This is a preferred token.
Full upside. Downside protection. Ownership backed by collateral, enforced by code.
Crypto built the rails to trade tokens. It never built the rails to own what's underneath.
Possession is not ownership
Crypto confused the two.
Today you can hold a token, move it, sell it, and custody it. What the common token does not give you is ownership of the protocol underneath.
Ownership means enforceable claims. Own a share of Apple and the board owes you fiduciary duties. If those duties are breached, there is a system that enforces remedies. That apparatus is the ownership.
Own a common token and no one is on the hook for anything. For the millions of common tokens in crypto, there is no recourse because that ownership layer was never built.
Crypto is mostly built for trading and traders. Not for owning.
A structural substitute
This is the history of crypto.
Bitcoin replaced central-bank issuance with programmatic proof-of-work.
Ethereum replaced legal agreements with smart contracts.
Uniswap replaced permissioned exchanges with permissionless swaps.
Each one built an alternative where an institution used to stand.
Ownership is still missing. Preferred tokens are the crypto-native ownership model for assets that can never be legal objects. Owners are issued a structural claim: backed, defined at issuance, and enforced permissionlessly by code.
Three primitives. One structure.
Every preferred token does the same thing: full upside, a floor on the downside, ownership backed by collateral and enforced by code. Three primitives point that protection at three jobs - building liquidity, raising capital, and keeping the holders a project can't afford to lose.
Protection is built into the token. If the underlying token rises, the owner keeps the upside. If it falls, the loss is bounded by a protection floor set at issuance and enforced by code.
With a common token model, protocols spend on listings, market makers, and rented liquidity. With a preferred token, that spend is redirected into owner protection. Protocols build their own liquidity. Owners get downside protection.
PriceToken Price
ProtectedPNL w/ Downside Protection
FloorProtection Level
Up to -75%
Token price
Liquidity Preferred
Liquidity Preferred
Build protocol-owned liquidity while protecting holders. For projects bootstrapping a market.
Funding Preferred
Funding Preferred
Raise capital upfront and give buyers a protected, convertible position. For projects raising.
Conviction Preferred
Conviction Preferred
Convert an existing cohort into protected owners, funded by the treasury. For projects fighting sell pressure.
From the desk
Research & writing.
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If Uniswap Can't Make Incentives Work, Who Can?
Unichain is the cleanest modern incentive test: blockbuster campaign numbers, partial retention, and a sharp reminder that durable growth needs more than emissions.
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Crypto is a jeet factory
Crypto retail is not dumb. They understand extraction, and adapt to survive. The founder challenge is no longer hype, but building structures users can trust.
Read moreReady to protect your community?
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FAQ
Common questions.
For holders
A preferred token is a structured onchain position that gives protected upside exposure with defined downside terms. Liquidity Preferred, Funding Preferred, and Conviction Preferred share the same family of mechanics, with different objectives and collateral framing.
Legal frameworks can help with disclosure and market rules, but they do not create this ownership and risk structure for crypto-native token holders. Preferred tokens define terms onchain through structured issuance mechanics.
A preferred token is an onchain instrument with defined downside protection and full upside exposure over a fixed term. If the underlying token drops below the floor, the holder has a predefined protection level; if it rises, the holder keeps upside participation.
User capital and project-backed collateral are structured into a protection mechanism at issuance. As long as outcomes stay above the agreed floor, the protection is designed to preserve value through the token term.
Holders capture the upside according to campaign terms. The structure is designed to preserve upside while limiting downside exposure under the floor.
Collateral is locked in immutable smart contracts from day one and is governed by the terms shown at launch. The project cannot withdraw or modify terms mid-term, and settlement rules are onchain, not based on discretionary trust.
Yes. Preferred tokens are ERC-20-class instruments and are designed to be transferable where secondary liquidity exists.
Preferred tokens reduce downside exposure, but don't remove risk: smart-contract risk, protocol risk, oracle/settlement risk, collateral risk, and price risk remain possible depending on terms.
For issuers
Projects define costs up front by choosing collateral commitment, protection level, and term. If the token performs, much of the structure is recovered at settlement; the cost is effectively tied to realized downside and campaign terms.
Deep, protocol-owned liquidity support, structured downside-aware positioning, and a class of holders aligned to your chosen term, not just opportunistic flows.
There is no hard minimum on protocol design, though practical minimums depend on campaign gas costs and liquidity economics.
Two things were missing: quant structuring expertise and an onchain tooling layer that can turn project treasury economics into a clean productized offering for long-tail tokens.
The project is the counterparty by defining and committing the backing at issuance. The same treasury-side mechanism that gives downside protection in the preferred structure also aligns project incentives over term.
The project sets them before launch. This includes protection level, duration, any conversion or call logic, and collateral mechanics. All terms are fixed and public before people enter.
From the issuer side: smart-contract risk, protocol risk, price risk, and term risk still apply. Protection can fail to meet expectations if structure, implementation, or market moves are stressed beyond modeled assumptions.
Current deployment coverage includes Ethereum and Arbitrum, with support designed to expand. Any ERC-20 token can be considered based on safety and liquidity prerequisites.
Founded by Jan Pevzner and Guyi Shen. See the team page for current leadership and operator details.
More detail in the full documentation.