Summary
Due to business considerations, ItoVault is sunsetting directly mirroring SpaceX, VTI.
Practically speaking, what this means is that:
- The value of your vSPACEX and vVTI tokens and vaults are currently safe. They will settle to fair value or better.
- In the near future, after the Final Settlement Date, vSPACEX and vVTI will stop tracking SpaceX and VTI.
- After the Final Settlement Date, there will be a period before the Final Support Date (expected to be December 30th, 2021). If you want to ensure your value back, you are encouraged to cash out before the Final Support Date via e.g. Uniswap.
Specific Plan
Specifically, our current plan is follows:
- Community Feedback Period: Between the publication of this post and end of day November 11th, 2021, we will take comments via Discord and email on this sunsetting plan. Since we consider this a community plan, feedback from all community members, especially active participants, will be taken into serious consideration. Update: This period is finished and since no objections were raised, the plan was considered approved on 11/11/2021.
- Final Settlement Time: December 7th, 2021 23:59 UTC. This time will be the reference time used for pricing vSPACEX and vVTI (see Fair Market Value) below. Shortly (within 5 days) after this time, oracle will update prices of tokens one last time, and governance or anyone can run registerGloballySettled() which allows direct conversion of vSPACEX and vVTI vaults and tokens to ETH.
Update for vVTI: Based on the 12/7 VTI closing price, accumulated dividends, and the ETH closing price, one vVTI has been updated to be worth 55601760676871600 wei permanently.
Update for vSPACEX: Based on vSPACEX calculation methodology below, the oracle has be set to $840/token. Vault creators can redeem debt at $210/token, a win-win for everyone. This is even though we have reports of SPACEX transacting at $560/share, because the above settlement is better for both vSPACEX holders and vault holders, and because the $560/share transaction occurred before 11/1. One vSPACEX has been updated to be worth 194667049820860000 wei permanently. - Final Support Date: December 30th, 2021 23:59 UTC. Before the Final Support Date, ItoVault encourages community members to maintain Uniswap liquidity to facilitate cashing out and will maintain a direct line of support on Discord / email. After the final support date, Uniswap liquidity and Discord/email support may not be available.
Settlement (Fair Market Value) Calculations
Fair Market Value Calculation for vVTI
Fair Market Value calculation for vVTI will be done similarly to vSPY and with reference to the original whitepaper. Specifically, vVTI Final Settlement Time Fair Market Value will be the December 7th, 2021 close price of VTI in terms of USD reported by VTI’s standard exchange at the end of regular trading hours (normally 4PM US ET). The close price of ETH/USD will be the UTC daily close price reported on Coinmarketcap.
Fair Market Value Calculation for vSPACEX
vSPACEX Fair Market Value will be calculated according to the two cases below. In both cases of the world, the close price of ETH/USD will be the UTC daily close price reported on Coinmarketcap.
Case A:
If more than 1% of vSPACEX trades (including a fundraise) between now (November 1st 2021, 00:01 UTC) and the Final Settlement Time, then that price will be used as the Final Settlement Time Fair Market Value. Basically in this case of the world, we have a valid recent price for SpaceX.
Case B:
In all other cases of the world, Final Settlement Time Fair Market Value will be determined as follows. Technically, in accordance with the whitepaper, the last valid price for SpaceX would be $420, which SpaceX traded at earlier in 2021. Tokenholders would be able to redeem against the vault at exactly $420, and conversely vaultholders would owe exactly $420 per token issued.
However, to reward our community members, ItoVault will settle tokens and vaults as follows. This procedure is valid for all tokenholders and also all vaultholders who created debt before now (November 1st, 2021 00:01 UTC).
This settlement procedure is known as “best of both worlds” and is better for both vaultholders and tokenholders. Tokenholders will settle at the double of $420, or $840, while vaultholders will only owe half of $420 per token issued, or $210.
Technically, this would be implemented as follows for logistical simplicity:
- The final oracle price will be $840. This allows tokenholders to settle their tokens either via Uniswap (before Final Support Date) or directly against the smart contract.
- Vaultholders who last minted tokens before now (November 1st, 2021, 00:01 UTC) should email contact@itovault.com before the Final Support Date for instructions on how to redeem your vault for only $210 per token issued. Vaultholders who do not do this will be able to redeem their vault through the standard process at $840/vSPACEX token debt.
FAQ:
Q: Does vSPACEX and vVTI still work as originally advertised right now?
A: From now (Nov 1st, 2021) until the Final Settlement Time above, vVTI and vSPACEX are still tracking their underlying as originally designed, subject to the settlement conditions above.
Q: Today (Nov 1st, 2021), vSPACEX is trading on Uniswap around $773, why would you settle it at $840?
A: In absence of further trades, according to the original specs the most reasonable price to settle it to would be its last trade price, or $420. However, in order to appreciate tokenholders’ support, the token settlement price will be set to $840, higher than both $420 and $773.
Note that vaultholders who minted tokens before today have the option to redeem their vaults at an advantaged price of $210 via the instructions above in Case B.
Q: If vSPACEX tokens are redeemed at $840 and vSPACEX debt is redeemed at $210, isn’t there an arbitrage opportunity by minting lots of vSPACEX right now?
A: No. Only vSPACEX debt generated before today (specifically Nov 1st, 2021, 00:01 UTC) is eligible for redeeming their vSPACEX debt at the advantaged price of $210. Anyone who creates vSPACEX from now on will need to redeem their vSPACEX debt at $840. There is no arbitrage opportunity.
Q: Will the ItoVault team be working on other projects?
A: Yes! The ItoVault team are still strong believers in crypto and will be starting new interesting projects in other areas. In order to keep in touch, please DM us and tell us a bit about yourself and we’ll reach out as the opportunity arises in the future.