How Liquify works

Project Creation

Initiator Registration MVP Capital, a venture capital firm specializing in blockchain startups, registers on Liquify. They complete KYC verification and sign an agreement, ensuring accountability and compliance for their allocations.

1. Project Setup

MVP Capital holds an allocation at a project called Hyperliquid (HYPE) and uses Liquify to manage and distribute the tokens to their network. They set the following project parameters:

• Owner Fee: 5%

• Platform Fee: 2.5%

• Price per Token: $1

• Payment Token: USDT

• Total Allocation: $500,000 (resulting in 500,000 HYPE synthetic tokens).

• Min Investment Cap: $50

• Max Investment Cap: $20,000

• Vesting Schedule: 4 months, releasing 25% of tokens at each month.

2. Fundraising

Investments Several participants join the round:

• Alice invests $200, receiving 200 HYPE synthetic tokens.

• Bob invests $5,000, receiving 5,000 HYPE synthetic tokens.

• Chris invests $20,000, receiving 20,000 HYPE synthetic tokens.

3. Selling Synthetic Tokens

Before the real HYPE tokens are distributed, investors can sell their synthetic tokens on Liquify’s secondary market to other participants. This allows them to exit or adjust their investments even before the vesting schedule begins.

Here’s how it works:

• Alice decides to sell 100 of her synthetic HYPE tokens at $1.20 per token.

• David, a new investor, buys these tokens from Alice, paying $120.

• David now holds the 100 synthetic HYPE tokens, and he will receive the corresponding real tokens when the vesting schedule is fulfilled.

This process ensures that David, the new holder of synthetic tokens, will be eligible to claim the real HYPE tokens during the distribution stages instead of Alice. Liquify facilitates this transfer seamlessly, ensuring a secure and transparent transaction.

4. Token Distribution

Depositing Real Tokens Once the funding round ends, MVP Capital raises $25,200 from participants. At the Token Generation Event (TGE), MVP Capital receives their real HYPE tokens in accordance with the vesting schedule.

First Vesting Stage MVP Capital deposits 25% of the total HYPE tokens (125,000 tokens) into Liquify for the first stage. Investors can now claim their real tokens:

• David (who bought Alice’s 100 synthetic tokens) claims 25 HYPE (25% of 100).

• Alice claims the remaining 25 HYPE (25% of her 100 remaining tokens).

• Bob claims 1,250 HYPE (25% of 5,000).

• Chris claims 5,000 HYPE (25% of 20,000).

Subsequent Vesting Periods At each new vesting stage, MVP Capital deposits another 25% of the HYPE tokens. Investors, including any secondary market participants, continue to receive their tokens in stages until the schedule is complete.

5. Project Completion

After all vesting periods are finished:

• David receives his full 100 HYPE tokens (from the synthetic tokens he bought).

• Alice receives the remaining 100 HYPE tokens.

• Bob receives his full 5,000 HYPE tokens.

• Chris receives his full 20,000 HYPE tokens.

The project status is marked as “Finished.”

Summary

Using Liquify, MVP Capital manages its Hyperliquid (HYPE) allocation seamlessly. Investors like Alice, Bob, and Chris enjoy the flexibility to sell their synthetic tokens on the secondary market before receiving real tokens, allowing new participants like David to join.