Strata Social Tokens
unlock local economies around individuals while Strata Collectives make it possible to pool resources and structure incentive models around networks of social tokens. The combination of these composable token mechanisms will fuel not only the Creator Economy, but will unlock a new Cooperation Economy that compounds the value of social token networks. Strata has the potential to upend entrenched, royalty-seeking business models which have taxed creators for decades and unlock a wider design space for social tokens.
As builders, we strive to make history even when the market is bearish. Genopets helped us make history by raising over $1.8 million dollars using our Liquidity Bootstrapping Curve (LBC) for their KI Token launch. We joined forces with the Genopets team to support the launch of their KI token using Solana’s first permissionless liquidity bootstrapping protocol, the Strata Liquidity Bootstrapping Curve.
Through this liquidity bootstrapping, Genopets were able to create some of the deepest liquidity for their holders on Orca. The project did not collect any funds from this raise, rather, they used the funds to ensure that KI holders could continue trading the token for the foreseeable future. We hope to see many other projects adopting this model to supply liquidity to their holders.
Genopets is a project that is familiar with making history. They are the world’s first move-to-earn NFT game. Genopets offers a unique mobile RPG experience with an evolving spirit animal NFT personalized to you. You can battle your pets with friends to earn KI Tokens. These KI Tokens are the all-important in-game utility token for the Genoverse. They can be used for crafting, refining, and terraforming.
Genopets sold out their KI token with nearly 7 hours remaining on their LBC. With no bots or clickfarms, the Genopets team was able to bootstrap liquidity while giving their community a fair price.
From the outset of the three day launch, there were a good volume of transactions. In the beginning, this demand failed to match the falling price of the LBC. This is standard in an auction, as the price is meant to fall to the fair price.
The auction started at a price of $0.50 cents, accompanied by a gradual fall to between $0.07 and $0.11. In the graph below, you can see the moment the fair price range was discovered. After about 2 days, demand started to match the fall in price, and in the graph below, you can see the demand spiked when participants saw a great price.
We would like to congratulate our friends at Genopets on a smooth and successful sellout of the KI Token, as well as the Genopets community for their new KI tokens! We also love the phenomenal custom UI skin the team created for their LBC launch. This custom skin demonstrates the ability to customize the underlying components of Strata to fit your needs.
We look forward to making more blockchain history, and seeing the new ground that the Genopets team is sure to break. If you wish to launch a token or an NFT project with Dynamic Pricing, you can use our launchpad at app.strataprotocol.com. If you need any assistance feel free to hop into our discord and we’ll help you set it up.
Since the days of yore (read: 1 year ago), minting NFTs on Solana has been done with a fixed price. NFT Collections set a supply and a price, and hope that they sell out. When the SOL community was small, this methodology worked well. With increasing attention, mispriced mints have led to headaches for everyone involved and the network itself.
An overpriced mint will not sell out, forcing projects to cut their collections short. An underpriced mint invites hoards of bots that can clog, and in extreme cases stop, the Solana network. Add to this situation that projects are now being listed on exchanges during the mint, and you have a recipe for disaster. Price discovery is happening anyway, and the profits are going entirely to flippers and bots.
The solution: Dynamic Pricing. By partnering with Metaplex, we are pushing price discovery to be the new default for public mints. While whitelist mints can still be fixed price, price discovery is a necessity for public mints. Price discovery during the mint means that there is no advantage to spamming transactions or clicking “mint” before someone else. During a Dynamic Pricing Mint, the price floats according to supply and demand. As a minter, you decide what price you are willing to enter. As a creator, the proceeds of the price discovery help fund the project instead of short-term flippers.
How does Dynamic Pricing work?
Imagine you are auctioning an item, but you do not know what it is worth. A good auctioneer will first establish a baseline price, then let participants bid the price up. The price starts high, falls until someone bids, then rises with every bid. For example, if we were auctioning a grill, the auctioneer may start the price at $1000. Then $500. Then $200, where someone makes a bid. From there, the price may be increased through bidding to $350.
How can this work with an NFT collection instead of a single item? The Strata Protocol LBC (Liquidity Bootstrapping Curve) does this by setting a starting price that falls over time and increases with each purchase.
As an example, let’s take a look at the Divine Dogs Dynamic Pricing mint. Based on previous mints, the team estimated that the collection would sell out completely for somewhere between 2 and 2.5 SOL. Thus, they set a starting price of 3.3 SOL and a minimum price of 1.1 SOL. The plot below is the actual sales history of the mint.
The Strata + Metaplex Partnership
We’re huge fans of Metaplex and already built a way to create dynamic pricing mints on Metaplex Candymachines, but the experience is far from seamless.
The goal of this partnership is to drastically lower the barrier to entry to dynamic pricing mints, hopefully making the LBC mint mechanism a default for creators, collectors, and the Solana Network at large. The partnership will support deep, native integration in Metaplex including updates to the metaplex CLI and documentation that make dynamic pricing the default for public mints. Metaplex believes, as do we, that dynamic mints are ultimately better for creators, collectors, and the Solana Network.
Better for Creators,Collectors, & Solana
The dynamic pricing model is more equitable for both creator and collectors.
Using this mint method collectors have a fairer chance to mint, the community incentivises collectors that are long-term holders vs. short-term flippers, and creators usually end up raising more money through effective, community-driven price discovery.
A Fair Chance to Mint
During a fixed price mint, the average collector does not stand a chance at minting a NFT. Professional scalpers deploy bots that submit millions of transactions while the average retail collector can usually only submit a handful. Even with anti-botting strategies, click farms stand a far better chance at minting NFTs than the intended minters.
With dynamic pricing, every mint participant has a fair chance to mint at a price they deem fair. This is a step-function improvement in inclusion and accessibility for mints that radically expands participation from the hands of the elite few to a true-fan community of many.
Disincentivize NFT Scalpers
A classic NFT mint works a lot like concert ticket sales. Scalpers take the majority of the tickets and resell them to true fans, who are forced to pay a premium. The artist sees none of those profits.
With NFT communities, this situation is even worse because, in addition to creators getting harmed, the Solana Network is also spammed by bots and flippers trying to make a quick score. An NFT community seeks long term holders. True believers that want to see the project succeed long term. The Strata LBC combined with Metaplex makes it easy to disincentivize NFT scalpers and incentivize long-term community members.
Creators Can Earn More
Creators have the potential to earn more using Strata’s Dynamic Mints in Metaplex. Creators do the heavy lift to bootstrap communities, and we think they should be rewarded for it — but not at the expense of the community.
Since the money that would be going to bots is now going to the creators, projects will have a better chance to achieve their funding goals — from a more qualified community base.
This should, in theory, make projects more likely to succeed by aligning the interests of creators and collectors.
Better for Solana
At the end of the day, minters are not the only victims of botters. Botting is clogging the network and will continue to do so unless something changes.
Botters take advantage of the fact that mints are first-come-first-serve at a discount price. They submit millions of transactions so they have a better chance of being selected to receive the discount. With a dynamic pricing mint, this kind of behavior would only drive up the price and hurt the bots. As a result, bots are disincentives to participate, which improves the performance of the Solana Network for everyone.
Solana Composability vs Ethereum Composability
A major tenant of blockchain architecture is composability. By sharing state, dApps can create rich interactions that are not isolated to a single walled garden. A token can have uses throughout the ecosystem, not just in a single application.
Solana and Ethereum take vastly different approaches to this problem. In this post, we’ll explore the composability patterns on both and the consequences of these design choices.
A smart contract (in this case, a single token), resides at a particular address. Both the data and execution logic for that token are stored at that address. For example, the data to find all holders is available at that particular address.
Solana Composability looks a lot more like Functional Programming (FP). The execution logic for a smart contract (on Solana, called a program) exists separately from the state.
With Solana, data is still stored in accounts, but all of the data for a given program is distributed across multiple accounts. Every account in Solana is owned by a Program. If this were a SQL database, you could get all of the state for a given program by running:
Where is a Solana program stored? The compiled code is also stored on accounts. The Solana runtime knows how to execute the binary for these special accounts. You can think of a program call as a function execution over some state.
Solana Composability — Inheritance
Solana Program calls depend on the arity and ordering of account arguments. Making matters more complicated, every account used by an instruction must be passed to the instruction.
The upshot: If my implementation of a function requires more or different accounts than yours, they are incompatible. This makes inheritance difficult to impossible.
Solana Composability — State as an Interface
With Solana, the State is the interface. Composition can be broken down into systems of state and actions on that state. What does this mean? If Program A wants to interact with Program B, it can either
Directly call Program B
Write State that is expected by Program B
The latter has massive implications for composability. Instead of needing to agree on an action based interface, Solana programs can agree on intermediary state. Tokens are the most common form of state.
Program A gives the user token A
Program B lets the user exchange token A for NFT C
In Solana, Program B is blissfully unaware of Program A. In Ethereum, program B would need a reference to the token program of A.
Composability Example — Solana vs Ethereum
Let’s say you want to mint an NFT such that the price increases for every NFT purchased. The De-Facto way to mint a collection on Solana is the CandyMachine.
The problem: The CandyMachine takes a fixed price in either SOL or any SPL token.
On Ethereum, you may extend the interface of the CandyMachine contract and add your pricing logic. On Solana, you could do similar — fork the candymachine and upload your own program. We’re devs, and code duplication is bad! Instead, we can string two programs together!
To achieve this, we can tie a Strata Bonding Curve to a Metaplex Candymachine. A Strata Bonding Curve allows you to create a pricing system such that every new token minted is more expensive than the one before it.
The integration is straightforward:
Step 1. Create a bonding curve with desired pricing characteristics that lets users buy Token A
Step 2. Create a CandyMachine whose price is 1 Token A
At minting time, the minting UI:
Uses SOL to purchase a Mint Token, Token A
Uses Token A to mint an NFT from the CandyMachine.
The intermediary state between Strata and Metaplex is Token A. Importantly, neither the Strata nor Metaplex contracts know about each other.
Solana vs Ethereum Composability — Consequences
Neither composition strategy is inherently better. As you will find with FP vs OOP, there are plenty of flame wars arguing which is better. There are, however, notable tradeoffs.
Tradeoffs — Speed
Solana’s programming model lends itself to massive amounts of parallelization. Because every piece of state is identified as read-only or writable, the Solana Sealevel runtime is able to run many transactions in parallel knowing that they will not interfere with each other. This is a core tenant of Solana, and why it has a much higher TPS than Ethereum.
Tradeoffs — UI Compatability
Ethereum’s interface model makes it easy for one UI to integrate with multiple smart contracts implementing the same interface. This makes forking considerably easier on Ethereum than it is on Solana. Example: On Ethereum, if you fork Uniswap and match the interface, you will have out-of-the-box support in multiple user interfaces. On Solana, you would only have support if you did not add any accounts to the function signatures. Solana user interfaces tend to be heavily coupled to particular smart contracts.
Tradeoffs — Open Source
Neither Ethereum nor Solana has contracts that are open source by default. However, Solana has a good amount of closed source contracts that hinder composability. It is much harder to compose with something when you can’t see the code. That being said, there is a strong culture of open source within Solana that is actively pushing for contracts to be open. Strata is, and will always be, open source.
Tradeoffs — Program Proliferation vs State Proliferation
Ethereum’s model leads to a lot more programs and a lot more bespoke code running on chain. This makes it way easier to override behavior (for example, taking fees on token transfers). On Ethereum, forking is easy and encouraged.
Solana’s model leads to a lot more state, and programs that act as state changing primitives. This makes it preferable to create chains of logic where generalized contracts interact with other generalized contracts. On Solana, forking adds complexity for any UI-only dApps. This causes a push for well-thought-out battle-tested contracts, like the Metaplex Token Metadata Standard.
Tradeoffs — Complexity
Solana tends to be more complex from a planning and architecture standpoint. You need to think hard about the state you’re outputting, and how it can be used in other contracts. Stringing contracts together can be painful if this is done incorrectly.
With Ethereum, as long as you have a reasonable interface you can get away with ugly state.
Strata — Composability First
The future of Solana is chains of primitives working together. We can model tokens, and systems of tokens, using various primitives like Bonding Curves, Fanout Wallets, CandyMachines, Governance, and Multisigs.
How to Create a Solana Token on Strata
In this article, we’ll cover how to create a Solana token on Strata. Launching your own Solana token can be daunting. There are a lot of considerations, and we’ll try to cover those as well.
First, what does it mean to “Create” a token? Creating a Solana token tends to come in 3 steps:
1.Creating the token. How do you actually create a Solana token that will show up in wallets like Phantom, Slope, and Solflare?
2.Distribution. How do you get this token out to the community? How do you sell an initial supply to your community?
3.Liquidity. How does your community continually have the ability to buy and sell this token?
How to Create a Solana Token Easy Mode — Fully Managed Tokens
Let’s say you do not want to worry about steps 1 through 3. You just want a token that people can buy and sell right now. When users put SOL in, they get the token out. You will not manage the token supply or pricing, and will instead take a royalty on sales (similar to an NFT). If you would like to create a token where you manage your own supply, you can skip to Creating a Token
For this article, I’m going to create a Solana Token called NOAH. Since it’s a small token, there’s no guarantee that there will be a counterparty to any trades. Instead, by using a Strata Fully Managed token, the protocol will be the counterparty to every trade.
How to Create a Solana Token — Self Managed Tokens
A self managed token is one where you decide the supply, and have full control over distribution. You will want to think about who should have this token, how it gets distributed, and the percentages/amounts for each party. You can see an example of this kind of workup here
Step 1: How to Create a Solana Token — Creating the Token
This is the easiest part. Head over to the Strata Launchpad and select Create a Token
Click Create Token. Strata will create the token and you should be able to see it in your wallet.
Step 2: How to Create a Solana Token — Distribution
You have a token in your wallet, but how do you distribute it? You can send the token to people using your wallet, but what if you want to sell the token? This is called “Liquidity Bootstrapping.” In the previous step, you will have been greeted with a screen like this. If not, you can get to this screen by clicking “Sell a Token” on the launchpad.
Here, you have a choice. Do you want to sell the token with price discovery or for a fixed price?
If you expect the token to be in high demand, this is the best option. This option lets the market and your community decide on a fair price for the token. This uses the Strata Liquidity Bootstrapping Curve (LBC), which is similar to an LBP on Ethereum. The protocol will sell the token using a process similar to a dutch auction. The price will fall over time, and increase with every purchase. This creates a price discovery, which you can read more on here.
When selling a token with price discovery, the price will float throughout the launch period. You can control the following settings
Starting Price — The starting price when the LBC launches. The price will drop quickly in the beginning and more slowly as time goes on. We suggest you set this price at the highest price you expect the token to sell for. This is not the maximum price. If the token is in high demand, it could sell for an average price higher than the starting price.
Minimum Price — The absolute minimum price you would like to accept for these tokens. The price will never fall below this threshold. A minimum price that is too high may mean that the token does not sell out. This price should be within 5x of the starting price. If the starting price is 5 SOL, the minimum price should not be less than 1 SOL. The larger the difference, the faster the price will need to drop.
Number of Tokens — How many tokens do you want to sell in this LBC?
Interval — How long should this LBC go on for (in seconds)? This period is the time during which the price will fall. We recommend you set this period long enough so that everyone gets a chance to participate. Windows less than 15 minutes (900 seconds) are not recommended.
Launch Date — When should the LBC start?
This option sells your token for a fixed price to anyone who visits the sales page. While this leads to predictable liquidity, it is also vulnerable to bots looking to buy your token and flip it on a secondary market. As a general rule of thumb, if your token is in high demand and you expect the fixed price to be less than the aftermarket price, you should use Price Discovery.
Step 3: How to Create a Solana Token — Liquidity
Now you have both your token and SOL in your wallet. Your community has tokens which they have purchased. How do you enable trading on this token?
The best way to enable trading is via an Automated Market Maker (AMM). The most common form of this is a Swap (think Uniswap). On Solana, you have a lot of options when it comes to swaps. We will do a more in-depth post on this step later, but for now you can look at several different options with some of the features:
Soon to be open source
Provides liquidity to a Serum order book
Provides liquidity to a Serum order book
Let’s say you bootstrapped $200,000 in liquidity with a finishing price of $0.50 per token. After the liquidity bootstrapping is finished, you could go create a pool on any of these services with:
200,000 Your token
This will start the price of the pool out at $0.50 with $100k in liquidity. You can then invite your community to provide additional liquidity on this pool.
How Blockasset is using Strata to launch Athlete Tokens
What is Blockasset?
Blockasset is a platform on Solana for verified athlete tokens and NFTs. They specialize in social crypto assets for athletes. Athlete tokens on blockasset are a new p2p economy that rewards community engagement and early adopters. Blockasset is pushing the bounds of fan engagement in the sporting world.
Let’s take a closer look at these Athlete Tokens, how they work, and how you can get your hands on one.
What is an Athlete Token?
An athlete token is a subset of social tokens. Owning a social token is like joining a fan club. It gives you access to exclusive content, and can be exchanged for priceless experiences. For example, these athlete tokens will give access to training sessions, VIP sporting event tickets, signed merchandise and more. While an athlete token could increase in value, they are not an investment or security. Instead, the primary use of an athlete token is to be consumed.
The value of an athlete token is related to the power of the community behind them.
$BLOCK is the token of blockasset. You'll use this token to interact with everything in the Blockasset ecosystem, including to purchase these athlete tokens.
How does it work?
Blockasset is using Strata Protocol to do permissionless launches of their athlete tokens so they are immediately tradable. No need for market makers or LPs. Strata seamlessly handles the supply and liquidity.
While this sounds complex, from a fan perspective it’s as easy as clicking “buy”.
tl;dr: The price of the token goes up as tokens are purchased and down as tokens are sold, following a mathematical curve
The best way to visualize this process is with poker chips. Imagine there is a cash register. When you put dollars into the register, the cashier gives you chips (tokens). When you return the tokens, the cashier gives you dollars back. When you give Strata Protocol $BLOCK, it gives you Athlete tokens. When you sell them back to the protocol, it gives you $BLOCK. The more of the athlete token in circulation, the more $BLOCK it costs to purchase a token and the more $BLOCK you receive by selling tokens.
If the price of a token is related to the number of tokens in circulation, how does burning tokens raise the price?
In a typical sell operation, your athlete tokens are burned in exchange for $BLOCKtokens. This means that both the supply goes down and the amount of $BLOCK in the cash register. What happens if you don't take any block from the cash register? This should make all existing athlete tokens worth more $BLOCK.
When athlete tokens are burned for experiences, all circulating athlete tokens are backed by more $BLOCK. This leads to several innovative tokenomics models.
Royalties and NFT Holders
When an athlete token is purchased, a percentage of the sale is taken in royalties. This functions similar to NFTs, where a percentage of each sale is sent to the creator. The blockasset team will be routing a portion of these royalties to the athlete, and a portion of the royalties to NFT holders based on rarity. This means that NFT holders will accumulate athlete tokens which they can exchange for experiences.
The Fair Launch Window
When an athlete token launches, the price will be fixed for 30 minutes. After 30 minutes, the athlete token will gradually transform from fixed price to a square root curve. This results in upward price pressure with increased price sensitivity.
What is the Open Collective?
The Open Collective
If you’re not familiar with Strata, you can read more about the protocol here
A collective is for like minded creators that want to pool resources and bond their directional success to others.
Collectives also allow fans to take directional positions on the success of groups or categories rather than individuals alone.Viewed through this lens, collectives can be seen as idea indices.
The Open Collective (OPEN) is the default collective on Strata.When a token is created without a collective or base mint specified, the default is to place that token into the Open Collective.The Open Collective also takes no fees or royalties.
The Open Collective is truly decentralized. We, the Strata Team, get no cut of the OPEN token. We believe that taking a cut would stifle innovation.
Anatomy of the Open Collective
Token. This is the OPEN token. Every member of the collective will be bonded to it via a Bonding Curve
Bonding curve. Users can quickly purchase OPEN tokens using the SOL/OPEN bonding curve.The price is a function of the current supply.
Royalties. OPEN has no royalties on buy/sell through the bonding curve.
Exclusivity.The OPEN collective allows anyone to bind their token to OPEN and join the collective.It does not require sign off for new members
Limited royalties on sell: Users cannot set sell royalties unreasonably high, devaluing the token.
Unclaimed Token Settings
Social Token royalties on buy: 5%
All royalties are owned by the person who claims this token
Why buy OPEN?
Applications like Wum.bo use the Open Collective to make it possible to create tokens in one-click for users that have yet to join the platform.
As Wum.bo expands, OPEN-based tokens will be created for a variety of social media accounts, including Twitter.
Ultimately, the decision to buy OPEN is an investment in the community that will form around the Open Collective.It is backing every creator and unclaimed token that is based on the Open Collective.
The OPEN collective takes no fees.This means that, while you are still exposed to risk in fluctuating price, it costs nothing but the Solana transaction fees to get OPEN tokens.
This also makes the open collective a good choice for a creator that wants a social token, as there is no middle-man taking a cut.
The hope is that the Open Collective pushes future collectives to innovate. If a collective is going to pool resources in the form of royalties, it should offer something in return.That might mean building a website, setting up a storefront, or just riding on the network effects of a strong collective.
Creators can use the Open Collective to join an existing, established network.As the network of open collective improves its value, the value of every individual social token in the network is improved.
The Open Collective limits royalties on token sales.This keeps the authority on a token from completely devaluing the token for all holders.While OPEN tokens do still carry risk, the risk is in token holders selling and not necessarily changes from the authority.
The Open Collective ensures that all unclaimed tokens follow a similar, fairly shaped bonding curve.It also ensures that royalties are set aside to incentivize the token’s owner to claim the token.
Buying OPEN will allow you to buy the social tokens of anyone within the open collective
OPEN is just one of many collectives that will form on Strata.It has a distinct advantage in that it is the default collective, but it is also not being managed as an organization.
No royalties means that the Open Collective has no treasury.The Open Collective is not an organization. It will not provide services because it does not have funds to do so.
Members of the collective may choose to provide services because they are incentive aligned with the Open Collective.
Neither the Wum.bo team nor the Strata team own, or are taking any share of the Open Collective. As such, the Open Collective is not backed by a team.While the community that forms around the Open Collective will drive it forward because of the incentive alignment; there is no core team.
OPEN is a truly decentralized utility token.
OPEN in no way represents ownership in Strata or Wum.bo
The teams of both Strata and Wum.bo want to see the Open Collective succeed because they want to see the entire protocol succeed. They want to drive value into this newly forming economy.Neither team, however, will ever pick sides or choose winners amongst collectives.
While not currently supported, the goal is to allow free movement of ones token from one collective to another.This ability may hurt or help the open collective.This will lead to higher competition between collectives.This could either drive users back to the Open Collective, if other Collectives fail to deliver.Or it could drive users away from the Open Collective, as other collectives that take royalties provide greater utility.