Sanctum LFG: building the infinite-LST future

Jupiter DAO LFG Introductions
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On governance, token utility, and LFG

I wanted to highlight a great question from NFTMODS on Discord:

After reading your intro I learned a lot about the accomplishments with LSTs and INF. There is a clear value and high potential adoption for what youre building, kudos!

I am curious as to how a DAO will participate in governing Sanctum? What is the proposition for a token and raise on LFG?

Why a token? Why now?

Two reasons:

  1. We are building critical infrastructure on Solana that will underwrite hundreds of billions of dollars in value. This is far too important to leave in the sole control of the team.

  2. What we’re building requires community buy-in. We are building an entire new future of Solana. We are forging a new meta, rewriting how liquid staking works on any chain – this is something that we absolutely cannot do without everyone’s help. We are building a three-sided marketplace of LST holders (demand side), LST creators (supply side), and liquidity providers (service side) – this is the hardest (but also most worthwhile) thing to build.

The purpose of a token has always been to distribute and align incentives, which perfectly aligns with the above two points. We want a significant chunk of the token to be in the hands of the community, so that if anything happens to the current team, the community can step in. We also want the community to have a significant share in the upside – we are building this awesome new future together, and those who help build it should be richly rewarded.

I’ll share something I’ve never shared on a public forum before. We were getting ready to launch our token in January 2022 with Socean. We had a ton of traction, and built out the entire IDO website – but I put the brake on it because I felt what we had built wasn’t compelling enough yet. We have been building non-stop since February 2021 and kept pivoting until we built something truly worthy of a token. This is it.

What will the token do? How will governance work?

Jupiter’s governance is amazing. I’ve taken three learnings away from it:

  1. Don’t decentralise everything right away; execute with a long time horizon. It was smart for Jupiter not to commit to any revenue share yet. The most important thing is to secure the long-term future of the protocol, because Jupiter is foundational infrastructure. Sanctum is similar. We’ve been building on liquid staking for three years, through the depths of the bear; we don’t have all the answers, but we know the space better and have a longer time horizon than 99.99% of tokenholders. First make sure we can build Sanctum out into a robust, well-capitalised public good that can survive and thrive in perpetuity.

  2. At the same time, give people something meaningful to do with their token. Governance is too often theater, and too often we’ve seen it devolve into pure bribing or gauges or silly staking games. If we do that, we are dead. That’s giving up on growth and moving towards a pure value extraction mindset. There is 100x more potential in the Sanctum token.
    In the infinite-LST future we will launch hundreds if not thousands of LSTs. But we have limited resources and attention. I want the community to vote on which ones they think will have the most potential, and then we will put all our resources into supporting these LSTs – a bit like Jupiter’s LFG. Every single one of these new LSTs could potentially unlock billions of dollars in value, so this is very impactful governance.

  3. Keep it simple. In the past it was all the rage to have complicated veCRV models. This is overcomplicated. Jupiter’s lockup schedule is simple and clean, 30 day linear unlock, very easy to understand. It’s a clear show of strength – no need to lock your token for 5 years, sell it if you want – we’re confident that what we’re building will stand the test of time.

We want to ensure long-term token health. Naked gauges, bribing, rushing to revshare, clever staking or locking mechanisms – these guarantee short term action, but also a slow death.

Decentralisation is not just a buzzword. We will eventually be larger than Lido so it’s important that we don’t end up the same way. Luckily, our model involves hundreds of different LSTs, not a single one. Eventually all of the infrastructure we build will be fully decentralised and owned by DAO, but this must be done carefully to avoid hostile takeovers.

Why LFG?

  1. To support Jupiter and the decentralised meta. We’ve known and worked with the Jupiter team very closely all the way since 2021. We are very happy to support this initiative.

  2. To give people a chance to get in on the ground floor. We’ve been approached by quite a few CEXes already and having spoken to many founders, many CEXes are predatory and often benefit from pumping and dumping the token. We absolutely do not want people to get dumped on. Jup LFG is a way for us to get the token to as many Solana natives as possible in an extremely retail-friendly way.

  3. To get our token into as many hands as possible, but the right ones. We are building something OPOS, something that will benefit all of Solana. LFG is Solana-native and the people here – you guys – are the people we want to bring onto the Sanctum community.

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