Solv Protocol is ushering in the next era of fundraising for decentralized autonomous organizations (DAOs) through its Convertible Vouchers. With Solv’s convertible vouchers, DAOs will no longer have to sell their tokens to raise funds and they’ll also enjoy lower financing costs.
Solv Unveils Convertible Vouchers
Solv Protocol, a decentralized marketplace for the minting and trading of NFTs that represent financial ownership is aiming to eliminate the hurdles blockchain startups and decentralized autonomous organizations (DAOs) face while trying to get funding for their projects.
Solv Protocol has launched its proprietary Solv Convertible, which the team says is designed to enable DAOs and startups to create an ERC-3525 token containing locked assets that have a maturity, nominal value, and bond range. Once the maturity date for the Convertible Voucher is reached, the Voucher gets executed like a bond would be. However, for this to happen, the price of the DAO’s native token must fall within the bond price range.
On successful execution of the Convertible Voucher, holders will receive a payout from the project in stablecoins equivalent to the nominal Voucher value. On the other, peradventure the price of the native token falls outside of the bonding range when the Convertible Voucher reaches maturity, “the investor can redeem the tokens whose amount is now determined by calculating the Voucher’s nominal value ratio to either limit of the bonding range,” explains the team.
Solv Protocol claims its fundraising approach via Convertible Vouchers offers numerous benefits to crypto projects and DAOs, including lower financing costs with more flexible payout options for project teams, no liquidation risk before settlement, and crypto startups no longer need to directly sell their tokens.
“Crypto project teams operating under a traditional Treasury-oriented approach often find themselves with limited liquid assets at their disposal. The Convertible Vouchers let teams leverage their tokens to raise funds. On the other hand, investors can invest in tokens with robust returns and benefit from the option of selling Convertible Vouchers before maturity,” explains Solv.
Solv co-founder, Ryan Chow said:
“Our working experience with many DeFi projects has made us realize a lack of liquid assets and cost-effective financing solutions remains an unresolved issue for those teams. That’s why our team created Convertible Voucher as a new fundraising tool that leverages the projects’ native token. For project teams with relatively illiquid treasury, Convertible Vouchers is an optional fundraising model with zero liquidation risk, low financing cost, and without having to sell the tokens. As a growing number of DAOs emerge in the market, we believe Convertible Vouchers will fulfill their fundraising needs and thus unlock a potentially trillion-dollar-size market in the DeFi space.”
The team has made it clear that any crypto project team can mint and issue Convertible Vouchers via Solv’s NFT marketplace. Every Convertible Voucher can be split, merged, and traded before maturity.
Solv’s new fundraising approach is already gaining traction in the industry. The first project to adopt the Convertible Voucher system is Unslashed Finance, a decentralized insurance platform. On January 29, 2022, Unslashed Finance will issue its Convertible Vouchers on the Solv financial NFT marketplace with the equivalent of $1 million as a nominal value.
Solv Protocol says its team is made up of blockchain evangelists, key opinion leaders, seasoned architects in blockchain and fintech, and a veteran DeFi and token researcher.