Deep Dive | Valkyrie Protocol
Valkyrie is one of the most unique protocols in the Terra ecosystem. It aims to solve the inefficiencies in the current referral marketing industry which has led to increased costs for campaign creators and reduced rewards for participants.
Referral marketing in this context consists of a marketing scheme that revolves around incentivizing customers to share it with their network. While this use case could be expanded to influencers, content creators, and artists, Valkyrie will start out by helping other protocols onboard new users.
How it works
At its core, Valkyrie consists of a few participants:
- Campaign Creators: create campaign to incentivize certain actions.
- Campaign Participants: completes actions in campaign to receive reward.
- Campaign Referrers: share campaign to receive reward.
In order to create a campaign, the campaign creator first needs to decide which action to incentivize, the campaign budget, and the rewards schemes.
For example, Anchor Protocol creates a campaign to incentivize more users to deposit into Anchor Earn with a “participation reward” of 10 ANC and a “share reward” of [50,30] VKR.
This means if a participant completes the action of “depositing into Anchor Earn” they would earn the “participation reward” of 10 ANC. If they shared the campaign and other participants completed the action based on that, then they are eligible for the “share reward 1” of 50 VKR tokens. If another chain of participants completes the action based on the already shared campaign, then the original participant is eligible for “share reward 2” of 30 VKR tokens.
How it would look if you were the following participants:
Participant A (10 ANC + 150 VKR + 90 VKR):
- Receive 10 ANC for depositing into Anchor Earn.
- Receive 150 VKR from “Share Reward 1” because Participant A shared the campaign and Participants B, C, and D also deposited into Anchor Earn.
- Receive 90 VKR from “Share Reward 2” because Participants B and D also shared the campaign and Participants E, F, and G deposited into Anchor Earn.
Participant B (10 ANC + 100 VKR):
- Receive 10 ANC for depositing into Anchor Earn.
- Receive 100 VKR from “Share Reward 1” because Participant B shared the campaign and Participants E and F also deposited into Anchor Earn.
It’s important to note that these cascading referrals are limited to 3 layers. For example, Participant A would not receive any additional “Share Rewards” if Participant E, F, or G shared the campaign and other participants successfully deposited into Anchor Earn.
VKR Token
The main goal of the VKR token is governance. By staking VKR, users will be able to participate in governance polls or start a new proposal.
Value Accrual
The VKR token also captures value in several ways:
- In order to create a campaign, a campaign deposit is required in the form of VKR tokens.
- 20% of the value in the campaign reward pool needs to be in the form of VKR tokens.
- Campaign participants are capped at a pre-determined limit as to how many referral rewards they could receive. In order to raise the limit, participants need to stake more VKR.
- Protocol fees are used to buy back VKR tokens and distributed to VKR stakers.
Of all the value accrual mechanisms, the first three are directly correlated to the number of campaigns being created on Valkyrie. This means as more campaigns are being created, there is more buying pressure for VKR tokens.
Token Supply and Distribution
There is a total supply of 1 billion VKR tokens that will be distributed over the span of four years. The ways in which they are distributed are in the graphic below.
Genesis Distribution
At genesis, a total of 350M VKR tokens will be released. This will consist of LUNA genesis airdrop (50M), Community Fund (200M), and Foundation (100M).
Final Token Distribution
The details of each allocation are provided in the Valkyrie Docs.
Link: https://docs.valkyrieprotocol.com/protocol/valkyrie-token#final-token-distribution
Team
Valkyrie’s team consists of 10+ people who are mainly entrepreneurs in residents (EIR) for TerraForm Labs (TFL). At the core, the team consists of Leo Lee who is the founder of Valkyrie, Ryan Jang who is the VP of business development, and BC Chang who is in charge of Global Business. Due to the team’s close relation with TFL, this project is also being advised by them.
IDO Process (Pylon Gateway)
The VKR token is set to launch on Pylon Gateway on October 7, 2021. This will happen in two methods; Pylon Swap and Pylon Pool.
Both these methods do not require KYC.
Pylon Swap (Oct 7, 0:00 UTC)
There will be a total of 15,000,000 VKR tokens (1.5% of total supply) in Pylon Swap. The listing price of VKR will be $0.10. These tokens will be distributed over a 3 month vesting period after a 1-month lock-up.
In order to participate in Pylon Swap, users must stake a minimum amount of 1,000 MINE tokens in Pylon Governance. The graphic for how many VKR tokens a user is allowed to swap for is below:
Pylon Pool (Oct 8, 0:00 UTC)
A total of 15,000,000 VKR tokens (1.5% of total supply) are in Pylon Pools. This will be distributed among 3 different pools with different vesting periods; 6 months, 12 months, and 18 months. The details of how the tokens are allocated are in the graphic below:
Personal Thoughts
This section consists of my personal opinions regarding the project and should not be taken as any sort of financial advice.
Like I’ve mentioned before, Valkyrie is a unique protocol in the sense there is nothing like it on Terra or other chains, therefore it’s hard to judge the success of this protocol.
Based on how it’s designed, VKR tokens rely heavily on the number of campaigns being generated on the protocol. This can be seen as both a positive and a negative. It is positive in the sense if the protocol finds product-market fit, VKR’s value accrual mechanism will capture all that value adequately. But it can also be seen as a negative if the protocol doesn’t find product-market fit, as this will lead to the VKR token essentially having little to no value.
Another important thing to note is that the market for Valkyrie is limited to the number of protocols/ projects on Terra currently. This means campaigns can only be made if these protocols find value in Valkyrie’s product. Now there have been talks of the Valkyrie team already in contact with other protocols on Terra to create campaigns once Valkyrie becomes live. It will be interesting to see if these protocols will consistently use Valkyrie after the initial “hype”.
I think the “bull case” for Valkyrie is when the campaign creation process becomes easy enough to where any user will be able to create campaigns. It is then the market for Valkyrie will open up to influencers, content creators, and artists.
Overall, Valkyrie is a novel project that I’m personally excited to see at work. With a few notable investors in Hashed and Arrington XRP Capital and close ties with TFL, Valkyrie should be in a prime position to tackle the inefficiencies in the current referral marketing industry.
More Information
- Valkyrie’s Twitter: https://twitter.com/valkyrie_money
- Valkyrie’s Telegram: https://t.me/valkyrie_protocol
- Valkyrie’s Website: https://valkyrieprotocol.com/
- Valkyrie’s Whitepaper: https://valkyrieprotocol.com/whitepaper.pdf
- Valkyrie’s Docs: https://docs.valkyrieprotocol.com/
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Disclaimer
This content is for informational purposes only and you should not make decisions based solely on it. This is not investment advice. All market prices, data, and other information are not warranted as to completeness or accuracy, are based upon selected public market data, and reflect prevailing conditions and the author’s own views as of this date, all of which are accordingly subject to change without notice.
