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VESTING CAPSULES: Vested Tokens Locked within Tradable NFTs

This post was originally published on Charged particles

Ben Lakoff

Jan 11 · 5 min read

Vesting has long been a tradition with companies. “Vesting” is a legal term that means to give or earn a right to a present or future payment, asset, or benefit.

Teams and Investors are promised some value that they will get in the future. Within the world of web3, the future value is typically locked into a smart contract, with the team member or investor receiving tokens at a pre-determined future date into their wallet.

But what if you could give teams and investors their tokens at the time of launch? You could even allow them to trade them with others — all without the tokens touching liquidity pools or exchanges.

Token ownership without any price risk from dumping.

Charged Particles makes this possible, injecting finance into your favorite art NFT. Let’s take a look.

Depiction of Vesting Capsules — freely tradable without tokens touching the market

What are “Vesting Capsules”?

A Vesting Capsule is a NFT with tokens nested inside and time-locked for a pre-determined vesting period.

A NFT, filled with time-locked ERC-20 (or ERC-721, or ERC-1155) tokens.

While the Vesting Capsule can be traded, the internal assets (nested tokens) are locked until the end of the chosen vesting period, at which time the owner can release them.

Using Charged Particles, the digital assets held inside these NFTs can be programmatically time-locked. The value is there, But it’s perfectly containerized and locked into the NFT.

Why use Vesting Capsules?

Web3 is all about true ownership, and vesting capsules allow this theme to be applied for teams and investors. Teams and investors now can have complete sovereignty over their own token allocations from day 1, without replying on another party to send in the future. No future work from others or trust required.

An added benefit for the project, since ownership of tokens can be passed to team or investors immediately, then the projects do not hold the responsibility of custodianship for future team or investors allocations.

Now, with the Project tokens time-locked and associated with an NFT as opposed to a wallet address, these unvested tokens can be accessed as the asset that they are including:

  • Transferring the Vesting Capsule. No longer tied to a single wallet, owners can gift, trade, transfer, or sell their Vesting Capsule at any time. This offers them some degree of liquidity of investment, while preventing the tokens in question from hitting exchanges or AMMs, thereby obviating any negative price impact. As each Vesting Capsule is an ERC-721 token, it can be traded on platforms such as Rarible or OpenSea.
  • Using the Vesting capsule as collateral for a loan. Protocols that allow NFTs to be used collateral are coming. Lots of them. All with slightly varied ways of doing it. As an NFT, you’ll be able to use your Vesting Capsule as collateral and access some of the value of your locked vested tokens today.
  • Selling the tokens before they vest
  • Transferring the vested tokens to another wallet

Finally, visual elements can be added. As a Vesting Capsule is an NFT, it can look like anything the minter chooses — perhaps the project’s logo or creative design. Additionally, as with most NFTs, Properties of the Vesting Capsule can be baked in as metadata for easy visual reference. For example, the period of vesting.

A Vesting Capsule can hold as many tokens as desired, and be time-locked for the chosen vesting period. It’s a freely tradable instrument.

How to make a Vesting Capsule

All 3 steps creation steps can be carried out in 3 minutes on Charged.fi.

  1. Mint the NFT capsule
    Make it plain, or jazz it up with your logo or artwork.
  2. Energize the capsule with the tokens you wish to vest
    As many ERC-20 and LP tokens as you like.
  3. Time-lock the capsule for the desired vesting period
    One day to one hundred years.
  4. After vesting period, Capsule owner can ‘Release’ assets
    A single click on Charged.fi, or function written to blockchain via Etherscan.

There it is — a Vesting Capsule. As a project you can use this for early investors, large OTC sales, or for your team members.

Good for you — you are not responsible for custodianship of their money. Good for them — they have ownership; a bearer instrument.

Indeed, investors can now freely trade these capsules privately or publicly.
Perhaps the capsule will even be perceived to increase in value over time as the vesting period elapses. In any case, the tokens remains safely vested inside until the designated date, at which time the owner can choose to ‘Release’ them with one click on Charged.fi (function also always accessible on-chain, e.g. via Etherscan.io).

Would You Like to Utilize Vesting Capsules?

The tech is ready, free, live, open-access, and easy to use.

You can DIY on app.charged.fi, with options to create Vesting Capsules on Ethereum or Polygon networks.

For any questions or guidance, we have loads of tutorials at: docs.charged.fi or please feel free to reach out to our team, via any of our channels (Discord is most active).

About Charged Particles

Charged Particles is a protocol that allows users to deposit ERC-20, ERC-721, and ERC-1155 tokens into NFTs. A scarce NFT (e.g. Art, Collectible, Virtual Real Estate, In-Game Item, etc.) can now be transformed into a basket holding a number of other tokens. The Principal amount can be time-locked inside the NFT, and through integration with Aave’s aTokens, the programmable yield from these DeFi yield-generating assets is just a few clicks away.

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