Allocations with Solv Vouchers

Published on: 14.06.2021

Solv Protocol introduced article about allocations with Solv Vouchers that are now more flexible than ever, being able to bought/sold on any NFT supported ERC platform.

Let’s start at the beginning, which is defining what allocations actually are in the world of cryptocurrency, and why the current design is inconducive to the nature of decentralization.

Allocations are essentially stock options, often given to investors, team members, or advisors who help out with a project. In its simplest form, you can consider it an advancement of payment in the form of vested stock options, otherwise known as allocations. The upside for these allocations is that those who hold them are getting in at drastically lowered market price compared to when a project will hold a public sale. For example, allocation token prices are often 2 or 3x lower at the very least compared to public sale prices, and can often even be as low as 10x or more!

In other words, allocations are often considered premium positions for investors through private offerings. You can think of allocations virtually as free money. Even though it is far from guaranteed, more times than not you will be making a gigantic return on your “investment.” To be clear, allocations do differ from normal stock options in this way, as they are often exchanged for monetary investment or labor, most likely a combination of both. People are “buying-in” to the project through allocations, hoping the projects (and the allocations) will moon in the process, even though the majority of allocations now have lock-up periods ranging from 2 months to over 2 years.

Unfortunately, allocations are virtually impossible for the public to get their hands on as most are done in private sales, outside of Coinlist — currently the only place where the greater public can buy into early allocations. When you factor in that most allocations are “locked-up,” meaning that they carry no liquidity value until maturation, it becomes easy to see how allocations aren’t at all accessible to the public, making them the opposite of what the entire blockchain decentralization ethos was originally about.

Fortunately though, this is all about to change with the introduction of Solv Protocol’s new product, known as Solv Vouchers or SV for short.

Solv Vouchers will be made out of our very own token standard we designed in-house, known as a vNFT standard until we receive official ERC naming rights. As they’ve previously outlined, vNFT tokens are semi-fungible, meaning they sit between the ERC-20 and ERC-721 standards. This allows them to be encoded with information like 721 NFT tokens, while being able to be split, or combined like ERC-20 tokens. Both of these attributes combined make it the perfect token standard to be used for allocations in the form of Solv Vouchers.

For starters, Vouchers can be directly minted on platform. Any project can simply deposit their allocations via smart contract and mint vouchers that designate the value of the total allocations. Not only that, but projects can set the release mode as either linear (by block height), staged (by release date) or as a one-time maturation date.

Not only does this make allocations in the form of Solv Vouchers more flexible in terms of how projects want them to be liquified, but the vouchers themselves are innately NFT tokens and can be bought and sold on any NFT supported ERC platform like OpenSea. Projects that accept NFT tokens as collateral like NFTfy also accept Solv Vouchers, so not only can you break up your allocation for liquidity, but you can borrow against it too should you so choose.

They view this as the future of not just NFTs, but also DeFi as these worlds will collide in the upcoming months. For DeFi to truly grow, they believe that new token standards like vNFT token will need to be adopted to give assets greater flexibility in terms of how they are used.