Sanctum Research Report: A New Paradigm for Liquid Staking

In our previous research, we explored how liquid staking changes asset management in proof-of-stake networks. The liquid staking technology issues liquid staking tokens (LSTs) that represent the staked amount and accumulated rewards. Notably, Solana's staking rate exceeds 70%, much higher than Ethereum's 27%. However, LSTs only account for 6% of Solana's staking supply, while Ethereum exceeds 40%, presenting a significant market opportunity for Sanctum within the Solana ecosystem.

This article will focus on the recent token issuance of Sanctum, the success of Alpha Vault, token economics, key DeFi partner integrations and listings, the growth of LSTs, and their adoption in traditional finance.

Token Economics

Sanctum adopts a dual-token system to support its ecosystem. Infinity Pool serves as a multi-LST liquidity pool, allowing swaps between all LSTs within the pool. Users can become liquidity providers by depositing whitelisted LSTs, earning $INF tokens, which can accumulate stake rewards, benefit from trading fees, and be used in DeFi protocols.

On the other hand, the governance token $CLOUD controls the capital and attention within the ecosystem. Partners need to stake $CLOUD to qualify for the Sanctum Verified Partner (SVP) program, while $CLOUD holders vote to decide the acceptance of partners.

The total supply of $CLOUD tokens is 1 billion, distributed as follows:

• Launch Liquidity (20%):10% for the first airdrop, 10% for launching liquidity
• Community Reserve (30%): Managed by the community, used for growth plans.
• Strategic Reserve (11%): for ecosystem growth and partnerships
• Team (25%): Allocated to founders and core contributors
• Investor(13%)
• Jupiter LFG(1%)

Token Issuance and Airdrop

The Sanctum airdrop took place on July 18, distributing 10% of the CLOUD tokens, with 5% allocated to the capital portion and 5% allocated to the honest portion. A total of 108,185 accounts were eligible for the airdrop.

Participants can choose the "long-term alignment" method to receive greater rewards over time, or the "Sanctum curiosity" method to receive tokens immediately. To receive the full reward for the capital portion, a wait of 14 days is required, while the honest portion requires a wait of 180 days.

The community's reaction to the airdrop has been less than satisfactory, with some large $SOL holders feeling it is unfair. The team acknowledged that they missed some deserving users and promised to conduct more careful reviews in the future.

As of July 24, 12.44 million CLOUD tokens have been claimed, accounting for 24.24% of the total allocation.

On the same day, Sanctum minted 1 billion CLOUD tokens, allocating them to the team and community cold wallet at a 60/40 split. 250 million tokens are allocated for liquidity, with 100 million launched through the Meteora DLMM pool. The available tokens in the first year reach 300 million, with a maximum of 125 million initially circulating.

Alpha Vault Success

Alpha Vault allows long-term supporters to purchase $CLOUD tokens at a discounted price, but there is a 6-month lock-up period. The vault cap is 50 million CLOUD, with a maximum purchase amount of 7.5 million USDC. The starting price of CLOUD is determined by the amount of USDC in the vault, ranging from $0.001 to $0.5.

Alpha Vault was oversubscribed by 416%, demonstrating strong interest and confidence in Sanctum.

Future Outlook

Exchange listing and DeFi integration

$CLOUD has been listed on major exchanges such as Kraken, Bybit, and Bitget, enhancing liquidity and accessibility. Collaboration with DeFi platforms like Kamino, Drift, Texture, and Orca further expands the Sanctum ecosystem.

Sanctum Launchpad

The Sanctum plan aims to create a Launchpad that supports new projects and innovative products within the community. This will utilize LSTs to fund groundbreaking projects and support businesses adopting crypto-native frameworks.

Sanctum Profiles V2

The upcoming Profiles V2 aims to redefine the concept of identity within Sanctum. Users will be able to create their own LSTs, monetize their activities, and reward followers with unique content.

Sanctum Pay

Sanctum is collaborating with BasedApp to develop the first debit card supported by LST. This will allow users to make purchases without liquidating SOL, managing transactions directly through the debit card.

Summary

Sanctum provides an innovative solution to the liquidity issues of traditional staking, significantly enhancing the utility of staked assets. With the TVL approaching $1 billion, Sanctum has integrated with multiple platforms and is expected to attract more users.

Considering these factors, Sanctum's $CLOUD token (market cap of $53 million, FDV of less than $300 million) is worth attention. However, the competition in the Solana DeFi space is fierce, and Sanctum needs to continue innovating to maintain its lead.

Please note that this research report is for reference only and does not constitute investment advice.