10/40/10 split. This ensures all treasury and revenue accounting is denominated in USDG.

Buyback Mechanism

The 10% buyback wallet is used to purchase IdeaCoin on the open market when the token price is below its NAV (Net Asset Value = Treasury value / Token supply). This creates a price floor incentive and rewards holders who stay through dips. Buybacks are currently manual. Automation TBD

Ideator Reward

The ideator (person who submitted the original idea) receives 10% of all fees. To claim, the ideator connects their wallet on the Spark platform. The API verifies the wallet matches the one registered in the database, then sends the funds and updates the record. This is a continuous revenue stream as long as the token is active.

Note: all fee sources (trading pools, decision markets) feed into the same Fees Wallet and follow the same 40/10/40/10 distribution. No fee is charged on redemption.

Principles

Key Principles for Investors

🔒

Holders are always protected. The REDEEM option is always available in every decision market. If no suitable builder emerges, you can get your funds back (minus incurred fees).

🔁

The cycle is recursive. As long as treasury funds remain, new hackathons can be launched. One failed builder attempt does not end the project.

🗳️

The market decides, not a committee. Futarchy-based decision markets align financial incentives with decision quality. No backroom deals, no opaque voting.

💰

Builders can ask for up to 100% of the treasury. However, the more aggressive the ask, the harder it is to win the decision market. The market naturally favors proposals with reasonable budget requests and strong deliverables.

Important

Risk Disclaimer

This is experimental technology

This document describes how the Spark platform is designed to work in theory. In practice, there are real humans interacting with the platform, a product being built and iterated on in real time, and smart contracts that are live on-chain.

Things that can and might go wrong include, but are not limited to:

  • Smart contract risk. The contracts powering the pools, treasury, and decision markets could contain bugs or vulnerabilities. They could be exploited or hacked.
  • Human error. Operational mistakes can happen at any stage: wrong wallet addresses, incorrect fee configurations, delayed fee claims, miscommunication with builders.
  • Product risk. The Spark platform itself is being built in real time. Features described here may change, break, or not work as expected. New ideas can be flawed.
  • Market risk. Token prices can go to zero. Treasury value can decrease. Liquidity can dry up. There is no guarantee of returns.
  • Builder risk. Selected builders may fail to deliver, abandon the project, or produce a product that does not succeed. Funds paid to builders are not recoverable.
  • Regulatory risk. The legal and regulatory landscape for crypto is evolving. Rules may change in ways that affect Spark, IdeaCoins, or your ability to participate.

By engaging with the Spark platform, you acknowledge and accept all of these risks. We do our best to build a secure, transparent, and fair platform, but we cannot guarantee outcomes. Only invest what you can afford to lose. Do your own research.

Spark

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This document is for informational purposes only. It does not constitute financial advice. Exact parameters (fees, timelines, mechanics) are finalized per IdeaCoin launch. Always check the latest information on the Spark platform.