Thesis / Summary
Sanctum and CLOUD at $16M MC / $90M FDV is an interesting long idea, CLOUD stands to benefit from near-term structural changes to Solana staking, with little marginal sellers remaining and recently added new token sinks. The thesis is threefold:
- Sanctum’s Validator LSTs and Router found strong PMF during a period of growing penetration in Solana liquid staking, allowing validators to differentiate in a growingly complex staking ecosystem. Validated by TVL remaining sticky at ATH in SOL terms post Wonderland S1 farming, and a diverse set of use cases ranging from infra providers (Helius), exchanges (Binance/OKX), DeFi applications (Jupiter), Memes/communities (Bonk)
- Recent significant SIMD proposals (96, 228) set up dynamics where base issuance is lowered and priority fees to validators are increased, resulting in a larger proportion of rewards comprising of MEV and priority fees. Sanctum is in a pole position to provide a deeply liquid mechanism for individual validators to differentiate via providing idiosyncratic rewards to stakers
- Sanctum recently revamped their fee model to monetize directly via a take rate on staking rewards, previously hindering the ability for TVL growth to be attributed to value acrual. CLOUD currently trades at 5.5x P/F, with little marginal sellers left for the next 5 months alongside catalysts for near-future token sinks: LFG vault buyers (at 180M FDV) are fully unlocked, 5 months until seed investor unlocks, CLOUD staking recently launched with ~25% of circulating supply staked with a 30d unstaking period, and Wonderland S2 on the horizon.