$CLOUD Launch Megathread

[fplee]

Introducing $CLOUD, the Sanctum token

Thank you all for the outpouring of comments and suggestions on my first tokenomics proposal. I am floored by the power of our community. There are dozens of forum posts, hundreds of comments, and thousands of thoughtful Discord messages. I want to give a special shoutout to @JamesleyHanley, who wrote an excellent contribution to suggest how the community allocation should be used.

We took a community poll and $CLOUD was the clear favourite. LFG $CLOUD!

We have closed Wonderland S1 ahead of schedule

The foremost purpose of Wonderland was to delight our users and provide a respite from point program fatigue, and I’m so glad that we did so. People really, really loved the design of Wonderland, and the response to the community quests was incredible.

Wonderland exceeded our wildest expectations in every single way. Over 300,000 wallets have signed up and we have thousands of active users on the Discord. We were originally going to run it for longer (we had plans for 12 quests) but it has succeeded at what we wanted it to do and we don’t want it to overstay its welcome. So we decided to end it on a high note rather than drag it on interminably.

We thought about launching Season 2 immediately after the end of Season 1, but we decided against it in the end. Moving to Season 2 right away would be great for TVL, but I want to take our time and build a Season 2 that will blow you away just like S1 did, rather than more of the same. And $CLOUD will take pride of place in it. We fully expect TVL to drop now that we’ve announced the end of Season 1. That’s totally fine. TVL is nice, but a lot of time it’s a metric that people try and pump to raise from VCs, and we’re not doing any of that. What matters to us is real stake from real people.

We have some issues with retroactive XP and people having their XP zeroed out. Not to worry, the team is working on fixing this now to give everyone your correct XP numbers.

We’re doing a truly public token launch

LFG is not just a token launchpad. It is not a way to get some easy publicity. And it is definitely not for your team and investors to dump on retail. LFG lets us get $CLOUD to the right people in a transparent, decentralised, and fair manner.

It’s important to us that everyone gets the same opportunity to get the token, no matter who you know or how deep your pockets are. We have had a lot of VC interest; I have turned down every single one of them. They can buy it at launch like everyone else. We will start the curve low, at the price of our first ever round (50M FDV), and sell a relatively larger proportion of the supply. No “low float high FDV” meta here – 18% of the total supply will be unlocked at launch.

The true potential of LFG lies in channelling the attention and wisdom of 250,000 people into improving our product, roadmap and token launch. And I’m going to lean as hard as I can into that. We will do a truly public token launch: I’m going to pull away the curtain of exactly what goes into launching a good token, and get your input every step of the way.

We will kick off with a Sanctum Twitter Broadcast. Then we will also do deep dive whiteboard sessions on LFG vault and curve design with the Jupiter and Meteora team – how we’re thinking about designing the parameters to give everyone a good entry. And we will end off with a special Jupiter Planetary Call.

There is so much to learn when launching a token. We are going to document all our fuckups and our learnings along the way. I will try my best to bring you along in that journey, so that everyone can learn from it, and we can spearhead the decentralised meta, Sanctum and Jupiter LFG together.

We are designing the initial airdrop to separate the farmers from true believers

I can’t talk too much about the airdrop; there are some tricks up our sleeves which lose their effectiveness once revealed. But there is something I can gladly talk about, which is designing our mechanisms to create separating equilibria.

The idea of a “separating equilibrium” comes from game theory. It’s hard for us to separate dumpers versus true believers, so we design a clever mechanism that causes dumpers and true believers to separate themselves.

$DRIFT was a good example: people can choose to claim their allocation immediately, but can double their allocation if they wait 6 hours. I think this was a great start but was perhaps too good of a deal: 6 hours is not a long time to wait, and so both dumpers and true believers waited. This is a “pooling equilibrium”; you get no information. One simple tweak could be to extend the duration and make it continuous: 50% unlocks immediately, the rest over 7 days. You can claim at any time but you forfeit the remainder. None of this is set in stone yet; details will come later.

What CLOUD will be used for

SOL is used for governance (validator voting on SIMDs) and to control a scarce resource (blockspace). I thought very hard about what the scarce resource $CLOUD will control. It will be used for governance, and controls capital, of course; but as we well know, the scarcest resource is attention. Prospective partners will need to stake $CLOUD to qualify for the Sanctum Verified Partner program, and $CLOUD holders will vote on which partners make it in. These partners will be lavished with attention as we craft custom pets, quests, and more for their LSTs. And of course, $CLOUD will take pride of place in Wonderland S2.

That will be a good start. I am not interested in short-term things like gauges, bribing, or revshare, until much later down the line (if ever). Sanctum’s vision will grow exponentially over the months and years. There will be many possible utilities for $CLOUD over Sanctum’s many new products as we grow to become a cornerstone of the world economy.

We refuse to pay any CEX listing fees

We are making a public commitment here to pay no CEX listing fees of any sort. Zero, nada, zilch.

Any CEX can list us at any time, and we welcome them to do so. We simply refuse to pay any listing fees.

Why have we done this?

CEXes ask for a lot. And when you give your tokens to them, you have no control or transparency in what they do. CEXes almost always ask for large listing fees: 1%, 3%, 10% of total supply. I would much rather those tokens go to the Sanctum community instead. Some CEXes ask for a “security deposit” (hundreds of thousands of dollars) that they pocket if your token launch doesn’t drive enough net new users to their platforms. And sometimes CEXes fuck up: one of Drift’s CEX partners listed their token 2 hours earlier, which resulted in wild price swings.

Despite this, founders frequently fall over themselves to fellate the CEXes and secure listings at all costs, because it’s a really big risk to do otherwise. It is very, very scary. The token is your baby, your blood, sweat and tears, years of effort – are you really going to do something different, which might completely flop? Or will you follow the established playbook?

We struggled a lot with this decision. We may well regret it. But in the end we decided to follow our heart and do what we think is right.

The tides are changing. We now have a critical mass of Solana-native users, thanks to Jupiter, DRIP, and memecoins. Engineering-wise, the chain is a lot better now than it was before. Our explicit goal is to push forward the decentralised meta and to build a Solana-native economy. We are going to make on-chain a first class citizen, with the help of LFG. We will make this a launch the world will remember.

And now, the actual numbers:

$CLOUD token

Ticker: CLOUD

Total supply: 1,000,000,000 (1B)

Initial circulating supply: 180M (18%)

Launch Liquidity (18%)

18% of the total supply will be unlocked at launch. 10% will be given in the initial airdrop, and 8% will be used to seed liquidity in the LFG launch pool. The proceeds and any unsold tokens will go to the Strategic Reserve.

Community Reserve (30%)

30% of the total supply will be governed by the community. IMO, the community reserve should be used strategically to grow the pie (via future airdrops, active staking rewards, grants, etc.), although the community decides what to do with this at the end of the day. This thread by James Hanley is an excellent suggestion.

Strategic Reserve (13%)

13% of the supply has been allocated to the Strategic Reserve, which will be used by the team to grow the Sanctum ecosystem. It is earmarked for future acquihires, strategic investors, LST partners, grant recipients, loans to market makers, on-chain liquidity, and so on.

Jup LFG (1%)

1% will be given to Jupiter LFG.

Team (25%)

25% of the supply has been allocated to founders and core contributors, who have been building Sanctum for more than three years.

Investors (13%)

13% of the supply has been sold to investors. We sold some tokens at 50M and some at 60M, most of them back in 2021. Full details here.

We have worked on Sanctum for three years, including throughout the bear market. We take an appropriately long-term perspective. All team and investor tokens unlock over 3 years with a 1-year cliff. That means that 33% of the tokens will unlock 1 year after TGE, while the other 66% will vest linearly over 24 months after the cliff. All team and investor tokens will be fully vested 36 months after TGE.

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wen token? what’s next? We’re moving as fast as we can, but we will never rush things. For the next few hours I will be streaming live to answer all your questions. And for the next few weeks we will be incredibly public with the process – expect deep dives with the Jupiter and Meteora team on LFG curve design, a reveal and explanation of our airdrop criteria, and a special edition of a Jupiter Planetary Call.

We’ll be really stressed out, but we’re going to have a lot of fun too. I’ve asked the entire team to fly over for the launch, and we plan to have a little launch party as we put our labour of love – three and a half years of blood, sweat, and tears – finally out to sea.

Will you join us on our maiden voyage?

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How we’re making $CLOUD the fairest and most aligned launch yet

I wanted to talk about how we’re working to design the LFG launch to make the $CLOUD launch truly great: as liquid, fair and aligned as possible for everybody.

== A great launch: liquid, fair, and aligned ==

A great launch must be liquid. The baseline of any great launch is that it must facilitate robust price discovery. There must be thick liquidity on both sides, so that everyone who wants to ape in can ape in and everyone who wants to dump can dump without incurring large price impact. At the end of the process, all buyers and sellers have been sorted out and are happy with what they have.

A great launch must also be fair. What is a fair launch? To me, a fair launch is a launch where everybody gets the same opportunity to buy, regardless of how technically savvy you are, how many followers on Twitter you have, or how deep your pockets are. That means botters, VCs, KOLs, CEXes etc., should all have to come in at the same terms as your average retail investor. This way, everybody gets an equally good entry, and retail does not end up becoming exit liquidity.

A fair launch is very hard to do. Let’s think about the basic version of the LFG launch pool. It starts off with all the $CLOUD and no USDC. It starts selling $CLOUD at a very low price and as more people buy in, the price goes higher and higher.

After lots of buying and selling, the pool reaches an equilibrium, with thick liquidity at both ends. We have achieved robust price discovery.

Great! Is this a fair launch? Sadly not. The reason is simple: bots. The start of the curve is a very good deal; everyone knows this. Therefore there will be many, many bots jostling to buy the first few tokens and flip them immediately to retail at a higher price. Instead of retail getting a good price, now it’s the people running the bots who are making millions. This is unfair.

To prevent bot sniping, we will be using Meteora’s “Alpha Vault”. Instead of being first-come-first-serve, the Alpha Vault opens a few days before trading actually begins. Anyone can deposit and withdraw any amount of USDC at any time until two hours before the launch. When it closes, everybody who deposits into the vault gets filled proportional to the USDC they put in. The price they pay will be a discount to the market price, since the initial tokens are sold at a very low price. In return for this discount, the people who enter the vault are locked up for a period.

Launching like this is fair, but we can do better. The last thing a great launch must be is aligned. That means that the tokens should end up mostly in the hands of long-term aligned believers in the protocol. Ergo, only those who are long-term bullish and patient should get a discount.

Therefore, we are introducing a long lockup period on vault buyers. This is to chase away short-term people out of the vault, so that those who remain can get a larger discount and better price.

Basically, we are tweaking the lockup period so entering the vault becomes a difficult choice, not a no-brainer. If the lockup period is very short, both short-term and long-term people will choose the vault. If the lockup period is too long, even long-term people will have a hard time justifying their entry. We must design to create a separating equilibrium.

What is the lockup period? We haven’t decided yet. We are currently thinking of a 2 month cliff and 6 month vest, but this may change based on community sentiment (e.g. 1 month cliff/3 month vest, 3 month cliff/9 month vest). But it’s important to us that the maximum lockup period is less than 12 months: I want vault buyers to fully unlock before the team and VCs do, not the other way round.

Please feel free to dump on us

What this means for you

What should you do if you’re planning to participate in Sanctum’s token launch? As a buyer, you have a simple choice to make. Are you long-term bullish on the protocol? If yes, then choose the vault. Otherwise, buy using regular LFG instead.

Both can be good; there is no right answer. Before you enter the vault, please think carefully: if a bear market comes in the next few months, are you really going to be able to stomach a big drawdown without being able to exit? Think long and hard about this before you make your decision.

Previously I said that we will start the curve at $0.05. I am happy to announce that we are instead going to start the curve at $0.001 (1M FDV). I want to add more zeroes in front but I will need to check with Meteora if that is possible. Needless to say, this is lower than any price we have sold or will ever sell the token at. We want to give LFG participants as good an entry as possible.

The LFG curve will end at $0.50. That means that the maximum price any LFG participant will pay is $0.50 (500M FDV). We think that this will allow room for price discovery while preserving good upside for LFG participants.

The vault will be capped at $10M, 50% of the total USDC amount. That means the maximum price any vault buyer will pay is $0.18 (180M FDV), no matter how many people deposit into the vault.

Vault buyers will always get a ~50% discount on the initial starting spot price. The actual discount may end up larger or smaller depending on subsequent market demand. If you are not confident, you may want to hold off on the vault and see if you can grab the tokens at a lower price. But of course you may also miss the opportunity if the price immediately shoots to e.g. $1. In that case vault buyers will have got at least a 82% discount.

If you take one thing away from my post, remember 50-50-50:

• The max price for the entire LFG curve is $0.50.
• If you enter the vault, you get a 50% discount but are locked for 6 months (tbc). This is meant for long-term buyers.
• The vault is capped at 50% of the total LFG curve amount. The max price vault buyers will pay for $CLOUD is ~$0.18 (180M FDV).

Our North Star at Sanctum is delighting our users. And one way to delight our users is to do a great launch: to give all our users a good entry into $CLOUD so we can all happily grow together.

We are making several very big bets with this launch. No CEX listing fees. Everything you read above. All VCs, protocols, and CEXes are all watching very closely, and the result will set the tone of all future launches. Will they think of the $CLOUD launch as a smashing success? Or a cautionary tale?

Solana can be the birthplace of truly great launches. If you want to see the paradigm shift to the decentralised meta, lend me your support. Spread the word, tell your friends, and let’s make this a launch for the history books.

Thanks for reading! As usual, there will be a technical deep dive with @0xSoju from Jupiter on 14th June 2024, 2pm UTC.

[fplee]

On the $CLOUD airdrop, part 1

There is a rot in crypto: the scams, the ponzis, the memecoin rugs. The bigger we grow, the more grifters show up – like centipedes slithering out of the floorboards – and the more polluted this space gets.

But strip away the rotten outside, and you’ll find a tiny kernel of good people. These are people who understand the Primordial Vision of crypto. They know why we’re here.

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These good people are the ones we love, embrace, and reward. We reward good people so they won’t lose hope; to remind them that other good people exist; to encourage them to stay around and help us build a better world. That is our North Star: to reward the behaviour we want to see more of. ^[1]

Earnestness

What is “good”? What behaviour do we reward? In one word – earnestness.

Earnestness means doing the right thing for the right reasons.^[2] It means caring about Sanctum because you believe in our mission, not just because you want an airdrop. Earnestness is long-term alignment, boundless optimism, anti-greed. Earnestness is love and a little bit of naivete – loving the awesome potential of crypto, and wanting to build that future together.

We have been very public about this. Check my first ever public thread. On podcasts and public appearances I have always underlined the importance of being earnest. Heck, the answer for Quest 4 (which over 100,000 wallets completed) was “the earnest shall build our new world”.

We believe that earnestness is just as important as capital. Hence we reward it appropriately.

Half of the airdrop (5%) will be allocated in proportion to Wonderland XP. The other half (5%) will be allocated according to earnestness.

How to measure earnestness though? Talk is cheap – everyone will say they are earnest.

This is why we launched Sanctum Profiles. We have assigned every profile that connected a social account an Earnestness Level. For most of these profiles this level will be zero – only pofiles with non-negligible contribution will have an Earnestness Level. The higher your Earnestness Level, the larger your share of the 5% allocation will be. Additionally, anyone with a nonzero Earnestness will get a small multiplier to all their Wonderland XP.

We focused on rewarding what we want to see more of. We want to see real understanding, explanation, and evangelism of our mission; detailed and unsolicited feedback to improve the protocol; users translating our posts and podcasts into other languages; asking thoughtful questions; helping new users on the Discord; reporting spam, and so on.

A lot of metrics are easily gamed and therefore we did not use them. That means no silly Zealy quests, no Discord level grinding, no simple counting of Twitter posts/Discord messages. Only real contribution, as judged by the team, was rewarded. We have spent the past months searching through Twitter, Discord, Telegram, YouTube etc. to identify contributions, from 2023 all the way up to the cutoff date.

Contribution does not mean pure bullposts or “yes-men”. Posts like “excited for this new feature” or “team keeps shipping!!” – while much appreciated – did not qualify. Neither did posts like “Sanctum is going to be the next big airdrop and here is how to farm it”. Instead, we looked for thoughtful posts that helped push the discussion forward or improve the protocol, regardless of whether they agreed with us or not. There were several people with negative but thoughtful comments and we made sure to reward them too.

We tried to include absolutely everybody when searching for contributions. We made liberal use of Google Translate and asked trusted community members from around the world to suggest people who have been helpful in non-English language communities. But we are only human. We also had to make some judgement calls placing people between between tiers.

If you are a person who was missed out in this round, fret not. There will almost certainly be more airdrops in the future, and if you continue to be earnest, I am sure that you will be rewarded.

To be clear, even if you did not create a profile or connect your socials, you will still be eligible for the $CLOUD airdrop. There are good reasons not to (privacy or security reasons) and we would not punish anyone for doing so. But those who chose to, and have contributed substantially to the protocol, get a boost.

Conclusion

A lot of blood has been spilled over “linear vs tiered”, but this is a false dichotomy. What we really care about is rewarding the people who have contributed to our protocol – by capital or by earnestness.

No airdrop is going to make everybody happy. But that’s OK – we are trying our hardest to make good people happy instead.

Thanks for reading! As usual, I will hold a technical deep dive/AMA with @0xSoju from
@JupiterExchange on 04 July 2024, 2pm UTC.

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1. Visakan, Focus on what you want to see more of focus - @visakanv's blog ↩︎

2. PG, Earnestness: Earnestness ↩︎

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[Aro]

You can just make a new one whenever xD

[Horu]

8 more reserved spots

[Allembandz]

I love the team and their vision to award the true believers of the project and not paying Cex’s. I’ve been scammed multiple times and rugged but just listening to your AMA and reading x threads and looking into what you are working on I’ve been inspired by your efforts and the project. Youve shown you really care about the community and actually care about the feedback you receive. You have given me hope that there are good people out there and the true vision of crypto still exists in the hearts of the ones who truly believe. You believe In the people and for that I believe in You! Amazing, cant to see $CLOUD and the opportunities to come

[Allembandz]

Earnestness means just as much as capital! I get goosebumps when I think of this. what a revolutionary team. Infinite LST future is genius on its own but airdrop criteria takes the cake. I think $CLOUD launch will set the tone for how the whole game gone be played. watch this space!

[Allembandz]

Loved S1 of wonderland and the idea of having pets of the LSTs we hold but I thought it would be cool if we could interact with the pets somehow in the community , maybe be able to upgrade them and interact with other community members . or maybe like a mini game to earn points to earn more $CLOUD or something. other than that . I’m a huge fan of your work

[Halfa]

Congrats on the launch guys!

LP thicc, the integrations and well thought out deflection of FUD. Admitting mistakes and moving on to do a better Season 2 & Season 3

Looking forward for community discussion on how we can move forward together.

SANCTUM ALIGNED

[fairysquid]

fplee spamming sybiiiiilll!