Everyone wants to be early. Entire product categories are built around this. TG bots that tell you every time a new token launches, watching launchpad deployers in order to finally be early. This comes after years of VCs entering the space and getting early rounds where the valuation is 1/1000th of the valuation that everyone else gets in at, leading to consistent and persistent selling on top of those who were really supposed to be the community.

After everyone got tired of this, the discussion of fair launches started to become more and more prominent. Projects began launching in stealth at lower valuations so that people who would typically never be able to get in at that valuation were able to. This was an improvement, but over time, this also eventually became gamed with things like bundles, “cabals,” etc. Ultimately, this led us back to the same problem that existed before. A small group of people gets a majority of the supply at an extremely low valuation and is able to sell large amounts on everyone who comes after them.

Another unintended consequence of this is that, with these fair launches, a persistent issue of low liquidity started to creep in. Also, putting all of your tokens into the liquidity pool initially comes with another host of issues. It unintentionally limits what teams are able to do with the tokens. They have no room to play with. No way to create incentives, build liquidity, or fund development. The obvious answer is, well, just have revenue. But with no initial funding from the fair launch and no way to incentivize early usage, it becomes harder to build those early revenue streams.

At Enten, these are the problems that we look at and think there are better solutions out there. How can we help teams fairly distribute tokens, set themselves up for long-term success, and still reward early participants?

One of our answers is leverage.

Leverage often has an association with perpetual futures and losing it all in this space. However, we do not mean borrowing money to potentially get more profits, or losses, but rather: how do you get more out of what you have? How can you make every dollar that comes into your system feel like more?

That is how we want to design, and have designed, Enten systems to behave. Not through some magical process where a dollar immediately becomes five dollars, but by finding ways for the same dollar to continue creating value throughout the system instead of being used once and then sitting still. Let’s walk through an example of $1 flowing through Enten and systems that choose to be set up like Enten.

The first step is for a user to buy Enten from the auction. Let’s just say that each Enten token costs $1. The user gives the system their dollar and, in exchange, receives 0.9 Enten, which is completely backed. They get 0.9 Enten, and at any point in the future, they can exchange this back for at least $0.90, assuming NAV and price are the same when buying.

But what about the other $0.10? Where did this go, and why am I only getting 0.90 Enten?

That leads us to step two.

When users buy Enten from the auction, there is a fee associated with it. The fee is 10% in total (This 10% fee is Enten specific and might be different for other protocols). Enten systems can split this fee between the backing, protocol, team, and treasury depending on how they are set up. The protocol fee is a flat 2.5% for everyone, which goes to the Enten treasury. Individual teams can choose whether they want to charge an additional team fee. Backing is the percentage of each buy that goes into the reserves, for Enten it is 90%. Whatever is left goes toward the treasury of the system that the user is buying into.

For Enten itself, there is no team fee. Since Enten is also the protocol, the full remaining $0.10 ends up in the Enten treasury.

The treasury will eventually be community-run, but initially, the team will allocate where the treasury is deployed. Initially, it will go toward purchasing protocol-owned liquidity (POL).

Now the treasury takes the $0.10 that it earned and uses it to buy permanent protocol-owned liquidity from anyone willing to sell it. Instead of selling Enten tokens into the market to create liquidity, the treasury can exchange another asset that it already earned from the auction for liquidity positions in the ranges that the protocol needs.

This is an important piece of the system. The protocol is able to build liquidity without creating additional sell pressure on Enten. Once the liquidity becomes protocol-owned, it becomes permanent. The protocol does not need to depend entirely on outside liquidity providers continuing to stay in the pool. The liquidity can remain in place, generate fees for the protocol, and grow over time.

While it seems like a small thing initially, that additional $0.10 can eventually become an additional $1, $2, or $5 in value created throughout the system. Not as a guaranteed return and not immediately, but through the effects that the liquidity creates over time.

For Enten specifically, liquidity plays a huge role in the system. Giving users and traders deep liquidity that they can comfortably move in and out of helps generate more room for additional auctions through burns from trades, generates revenue in liquidity fees, and simply allows for a better trading experience for everyone.

That liquidity can generate fees. Those fees can be used to increase backing, build more liquidity, or fund other parts of the system. More liquidity can make it easier for users to trade. More trading can generate additional burns. Additional burns can create room for more auctions. Those auctions can generate additional treasury assets, which can then be used to purchase more liquidity.

The goal is to build a system where the same dollar is not only used once. It continues moving through the system and continues creating value.

This is just one example of how the additional funds from Enten systems can be used to create leverage within the system, all while allowing users to retain 90% of their value under the same assumption stated earlier.

Users can also immediately borrow against the backing value of their Enten with zero interest and zero liquidation risk. The borrowing is limited by the redemption value of the Enten that they hold. The system is not making a bet that the market price will remain high enough to cover the loan. The backing is already inside of the system. This allows users to access some of that value without having to sell their Enten and leave the ecosystem. They can then take those borrowed assets and create their own leverage elsewhere, while the treasury assets generated from their initial purchase continue working inside of Enten. Add in additional revenue-generating streams on top of this, which help feed backing and other aspects of the system, and you are able to generate a healthy ecosystem.

Are any of these pieces individually particularly revolutionary? Not really. But they do not need to be. Often, combining many simple components that have been known and around for a long time can lead to extraordinary results. And that is Enten’s purpose.

How can we give teams simple pieces that individually are okay and might work, but when combined together, lead to a solid foundation that they can build on top of?