How does the Genesis Pool allow the community to determine the true value of VAPE?

Let’s use a hypothetical scenario where 100M VPND is surrendered into the genesis pool, and you personally account for 1M of that VPND surrendered. VPND at the end of the event is worth $0.002. Here’s how it would all net out.

  • 100M VPND is surrendered into the Genesis Pool, worth a total of 200K USDC (this is the VPND TVL)

  • 420,000 VAPE is emitted to the participants, with the full emission being valued at 200K USDC, or 0.476 USDC per VAPE ([Value in USDC of VPND Surrendered] divided by [420,000 VAPE])

  • Your 1M VPND represents 1.0% of total VPND surrendered, allowing you to claim 1.0% of the 420,000 VAPE

  • You’re able to claim 4,200 VAPE at an initial valuation of 2,000 USDC

  • A 3.0% claim fee (deducted from the 4,200 VAPE) is charged upon claim — and the 126 VAPE is sent to the VaporFi Labs treasury for liquidity management

  • Your 1M VPND ends up netting you 4,074 VAPE, fully transferable to other wallets after claiming

How does the Genesis Pool allow the community to determine the true value of VAPE?

When we explore valuations, there are three different values that we need to examine. The first is determined by the Genesis event, the second can be determined afterwards by the community, and the third is established at the time that the community creates the first liquidity pool

  • Cost to Acquire

  • Initial Valuation

  • Market Valuation

Because the Genesis event requires the permanent surrender of VPND in exchange for a share of a fixed amount of VAPE tokens, it’s possible to use VPND TVL at the end of the event to determine a true marginal cost, or cost to acquire the initial supply of 420K VAPE tokens.

Cost to Acquire

The cost to acquire VAPE can be determined at the end of the event by dividing VPND TVL by 420,000 (number of VAPE tokens). This is the objective and absolute amount of value that the community collectively surrender in VPND in order to acquire their collective stake of 420K VAPE tokens.

Having and establishing an objective and public cost to acquire is a huge part of a healthy community driven valuation — because it informs what the logical floor value for VAPE should be. If the community collectively surrendered 50K USDC worth of VPND for 420K VAPE tokens — it tells us that in total, the community gave up $0.119 worth of VPND for every 1 VAPE token they received.

The community’s cost to acquire the initial supply of VAPE sets a natural minimal valuation that everyone can agree on.

At the end of the Genesis event, once cost to acquire has been fully established, the community now has the ability to develop their own personal and collective initial valuation.

The graphic above shows several hypothetical scenarios and how the price of VPND, combined with the amount of VPND surrendered during the event — can be used to calculate the cost to acquire the initial 420K supply of VAPE tokens.

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