Why The Vault’s $V Will TGE Using Only 1% of the Token’s Supply

The vast majority of token launches in this day and age follow a fairly standardized playbook. Build an app, attract users, raise funds in private markets, and then push ahead to TGE.

The Vault, a reputable Solana stakepool operator, has flipped the popular formula on its head. With no VCs, no instant airdrop, and limited liquidity at launch, The Vault is pioneering an inventive approach to TGE that harkens back to governance ideals of yesteryear.

How does The Vault’s TGE align holders with protocol governance in a way Solana hasn’t seen before?

1% Live at Launch - Why?

After years of operating one of Solana’s most trusted stakepools, The Vault TGE is set to go live on July 23rd. However, unlike almost every other token launch on Solana, $V will be hitting onchain markets with a circulating supply that represents only 1% of its total supply.

While the industry-standard launch procedure decrees that token launches must be a massive liquidity event, The Vault prefers a far more discrete method. Instead of putting tokens directly into their wallets, users will convert vPoints into $V through a series of options seasons.

Options allow traders the right to purchase or sell assets at a predefined price before a specific expiration date, regardless of the assets’ price in the open market. In an exclusive comment to SolanaFloor, Vault co-founder C2yptic outlined why the protocol chose to break the status-quo and opt for an alternative launch mechanic.

"The Vault wants to always strive for something new, and be innovative. There are various of token distribution mechanisms to choose from. We opted for both using a significant portion of our treasury to create the $V/$vSOL liquidity pool where people can buy and speculate on the token, and the options as an incentive mechanism. The options gives a user the ability to buy tokens at a discount (if strike price is below market rate), get tokens while at the same time fund the treasury of the vault. This serves as a fund raising mechanism while attempting to retain max-fairness… The token launches we’ve seen, usually ends up with people investing in the project they believe in to quickly be under water, due to aggressive token emission schedules and programs. We want to bring our token to the markets in the most fair way possible." - C2yptic, The Vault co-founder

The first round of call options is scheduled for September 16-30, which will enable vPoints holders to collectively mint up to 1% of the $V’s supply at a price of 0.00066 vSOL per token. 

By steadily drip-feeding tokens to the platform’s supporters via options sales, The Vault aims to build a solid foundation for $V’s market structure. When asked why The Vault chose not to pursue private funding, C2yptic asserted that the team wanted to maximise fairness and put tokens directly into the hands of its users.

“The Vault as a project is very profitable. This means that we can both fund operations and future product development without doing a traditional fund raise. This gives us the ability to experiment a bit with launching a token, and maximise fairness and controlled emissions. The token ought to be in the hands of our users, as well as those who’d enjoy the coming token utilities. Doing so gives us a good first step towards decentralizing The Vault under a DAO, and getting the token in the hands of those who have the most use of it.” - c2yptic, The Vault co-founder

With no allocations going to private investors at extremely favourable valuations and team tokens locked for 4 years, The Vault’s distribution model is designed to ensure community members get a fair price.

The Vault’s founding team are making certain that users are well-informed heading into token distribution and actively discouraging FOMO.

A Solana Stalwart

One of Solana’s older stakepool operators, The Vault has consistently championed decentralization and ethical staking behavior among the Solana ecosystem. 

Since its inception, The Vault has directed its attention and efforts to decentralizing the network by supporting long-tail validators, namely smaller and newer operators. 

In order to receive stake from The Vault’s pool, validators must adhere to criteria that help to support Solana, such as maintaining performance and uptime standards, and voting on all SIMD governance proposals.

Validators that engage in deceptive practices, MEV attacks, or fail to make meaningful contributions to the ecosystem also risk being removed from The Vault’s stakepool.

The Vault’s approach has proven popular amongst Solana’s staking community. At press time, the stakepool manages over 1.53M $SOL across 100+ validators.

The Vault DAO will initially handle governance proposals via token-weighted voting, but is open to pivoting to alternative models, like Futarchy, in the future.

“Early on in The Vault’s governance, we are going for token-voting to get the DAO governance on its feet first. Once on a stable foundation, we can explore futarchy or other methods. Going with token voting first gives us the chance to work with additional integrations, such as Votex.so, which is Solana’s only votes exchange protocol.” - C2yptic, The Vault co-founder

VoteX, an emerging application, permits network participants to trade the vote tokens that enable them to vote on critical governance proposals across Solana. 

The platform effectively streamlines a process exemplified during the SIMD-0228 vote, when SolBlaze purchased vote tokens of Solayer.

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