DLMM Case Study: The $CLOUD Launch

Soju’s ramblings about LFG Launches: Part 2

This is the case study of how Sanctum leveraged the DLMM technology to launch $CLOUD.

$CLOUD was the fifth LFG launch (after JUP, ZEUS, SHARKY & UPROCK) which took place in June 2024. Sanctum was a strong team with a community-attuned leader (shoutout to FP), and a strong product/offering with billions in TVL.

Summary of the $CLOUD Launch:

• Initial Price: 0.0001 USDC, Max Price: 0.5 USDC
• Supply: 10% of CLOUD, or 100M CLOUD Tokens
• Fee: 2.5% base fee
• Alpha Vault: 7.5M USDC Cap

Bin Visualisation: https://ilm.jup.ag/#k=0.85&i=0.0001&m=0.5&a=10&t=1000&bps=80

There were 3 key factors that made the $CLOUD launch unique:

1. Dual Pathway: ‘Curious’ vs. ‘Long-term Aligned’
2. Alpha Vault with a $1M Starting FDV
3. Innovative Airdrop Mechanism (Vesting + Dynamic Bonus)

Let’s break each of the points down in detail.

Dual Pathway: ‘Curious’ vs. ‘Long-term Aligned’

For the launch of $CLOUD, we encouraged participants to self-identify as ‘long-term aligned’ or ‘curious’.

The key here is to ensure that folks who are curious, but not yet fully bought into the Sanctum vision, were not branded as “dumpers”.

Sanctum’s goal was to convert them into ‘long-term aligned’ users.

Thus, for the $CLOUD LFG Launch, we created two very clear “pathways” — one for the aligned, and one for the curious.

1. If you were ‘aligned’: Deposit into the Alpha Vault at the vault price (cheaper), hold your CLOUD throughout the lockup period.
2. If you were ‘curious’: Trade the token at TGE and claim your CLOUD immediately.

We sought to create two separate pathways for each group, ensured that each path was not overly attractive and aimed to allow people to choose the right path for themselves. Making one side overly attractive would render it moot, as everyone would prefer to self-identify as that option.

Launch details for each pathway:

1. Aligned: Alpha Vault is capped at $180M FDV, and 6 months vested. Earnestness Airdrop was 2x over 6 months, and Capital was 2x over 14 days.
2. Curious: Trading at TGE will be fully unlocked (no vesting), but begin 180M FDV ↔ 500M FDV. Claim airdrop immediately and give up on the 2x bonus.

This way, everyone’s strategy at launch was simple — pick one of the two paths, and proceed accordingly.

Alpha Vault with a $1M Starting FDV

For the $JUP launch, we chose a high initial price of $0.4 or 4M FDV so that bots/snipers entered at a fairer price.

For $CLOUD, we had a new tool up our sleeve — the Alpha Vault.

With the Alpha Vault, we had a “market” way of determining the starting price.

By setting the curve from $1M FDV to $500M FDV, and having the Alpha Vault buy before trading begins, the starting price of $CLOUD’s TGE will be market-dependent on the amount of USDC in the Alpha Vault.

Take the right column as the amount of USDC in the Alpha Vault:

• If there was 1.378M USDC, the starting price will be $0.127.
• If there was 27.032M USDC, the starting price would be $0.5.

We then set a maximum cap of 7.5M, which meant that the starting price will be no more than $0.27744.

This way, we had a market-dependent way of determining the starting price. If more users deposited, the starting price will be higher.

At launch, these were the statistics for the Alpha Vault:

• 423.66% oversubscribed
• 5,043 depositors, with a median deposit of $112.96, and average deposit of $6,300.70

This meant that the starting price will be $0.27744 at launch.

Innovative Airdrop Mechanism: Vesting & Dynamic Bonus

To help set up the 2 pathways, we built new mechanisms for our airdrop mechanism:

1. Vesting Airdrop: Each user receives a full allocation, but is programmatically given a cliff + linear vest period. Users can claim multiple times.
2. Dynamic Bonus: Each user receives an allocation, and a linear bonus that increases over-time. User can only claim one time.

The code is open sourced and can be used here.

We used the vesting airdrop for the Capital Allocation, allowing users to claim the full sum of their rewards for providing liquidity over-time, and used the Dynamic Bonus for the earnestness allocation, where users earn CLOUD based on their contributions to the Sanctosphere.

These mechanisms accurately tied the behaviours of these users to the airdrop tool.

For Capital Allocation, users took a risk and expect a certain APY, and thus should have their full allocation (although vested).

For Earnestness, it was more of ensuring more tokens went towards the Aligned, and less towards the curious, in exchange for a longer-period to wait.

What Happened at Launch

• Alpha Vault was oversubscribed with $31.1M in USDC deposits on a $7.5M Vault
• Alpha Vault depositors got 24% of CLOUD at a cost basis of $180M FDV, and 76% in USDC
• Trading began at $0.27744, with airdrop claimers selling and Sanctum Curious buying in
• Airdrops opened but most were delayed for earnestness or claimed the capital vest

The volume of CLOUD at launch was lower than other launches because the vault had occupied a lot of buying volume from retail investors. However, the attractiveness of CLOUD still got them multiple CEX listings despite not paying for any — a pretty big W in my books.

Conclusion

Overall, the CLOUD launch was one of the biggest LFG launches thus far.

A lot of the technology we worked on here is available — completely open for anyone looking to utilize it.

• DLMM Launch Pool: https://docs.meteora.ag/token-launch-pools/steps-to-create-a-pool-for-token-launch/create-dlmm-launch-pool
• Alpha Vault: https://docs.meteora.ag/token-launch-pools/steps-to-create-a-pool-for-token-launch/create-pools-with-alpha-vault
• Jupiter Distributor: https://github.com/jup-ag/distributor

You can also explore all of Jupiter’s tools and more at launch.meteora.ag — the central place where you can find everything about Meteora and launchpad technology.