BOS Token and the Premium Future of Sovryn

[yago]

In this post I want to suggest a path to maximizing our returns from Sovryn’s BOS allocation. I want to maximise the following:

1. The value returned to SOV stakers
2. The value of the SOV token
3. The future of Sovryn

I have been watching what Michael Saylor is doing with great interest and I think there are important lessons for us. Saylor has managed to architect a situation where the assets he is acquiring are maximizing value for shareholders and bondholders, while at the same time building the future of Microstrategy. This is a feat of business strategy, corporate governance and financial engineering.

Elsewhere I have spoken about a plan to develop a significant asset base for Sovryn - not just of BOS, but also of other tokens. My view is if Sovryn ends up with a significant amount of tokens, it could trade at a premium to NAV (net asset value). That means that if the tokens held by Sovryn are equal to X, the marketcap of SOV can be greater than X, trade at a multiple to X.

How can we achieve this?

Before I answer that question, I would like to propose that there are two ways we can distribute BOS (and other tokens) that I have not seen much discussed.

1. SOV Token Yield
2. SOV Burn/Token Release

SOV Token Yield
Currently SOV pays yield from DeFi protocol revenue, primarily in the form of BTC. This value is paid out on a bi-weekly basis according to VP. SOV token yield would mean that the token assets held by Sovryn would be paid out over time, according to VP. This would have several advantages:

1. It would make future returns on staking more obvious and guaranteed, increasing staking desirability.
2. It would mean that tokens are not ‘dumped’ all at once.
3. It would make SOV an “index” like asset that represents broad exposure to the Bitcoin-native ecosystem

SOV Burn/Token Release
In this method, SOV holders can seek immediate (pro-rata) liquid tokens. Let’s assume someone holds 1% of SOV. They can burn this 1% to release to themselves 1% of the tokens held by Sovryn.

1. SOV would have a floor value of the tokens held by Sovryn.
2. As more tokens are added, the value of SOV would increase.
3. The circulating supply of SOV would constantly decrease

So we can create a floor value for SOV. How can we create a premium to that value?

Typically a business is valued on its current assets, plus the future value of those assets, plus its future earnings potential, plus intangibles. Saylor has demonstrated that in addition to these, there is also value in a highly volatile asset that can be hedged against.

There is significant growth in “liquid token funds” - traders and funds who need now to generate yield on tokens. I expect this growth to accelerate. Now imagine you are just such a trader. I offer you the following opportunity: Buy SOV, go short BOS. If SOV outperforms BOS, you have made a tidy profit. And your downside risk? Zero. SOV cannot underperform BOS.

These funds are similar to the bond houses MSTR is selling its 0% interest bonds to - they need exposure and there are not a lot of places to get it. Sovryn can create a product for this market that is unique and highly valuable.

Now, why would SOV outperform BOS? Perhaps it has added more tokens to its treasury. Perhaps it is working on a new, exciting project. Perhaps more people are realizing the asymmetric nature of this trade and are beginning to bid for its premium, so part of that premium is starting to be reflected in SOV price. Perhaps all of the above.

Microstrategy did not happen overnight, it began its BTC purchases and incrementally perfected its “tokenomics”. As it ramped up, its premium to NAV ramped up with it. MSTR premium to NAV is now between 2.5-3X.

If we play our cards right, we can make a lot of people very angry about how “overvalued” SOV is.

Food for thought. Stay Sovryn.

[thesolution1506]

Sovryn as MicroStrategy, but for $BOS. I like this.

I would prefer option 2 - SOV Burn/token release, since it most precisely links SOV value to its asset base and establishes a floor value.

The missing link, however would be to somehow allow more SOV to be issued to “capture the premium” by using it to buy more $BOS, or other assets for Sovryn’s treasury.

Thats really a core point of the strategy, and how Saylor is able to produce “BTC yield” for shareholders. Sovryn would be able to produce “BOS yield” for SOV holders.

Also worth considering: would the community be more willing to do this simply with BTC instead? Or perhaps both BTC and BOS?

Either way, I’m a huge bull on MicroStrategy and think it’s redefining how all companies are valued. Any action to emulate its success is worth considering.

[TM1]

Before I’m even able to digest, I’m very happy to see you (Yago) here, and I’m even more delighted to see having a discussion about the future of Sovryn.

[StanTheGreat]

The crypto market is changing, people are looking for safer and alternative strategies to secure their profits and hard earned money. We can see the success of such strategies like hedging and index even inside the crypto market.

Implementing the following strategy on Sovryn will not just limit us to hold $BOS but can make $SOV an index for exciting projects in the Bitcoin space and eventually achieve a premium asset value.

$BOS will be just the beginning.

Looking forward to the implementation of this idea!

[Phrygian12]

Are we saying Sovryn stakers get no $BOS, and instead treasury holds it all?

Also:

The only problem I see with this is: most tokens trend to zero against BTC over time. As the treasury tokens lose value, so would SOV, basically turning Sovryn into exit liquidity.

[Dante]

This is very interesting post Yago. It’s a good way for the treasury to become more active and engage with bringing value to SOV. Surely the 2% part from BOS that will go to treasury will become very useful for the future of Sovryn.

[sovrynday1]

It’s obvious to me our community are split into 2 camps:

1. People that wants to exit at as good price as possible

2. People that want to build on SOV making it long-term viable

so a solution for both would probably be; Being able to liqudate your staked SOV for assets (at a early unstake fee, or for 1:1 liquid SOV)

so far, for 4 years of runway all of our community has been bled dry of money while founders & devs got rich, additionally now most of our Sovryn team has big salaries from bitcoinOS & tokens gifted (again).

its a great disservice to not make investors whole when you all got rich. Playing a long term game benefits you all with already large 0 cost SOV allocation & vests, you need to think about your investors in the short term as well, esp in a bull market where people expect easy profit (after being told our token only suffered because of bear market conditions.)

makes sense if some of the SOV whales with 0 cost basis (such as @Armando ) also donates a big portion >70% to a 5 year locked vesting contract with 3 year cliff (per his recommendation).
this will help remove the conflicts of interest BOS & SOV currently face with these whales “airdropping themselfs 10% liquid BOS” as it looks like a cash-grab for their large 0 cost bags if they were given this airdrop without vesting schedules

[DojoLiam]

Yes, but if we do a the burn mechanism you can trade for liquid BOS, which would increase your VP over time (as curculating supply would dwindle.

I love this Idea:

SOV Burn/Token Release
In this method, SOV holders can seek immediate (pro-rata) liquid tokens. Let’s assume someone holds 1% of SOV. They can burn this 1% to release to themselves 1% of the tokens held by Sovryn.

1. SOV would have a floor value of the tokens held by Sovryn.
2. As more tokens are added, the value of SOV would increase.
3. The circulating supply of SOV would constantly decrease

Slowly our VP share would grow, and token price would have to follow. Sov APY would grow with the price of SOV.

That would be a yes vote from me. Especially if Stakers could get early acess to BOS so we can get direct exposure. (Seeing how all BOS would go to treasury)

[Phrygian12]

I do like the Burn idea. @yago do we have any ideas of Future token launches that are helping you make this decision?

The more I think about this the more I like it. SOV could be worth quite a bit more doing this. This could be especially profitable if we can get some SOV trading volume for SOV rewards on the new DAPP.

[SovOG156]

Problem is you are comparing accumulating “no value” shitcoins into treasury with accumulating Bitcoin into the treasury.

Being a Bitcoin DEX, Sovryn should have been accumulating Bitcoin into it’s treasury from inception.

Sovryn should have been the treasury model Misrostrategy followed (knowingly or un-knowingly) and not the other way around.

To propose Sovryn abopts a Microstrategy approach to its treasury and only talk about accumulating the likes of $MYNT and $FISH is comical at best.

One of the draws to owing Microstrategy shares is the fact that over time the shares accrue satoshi value.

Whereas tokens the likes of $FISH and $MYNT have only bled satoshi value.

Right now, there is little evidence that $SOV will benefit by accumulating $BOS or any other tokens launched by Sovryn unless Sovryn is selling those tokens for Bitcoin…

[matefri0]

I asked Grok to lay it out a hypothetical scenario based on Yago’s post. I believe this is a good starting point to try and get a deeper understanding. Feel free to point out any errors, although the point is to further the discussion, not get caught up by imaginary numbers.

Current Scenario:

Sovryn’s Token Holdings:

• BOS: 10,000,000 tokens (valued at $10 each) = $100,000,000
• Other Tokens:
  • Token A: 5,000,000 tokens (valued at $0.50 each) = $2,500,000
  • Token B: 2,000,000 tokens (valued at $2 each) = $4,000,000
• Total Net Asset Value (NAV): $106,500,000
• SOV Token:
  • Circulating Supply: 100,000,000 SOV
  • Current Market Price: $0.42 per SOV

SOV Token Yield:

Scenario: Sovryn decides to distribute BOS and other tokens over time as yield, based on Voting Power (VP).

• Example Distribution (Annual Basis):

  • BOS Yield: 2% of BOS holdings (200,000 tokens) distributed yearly.
  • Token A Yield: 0.5% of Token A holdings (25,000 tokens) distributed yearly.
  • Token B Yield: 0.5% of Token B holdings (10,000 tokens) distributed yearly.

• Effect on SOV Stakers: Yearly yield significantly boosts the value returned to SOV stakers, potentially increasing staking desirability and thus the demand for SOV.

SOV Burn/Token Release:

Scenario: An investor holding 1% of SOV (1,000,000 SOV) decides to burn these tokens.

• Token Release:
  • BOS Received: 1% of 10,000,000 BOS = 100,000 BOS
  • Token A Received: 1% of 5,000,000 Token A = 50,000 Token A
  • Token B Received: 1% of 2,000,000 Token B = 20,000 Token B
• Post-Burn Scenario:
  • New SOV Supply: 99,000,000 SOV (due to burning)
  • New SOV Price: If the market still values SOV at NAV, price would adjust to reflect the reduced supply:
  • New Market Price would be approximately $1.07576 per SOV if no other factors change ($106,500,000 / 99,000,000). However, since SOV is currently trading at $0.42, this reflects a significant discount to NAV or a market correction might be expected.

Premium Over NAV:

• Hypothetical Growth Scenario: if Sovryn adds more tokens or initiates new projects enhancing its ecosystem:
  • New Token C: Sovryn acquires 3,000,000 Token C (valued at $3 each) = $9,000,000
  • New Total NAV: $115,500,000
• Market Perception: with strategic moves and new projects, traders might see potential for SOV to outperform BOS:
  • If traders hedge with SOV, believing in its growth potential:
    Potential SOV Price: $1.155 per SOV (1x NAV) or higher if trading at a premium like MSTR at 2.5-3x, which could push SOV’s price to $2.8875 - $3.465.
• Premium Creation:
  • SOV might trade at $0.60 per SOV, giving a market cap of $60,000,000, which is about 0.52x NAV due to perceived future earnings, governance, and ecosystem growth, but still below its theoretical NAV value per SOV.

This scenario reflects how Sovryn could leverage its token holdings with an increased yield on BOS to enhance the value of SOV, aiming for a premium over its NAV through strategic management and growth initiatives.

[666SOV]

Sovryn should really accumulate Bitcoin instead of spend it.
and to pay devs, take a ZERO credit line and pay the devs with DLLR.
Put your money where your mouth is. use your own products.
from 2023 to 2024 sovryn SPENT arround 70 btc… and nothing new was built.

[yago]

This is an interesting idea, echoing what @SovOG156 said as well.

[TM1]

I still wonder why you @yago and other leaders choose to stay quiet on the SIP discussion while (ok I’m really just supposing:) voting it down.

…but you come up with an interesting approach basically hours later.
I believe this would have added a lot more to the SIP discussion and less now in the aftermaths.

[yago]

I thought of it after the vote. I had been thinking about it for a while, but it crystallized after the vote.

I didn’t want to get involved with the vote before that.

[Arthur]

My first post so I’ll keep it brief…

I’m not opposed to giving 100% of the BOS tokens to treasury.

I like the idea behind burn liquid Sov tokens for treasury tokens. It provides us with a floor price for Sov while giving liquid holders value for their tokens without increasing selling pressure on the market. It also makes our staked Sov more valuable.

This wasn’t in the original post but I also like the idea of converting a small portion of the treasury assets to bitcoin at specific intervals, maybe it’s buying one bitcoin a month or something. This could give us the mstr effect we’re looking for. If Sov was pegged to the treasury, it would definitely make Sov more valuable over time.

I’m also not opposed to receiving a portion of the treasury assets through time as yield, especially if we are constantly accumulating Bitcoin. Seems like a smart idea.

Finally, I like the idea of extending Sovryns runway into the future. We have BOS right around the corner which could present a lot of exciting opportunities. I think it makes sense to be as conservative as possible until we see where we go from here.

I voted for Sacros sip, but I could easily see myself supporting this idea if it were flushed out a little more.

[retarded.guru]

Guys don’t waste your time reading @yago bullshits

SOV is just a rug pull. At the beginning of 2024 BOS was in budget and roadmap of SOV. No new token, the value will go SOV stakers:

Community Call #60

Now it’s independent project, with independent funding and team with it own token (another grab money opportunity for the team).

He now pictures another beautiful dream of amazing future for SOV. Based on current narration (we will be second Saylor but better). We won’t.

He is just waiting for Gansler to resign to feel save about what he did here last year (rug pull SOV stakers by extracting BOS from project)

[sovrynday1]

maybe Yago should re-listen to this when he tries to argue that bitcoinOS always was intended as a independent project

so obvious that something changed in Q1 that also led to the price tanking of SOV from 2$ down to 0.3$

insiders knew BOS would not be launched by Sovryn and therefore all this selling happened.

It were also made possible by the BOB LP pools scamming users out of their BTC/ETH/USDT (users lost more 80% of their deposits $$$$ value)

[Hyde]

I don’t think that FISH is a part of Sovryn treasury at all.

[sovrynday1]

i also noticed how on the latest community call, YAGO was quick to stop FRENCH from letting the CC turn into a Q&A and instead started story telling for 30 minutes with no interruptions

as soon as the story telling came toward an end, and Q&A were about to begin he abruptly had to leave, for a more important meeting with BOS on twitter.

Then he posts on forums immidiatly after that we need a new CEO.