The OTC raise
Sell tokens at a discount → the desk hedges or dumps → you gave away price and manufactured sell pressure.
Funding Preferred
Raise capital without selling at a discount.
Capital today, without handing your token away cheap. Funding Preferred raises by giving buyers downside protection instead of a discount — so the raise can happen at par, or above it.
PriceToken Price
ProtectedPNL w/ Downside Protection
FloorProtection Level
Up to -90%
Token price
The discount you don't have to give
Raise capital without selling at a discount.
To raise, projects sell tokens OTC — to desks, funds, brokers — at a discount to market, often a steep one, usually with a lockup. That discount isn't generosity; it's the price you pay a buyer to take on your downside. And it doesn't end there: the desk hedges or sells to lock the discount in, so the price you gave away comes back as sell pressure you wear.
Funding Preferred removes the reason for the discount. Instead of compensating buyers with cheap tokens, you compensate them with a floor — downside protection, full upside, terms set before they enter. Take away the buyer's downside and you take away their reason to demand a discount. You raise at full price; in the planner, the raise even prices at a premium.
Funding Preferred
Sell a protected position at par → the buyer holds → you keep your price and don't create sellers.
Why it works
Why it works.
No discount
A discount compensates buyers for downside. Protection does the same job without giving away your token's value, so you raise at full price, or above it.
Capital upfront
You receive the raise at issuance. The protected position defines what you owe later, on terms you set before the raise.
Buyers who hold
They aren't handed naked tokens to flip. They hold a floor plus full upside, so the capital coming in doesn't turn straight back into sell pressure.
Who funds it
Who funds it
Allocators who want exposure to your token but won't take the naked downside — funds, desks, and treasuries that would pass on an unhedged bag but will write a check for a protected position with full upside.
How it works
How it works
1. Set the terms — protection level, term, conversion rights — before you raise.
2. Buyers fund it — they pay cash for a protected, convertible position; you get the capital upfront.
3. Settle on your terms — the position is yours to call and settle, in cash or collateral, when it suits the project.
The exact economics — issue price, protection, vest, call terms — are yours to set. Model them in the planner.
FAQ
Common questions.
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.
More detail in the full documentation.
Raising? Let's design the terms.