How Singularity Stabilizes the Market Through Vesting Obfuscation

Singularity
2 min readMay 7, 2024

As a reminder, Singularity is your gateway to the DeFi ecosystem confidentially. We’ve integrated with top DeFi protocols, allowing you to tap into existing liquidity seamlessly while maintaining confidentiality.

In this piece, we’ll explore the complexities and consequences of having public vesting unlock periods and how the Singularity protocol can alleviate these symptoms.

The Relationship of Vesting and Publicly-Linked Wallets:

Over recent years, thousands of tokens have been launched through Token Generation Events (TGEs), raising capital from various sources, including crowdfunding and venture funds focused on liquid tokens. These token sales attract a broad spectrum of investors, from retail participants investing under $100 to VCs with allocations worth millions. Regardless of the investor type, the investments and wallet transactions are publicly visible.

As token vesting periods commence and investors start receiving their allocations, these wallets are closely monitored due to the significant impact large holders can have on token prices as well as the signaling effect that comes with any vested token movements. The assumption is that early investors have an information advantage so monitoring their wallet movements can enable others to act promptly.

However, it’s crucial to understand that a large holder moving tokens might simply be reorganizing their wallets for maintenance and custody reorganization. Regardless of what the reason behind such movements, investors should be able to conduct their on-chain activities with basic confidentiality.

How Singularity Stabilizes the Market Through Vesting Obfuscation

The transition of tokens from restricted to unrestricted status can create significant selling pressure in the market, particularly when large token holders gain access to their assets.

Singularity addresses this issue by offering complete obfuscation of the vesting unlock period. This means the actions taken by token holders, whether selling on Uniswap, providing liquidity, staking, lending, or borrowing, can be conducted without market speculation about their intentions.

Projects can deposit locked tokens to the Singularity smart contract and set predetermined parameters like vesting period and allocation amount for each investor so that as the vesting period progresses, investors can claim these token streams confidentially inside the Singularity contract.

The streaming and claiming of the unlocked tokens remain confidential to any third-party observers. Once investors have claimed the tokens, they can then send them to their wallets, to a DeFi pool, or an OTC desk. This action can be observed on-chain but only to the extent that it is coming from the Singularity contract address, so the identity of the investor remains hidden.

Conclusion:

Singularity offers a crucial solution by shielding the actions of token holders around vesting periods, thus maintaining the secrecy of investment strategies and preventing market speculation. This approach ensures market stability and protects investors and team members with compliance and privacy.

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