Sanctum Airdrop Analysis

Introduction

Liquid Staking Tokens (LST) have been one of the hottest topics on Solana. One of the reasons for this is because of Solana’s liquid staking layer -Sanctum.

Since its inception, Sanctum has rapidly established itself as a pivotal player in Solana’s DeFi ecosystem. The protocol has enabled greater liquidity and provided a robust safety net for DeFi protocols, particularly in borrow-lend scenarios.

With its integration into major platforms like Jupiter Exchange, Sanctum has not only facilitated the use of staked SOL in DeFi but has also introduced innovative solutions to maintain solvency across the network.

Some of its key metrics are below;

• Total Value Locked (TVL): $784.96 million as of September 17, 2024

• Market Cap: $61.18M
• Fully Diluted Validation (FDV): $339.91M
• Price: $0.3394 as of September 17, 2024

How did Sanctum achieve some metrics? Let’s look deeper

Explain me Sanctum like I’m 5

Sanctum works like a bank vault where people keep their SOL coins safe while earning rewards. But unlike a regular vault where you can’t use your coins until you take them out, Sanctum lets you use your SOL coins to buy and sell things in a special financial market without needing to wait. This helps keep everything running smoothly in the market, even when there are big changes happening.

Sanctum is created to make liquid staking on Ethereum safer and more decentralised. It helps reduce risks and avoids relying too much on one provider by spreading users’ Ethereum deposits across several liquid staking services. When users deposit their ETH into Sanctum, they get a Sanctum token that represents their share.

Airdrop Campaign Analysis

Our main focus would be on the Wonderland campaign Sanctum released before the launch of the $CLOUD token. Aside from the Wonderland campaign, other events were launched like the release of new LSTs and the launch of Sanctum Infinity which assisted in ensuring their goals of the governance token launch would be a success.

We’ll analyse the Wonderland campaign first then move to other events that were launched by Sanctum before going into the $CLOUD token launch. Let’s start by viewing an overview of the Wonderland campaign;

Wonderland Campaign

Sanctum Wonderland is a gamified campaign designed to encourage engagement with various liquid staking tokens (LSTs) on the Solana blockchain. Participants, called “Wonderers,” can own virtual pets associated with different LSTs. These pets earn Experience (EXP) based on the amount of LSTs held and other activities.

Overview

• Campaign name: Wonderland Season 1
• Campaign duration: April 29th 2024 to June 5th, 2024
• TVL rate: $305.57m to $1.014b (231.64% Increase)

Source: https://x.com/sanctumso/status/1784974391169655086

Campaign Summary and Rules

The goals of this wonderland campaign are;

1. The first is to increase user engagement with the Sanctum platform
2. Promote liquidity staking on the Solana network
3. Build a collaborative and growing community

Actions Related to Each Goal:

Based on those goals, let’s look at how Sanctum achieved them with the actions required by users during the campaign;

1. Increase User Engagement with the Sanctum Platform

Actions:

• Enrol in Wonderland: Users must connect their Solana wallets to the Sanctum platform and enrol in Wonderland to start earning rewards.
• Interact with Pets: Users hold LSTs to own and grow Pets, levelling them up by accumulating EXP.
• Participate in Community Quests: Users must regularly engage in quests and events, completing tasks and solving puzzles to unlock EXP Multipliers.

2. Promote Liquidity Staking on the Solana Network

Actions:

• Hold Liquid Staking Tokens (LSTs): To participate, users must hold at least 0.1 SOL worth of LSTs, which encourages users to stake more Solana tokens.
• Earn EXP for Holding LSTs: The more LSTs held, the faster users earn EXP for their Pets, promoting higher levels of staking.
• Explore Various LST Options: Users can stake LSTs in multiple available pools, such as Armada, Kamino, or Marginfi, diversifying the staking opportunities.

3. Build a Collaborative and Growing Community

Actions:

• Invite New Users via Referral Codes: Users share their referral codes with others to bring new participants into the platform. Both the referrer and referee benefit through EXP bonuses.
• Work Together in Community Quests: Quests are collective efforts that require collaboration to unlock multipliers, promoting teamwork and mutual rewards.
• Earn Referral EXP and Cupcakes: By referring others, users earn Referral EXP and can receive bonus rewards through Cupcakes, fostering ongoing engagement and community growth.

Now let’s look at the campaign rules in detail and see how it prompted those actions and achieved the goals;

Campaign Rules

Users are expected to join the campaign by connecting their Solana wallet and first purchasing LSTs using SOLs. Now unto more details of the campaign rules;

Pets and Experience (EXP)

• Owning a Pet: Pets are tied to specific LSTs. To own a Pet, you must hold at least 0.1 SOL of the corresponding LST. There are 18 pets to select from and the table below shows the breakdown;

• Earning EXP: From the table above, you’ll see the base rate is 10 EXP per minute for every 1 SOL worth of LST. For example, if you hold 3.5 SOL of LST, you earn 35 EXP per minute.
• Pet Levels: Pets level up as they gain EXP. The maximum level for a Pet is 999. Levelling up requires more EXP at higher levels.
• Pet Evolution: Pets can evolve after reaching specific levels, and each Pet can evolve up to 3 times.

EXP Multipliers

• What Are Multipliers?: EXP Multipliers boost your Pet’s EXP earnings for a limited time. These are temporary bonuses that don’t affect the base EXP rate.
• How to Get Multipliers: Multipliers are earned by completing Community Quests. The Pet that receives the Multiplier is tied to the specific quest.
• Duration: Multipliers are time-limited, lasting from 5 minutes to one week, depending on the quest.

Community Quests

• Types of Quests: There are two types of quests: task quests (community milestone achievements) and puzzle quests (solving puzzles with the community). Example of a community quest is in the image below:

• Quest Rewards: Rewards are distributed after a quest is completed. If a quest is not completed in the same week, it rolls over to the next week. An example of a completed quest (image below);

Referral EXP and Cupcakes

• Referral EXP: You earn 5% of the EXP earned by users who join using your referral code. This is called Referral EXP.
• Referral Cupcakes: For every 20,000 Referral EXP, you receive a Cupcake, which can be exchanged for bonus EXP at the end of Season 1.

These rules create an engaging experience where users work individually and collectively to earn rewards while progressing through different levels with their Pets.

Analysis

Before the start of the campaign, the TVL of Sanctum was $305.57m and it rose by 231.64% to $1.014b at the end of the campaign (images below).

One would notice from the chart that the TVL was already on the rise before the introduction of the Wonderland Campaign. That can be attributed to the launch of the new LSTs, one of the events by Sanctum, which we’d be looking into next.

Launch of New LSTs

On the 14th of March, 2024, Sanctum increased its capabilities for its users by releasing new Liquid Staking Tokens (LSTs) that can be seamlessly integrated into the Solana ecosystem.

These new LSTs allow projects to operate multiple validators under a single token, enhancing security and decentralization without confusing their stakers. With LSTs, users can quickly swap between any token and an LST (like USDC and xSOL) using platforms like Sanctum or Jupiter.

The process is instant and doesn’t require deactivating a stake account, waiting through an epoch, or remembering to claim your stake.

The new LSTs they introduced include:

• bonkSOL by Bonk
• compassSOL by Solana Compass
• cgntSOL by CogentCrypto
• dSOL by Drift
• jucySOL by JuicyStake
• laineSOL by Laine
• pwrSOL by Lode
• superSOL by Superfast

Sanctum chose to work with these projects because they are top-tier, with a proven track record of significant contributions to Solana. All of these LSTs will benefit from deep liquidity right from the start, thanks to Sanctum’s Reserve Pool, which holds over 200,000 SOL to support instant unstaking. This means you can always quickly convert your LST back to SOL whenever you need.

Analysis

Before the release of the new LSTs, this is what the transactions on Sanctum looked like

A closer look at the values

Then after the release of the new LSTs, notice that the LSTs deposited increased from 5 to 9;

Fast-forward 2 months later to May 2024, and the number of assets interacted with is above 20 (image below)

This new introduction of Liquid Staking Tokens (LSTs) not only expanded Sanctum’s offerings but has also played a crucial role in making it prepared for its airdrop governance launch.

Aside from the effect on Sanctum’s deposits, it also had a significant effect on the TVL of Sanctum;

At the release of the new LSTs, the TVL of Sanctum was $33.67m and it rose to $72.81m (March 25th 2024) before the Introduction of Sanctum Infinity.

Introduction of Infinity

Next was the introduction of Sanctum Infinity on the 25th of March, 2024.

Sanctum Infinity is a special type of liquidity pool that lets users swap between different Liquid Staking Tokens (LSTs).

Campaign Rules

If you want to contribute to this pool, you can do so by depositing any approved LST into the Infinity Pool. In return, you’ll receive INF tokens, which earn you rewards and a share of the trading fees from the pool.

Infinity is unique because it can support millions of different LSTs. It works by converting each LST into a stake account, allowing the pool to determine a fair price for every token based on the SOL (Solana’s token) in that account. This makes it easy to swap between any two LSTs, regardless of their size, without relying on complicated pricing formulas.

Infinity also aims to maximise returns for everyone involved by adjusting the trading fees for each LST based on its performance. The INF token itself is a liquid staking token, meaning it can be used directly in DeFi protocols. This allows all LSTs to tap into the liquidity of INF, whether they’re paired with USDC, SOL, or other LSTs. Then users can easily withdraw the INF to other listed tokens in Solana.

Take a look at the TVL of Sanctum before and after the launch of Sanctum Infinity (image below). Before the launch, the maximum TVL was $72.81m and then we noticed a three-fold increase to $304.66m within a month and then it continued to a peak of approximately $1B in less than 3 months (June 2024 — July 2024)

Also, notice how it correlates with the number of INF daily holders that got to a peak of approximately 200k daily holders between June and July 2024

$CLOUD (Sanctum Governance Token) Launch

Sanctum launched this token with the primary goal of distributing $CLOUD tokens to both early supporters and new users, incentivizing participation in the protocol’s governance and liquidity pools. The campaign was structured to reward long-term believers in Sanctum’s vision while also attracting a broader audience.

Overview

• Launch date: July 17, 2024
• Campaign allocation: 10% of total supply initially (100M $CLOUD tokens)
• FDV at launch/airdrop date: $305.5 million
• Total claimers: 41,229,340 claims from 108,185 profiles
• % claimed: 55.79%
• Average $CLOUD claimed per address: 408.54 $CLOUD per address
• Average dollars per address: $124.809 per address

Source: https://dune.com/queries/3925372/6605526

Campaign Rules

The $CLOUD campaign utilised categories and components designed to accommodate different types of participants. We’ll review the airdrop rules first

Airdrop Rules

From the image above, a total of 10% of the CLOUD tokens were distributed during the launch airdrop, with the distribution split as follows:

• Capital: 5% (or 50 million CLOUD tokens) were allocated for Capital.
• Earnestness: Another 5% (or 50 million CLOUD tokens) were awarded for Earnestness.

Here’s a breakdown of the rules for the airdrop allocations;

Capital Allocation

Token allocation for the Capital segment was based directly on participants’ share of the total Wonderland Season 1 Experience Points (EXP) (which we’ve gone into detail already in this article). Additionally, each Referral Cupcake provided a 20,000 EXP bonus.

This required participants to have registered for Wonderland and earned over 266,000 EXP to be eligible.

Earnestness Allocation

Allocation of tokens in this segment was done manually. The Sanctum team manually reviewed millions of posts across various platforms including Telegram, Discord, Twitter, websites, and YouTube. This particular Earnestness segment was beneficial to content creators and influencers on social media.

Sanctum had to set aside some tokens for earnest participants who missed setting up their Sanctum Profile on time.

Additional Rule

Dynamic Airdrop

Sanctum launched a Dynamic Airdrop feature that aims to reward users based on their level of commitment to holding the $CLOUD token. It is structured to provide more benefits to those who are willing to claim their tokens later rather than immediately:

Immediate Claim (Sanctum-Curious): Users who prefer liquidity and are not ready to commit long-term can claim their airdropped $CLOUD tokens immediately, without any bonuses.

Delayed Claim (Long-Term-Aligned):

• Capital Component: By waiting for 14 days to claim, users can receive a 100% bonus on this portion of their airdrop.
• Earnestness Component: This portion offers a 100% bonus for those who wait 180 days. Claiming earlier than this period results in reduced bonuses, catering to varying levels of commitment.

LFG (Liquidity For Governance) Rules

Sanctum had another 10% of the total supply (50M $CLOUD) available for LFG (Liquidity For Governance) (image below). With 5% going to what they call the “Alpha Vault”.

Let’s look at the rules around this LFG segment;

Alpha Vault

The Alpha Vault is a unique mechanism designed for participants who are deeply aligned with Sanctum’s long-term vision. It allows users to purchase $CLOUD tokens potentially at a discount before they are available on the open market. Here are the key features:

• Deposit: Participants can deposit USDC into the Alpha Vault during the specified window.
• Vesting: Tokens purchased through the Alpha Vault are subject to a vesting period of 6 months, emphasising long-term commitment.
• Pricing Dynamics: The price of $CLOUD starts low and may increase based on the total USDC deposited. If the cap is exceeded, excess funds are returned, ensuring fairness.

Analysis

The $CLOUD token had a total supply of 1,000,000,000 (1B) launched via airdrop and Liquidity For Good (LFG) launchpad. At launch, it had a circulating supply of 200,000,000 (200M).

Of this 200M, 20% of the total supply will be unlocked at launch. 10% (100M) will be given in the initial airdrop, split equally between Capital and Earnestness components.

According to Dune, 108,185 profiles (not wallets) were eligible for this drop with 41,229,340 claims, 14,555,684 forfeited which results in 55.79% of airdrop claimed (if you also add the forfeited tokens).

Participants had two options going into the airdrop, they could claim immediately or wait for bonuses:

• Capital: 100% bonus after 14 days
• Earnestness: 100% bonus after 180 days

From the data, we can see 20.9% was claimed by earnestness participants while 79.1% was claimed by capital participants.

The FDV at launch was $181,518,830. With a market cap of $41,564,486, that gives us a Market Cap / FDV score of 0.3.

Airdrop Results

What was the result of the airdrop and what did users gain? Let’s take a look;

$CLOUD Claimed per profile at airdrop

Let’s calculate what each address got on average from the token launch based on data from Dune;

Initial Token Allocation and Valuation

• Total $CLOUD Tokens Claimed: 44,198,004 tokens.
• Full Diluted Valuation (FDV) at Launch/Airdrop: $305.5 million.

Participation Details

• Total Eligible Profile: 108,185 profiles.

Claiming Statistics

• Percentage of Total Supply Claimed: 44,198,004 tokens divided by 100,000,000 total supply equals approximately 44.20%.
• 10% Airdrop allocation: 44.20 divided by 10 is 4.42%
• Total Value of Claimed Tokens: $305.5 million FDV multiplied by 4.42% equals approximately $13.502 million.

Averages Per Claiming Profile

• Average $CLOUD Claimed per Address: 44,198,004 tokens divided by 108,185 profiles equals approximately 408.54 tokens per claiming profile.
• Average Dollar Value per Address: $13.502 million divided by 108,185 profiles equals approximately $124.809 per claiming profile.

From the calculation, each profile claimed an average of about 408.54 $CLOUD tokens, corresponding to an approximate dollar value of $124.809.

ROI on $CLOUD Airdrop

Remember that to be eligible for capital allocation, users needed to have registered for Wonderland and earned over 266,000 EXP.

Calculation of Required LST Holding

To calculate the amount of SOL needed to earn 266,000 EXP within the campaign duration, we need to consider the rate of EXP earning and the duration for which this amount of SOL was held.

1. EXP Earning Rate: 10 EXP per minute per 1 SOL.
2. Duration of Campaign: From April 29, 2024, to June 5, 2024 (37 days = 53,280 minutes).

SOL Required to Earn at least 266,000 EXP

If a user holds 0.5 SOL from the beginning of the campaign, they’d finish with 266,140 EXP points, just enough to be eligible for the token allocation.

Cost Estimate

If we assume an SOL price of $130;

0.5 SOL x 130 = $65

From our previous calculation, we had reached an estimate of $124.809 per wallet address.

Therefore, the average ROI for a user that is eligible for the capital token allocation is;

ROI = ((124.809–66) / 66) * 100 = 89.103%

TVL Change

Same TVL: Following the airdrop, Sanctum’s Total Value Locked (TVL) remained fairly the same

From the graph, you can see the TVL only surged after the Infinity went live and has fluctuated roughly ever since.

Community Feedback

Now let’s see what the community said about the $CLOUD drop. Some praised not just the airdrop returns but the protocol itself. While some were not happy with their returns.

First the positive feedback from the community;

Then we check the negative feedback;

Conclusion

In summary, Sanctum has quickly become an important part of Solana’s DeFi world by making it easier for people to use their staked SOL in new and flexible ways judging from the increased TVL and number of deposits in its new LSTs.

With the launch of the $CLOUD token, Sanctum encouraged both short-term and long-term involvement from its community, which helped keep its Total Value Locked (TVL) stable and growing.

The community’s response was tied between those happy with their $CLOUD tokens and those who expected the value at launch to be higher.

Looking ahead, Sanctum is preparing to launch a season 2 campaign, and this time we hope it’ll live up to its expectations.

References

• https://defillama.com/protocol/sanctum#information
• https://www.coingecko.com/en/coins/cloud
• https://x.com/sanctumso/status/1784974391169655086
• https://x.com/sanctumso/status/1788532939321426258
• https://x.com/Crypto_Minion/status/1788847977089429587
• https://app.sanctum.so/infinity
• https://dune.com/queries/3761588/6326521
• https://dune.com/raccoonrich/inf-holder-analysis-sanctum
• https://dune.com/queries/3925372/6605526
• https://learn.sanctum.so/blog/the-final-cloud-airdrop-post
• https://learn.sanctum.so/blog/cloud-survival-guide
• https://learn.sanctum.so/blog/cloud-the-sanctum-governance-token
• https://x.com/SolBeachBum/status/1798383843780809072
• https://x.com/Crypto_Minion/status/1829212239234248786
• https://x.com/Pat2DopeTho/status/1813967119870210402
• https://x.com/bellavipNinfeta/status/1814026458274443313
• https://x.com/Invictusnftart/status/1814076175741755769
• https://x.com/GSayer99/status/1814004603459174756

Disclaimer:

The information provided in this article is for informational purposes only and reflects the research and opinions of One Click Labs. It should not be considered financial, legal, or investment advice. Airdrop participation involves risks, including potential loss of funds, and readers are encouraged to conduct their own due diligence. One Click Labs does not endorse or guarantee the success of any project mentioned and is not liable for any losses incurred due to airdrop participation or reliance on the information provided.