This page provides an overview of equity financing with SFTs
The equity financing arm of Solv features an SFTized launchpad that allows blockchain projects to conduct token sales to retail investors. Since the tokens on sale are contained (or "wrapped") in vesting SFTs, issuances and transactions of these token-bearing SFTs do not affect the market value of the underlying tokens in any direct way.
Blockchain projects have leveraged the programmable features of SFTs to apply complex but useful functionalities such as vesting schedule, type of vesting, whitelisting, and so forth, to conduct SFTize token sales that work best for their financial profiles and runways.
Equity financing SFTs (previously Vesting Vouchers) allow native tokens to be locked within it and vested over time. It offers protocols an allocation (i.e. an allotment of tokens or equity that may be earned, purchased, or set aside for a certain investor, team, or other related entity) management tool that can lock up any digital asset in a no-code front end.
How an Equity Financing SFT Works
Maturity date (vesting period), token amount, and type of vesting are the main terms for the configuration of a vesting SFT.
In this example, Solv ($SOLV) mints a vesting SFT containing 2,400 SOLV tokens and is scheduled to vest all the tokens over 5 stages, from December 24, 2021, to December 24, 2026.
Type of Vesting: Three types of vesting are available for projects interested in issuing SFTs for equity financing: linearly vesting, immediate ("one-time"), and customized ("staged") vesting types.
The most common utility of vesting SFTs is equity financing. Blockchain project choose Solv to sell their locked allocation wrapped in a Vesting SFT to institutional and/or retail investors. This can happen in what's known as an Initial Voucher Offering (IVO), an SFT financing platform designed for projects in any stage of development.
With vesting SFTs, projects can easily manage their allocations in a no-code front end, with the ability to provide an on-chain zero-trust OTC market for users to trade their allocations in an open and transparent way.
Projects can use vesting SFTs containing native tokens sold at a lower-than-spot price to attract early investors or to airdrop free vesting SFTs to the community in marketing campaigns.
Since the launch of vesting SFTs V1 (previously known as "Vesting Voucher"), over 60 blockchain projects have issued SFTs for fundraising, managing allocations, or building community. In January 2023, the total trading volume for SFTs reached $40M.
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