Author: Eric, Foresight News

A token issuance platform called Soar, which registered an X account two months ago and has fewer than 2,000 followers, gained attention due to an article with over 350,000 views (https://x.com/LaunchOnSoar/status/1965476405455864175).

In this article, Soar openly criticized the current chaos in the cryptocurrency market, pointing out three significant issues: the issued tokens lack real value, there is a lack of transparency in token sales, and founders have no motivation to focus on long-term value due to their low token holdings.

Soar has decided to attempt to bring some changes to the industry with a patent-pending token standard and a new platform. Currently, the project team has only provided some conceptual explanations of the new token standard and stated that further explanations will be given before the official release. Based on the available information, I will describe Soar's operational mechanism.

The new token standard launched by Soar is called DRP (Digital Representation of Participation), which can be roughly translated as "Digital Representation of Participation." Regarding the mechanism of DRP, Soar provided a rather obscure explanation:

• Tokens deployed under the DRP standard will not, in nature or fact, become or ever be any form of equity;
• They only represent specific value relationships: retained or value that should belong elsewhere;
• This relationship is bound by a private contract ("Agreement") between the token issuer ("Issuer") and the entity providing the rights to use the DRP standard ("Provider");
• Under the DRP standard, the Issuer will lose a certain amount of value when deploying tokens but can regain that value at any time by reclaiming the tokens;
• After the initial deployment, the Issuer must wait a period before releasing any retained tokens to the market ("Holding Period");
• After the Holding Period ends, whenever the Issuer releases previously held tokens, they must clearly disclose the number of tokens to be released and the reasons for the release ("Disclosure");
• After any Disclosure, the Issuer must wait another period before releasing the tokens to the market;
• At any point in time, the Agreement will automatically reflect the relative value between the Issuer and the Provider and has specific triggering conditions ("Events") that, once triggered, will automatically settle the relevant value between the two parties;
• The DRP standard also includes many other mechanisms/functions to enhance transparency, strengthen accountability, and create an incentive balance between token holders and issuers.

Under this standard, the company acts as the token Issuer, while Soar serves as the Provider of the DRP standard:

• The company holds a certain number of these tokens, which represent the value retained by the company at any given time;
• The portion of tokens not held by the company at any given time (i.e., held by external parties) corresponds to the value that the company no longer retains or cannot control at that time;
• According to the private contract, Soar has the right to receive, and the company should prioritize paying Soar the value not retained by the company;
• In the event of a Company Liquidity Event, Soar becomes the recipient of that value and can decide how to handle it.

Overall, tokens issued under the DRP standard must agree on the "value relationship" represented by the tokens at the time of issuance, meaning that the tokens must represent specific values, such as company value, rather than being simply issued as governance tokens. Moreover, this value relationship is contractually bound in advance.

However, Soar also states that these tokens will not be equity. I speculate that Soar aims to introduce a token that can represent the specific value of an entity but is not subject to traditional equity restrictions, thereby clearly addressing the question of "what exactly are the issued tokens" from the outset.

After the token issuance, the Issuer must hold the tokens for a period before they can begin selling their held tokens, and they must disclose their intent to sell and the specific quantity before selling, and even after disclosure, they must wait a period before officially selling.

The most challenging part of understanding the DRP mechanism is the value that the token Issuer (the so-called company) needs to pay to Soar when specific conditions are triggered. I believe this mechanism is similar to the "privatization delisting" of publicly listed companies in the stock market, meaning that if a listed company wants to privatize and delist, it must repurchase publicly issued shares to reduce public holdings below the exchange's requirements. In Soar's design, tokens not held by the "company" must be accounted for by the "company" when it plans to liquidate. This largely prevents Rug behavior.

Soar explicitly states that the design of DRP draws on certain regulations from traditional securities markets, fundamentally blocking the behavior of casually issuing tokens and then selling them off, ensuring that tokens issued under this standard must represent actual value and strictly adhere to pre-sale disclosure guidelines.

Since Soar has not provided additional information, this is all we can conclude at this time. I have always believed that the prerequisite for the next round of altcoin bull markets must address the question of "what exactly do altcoins represent." Currently, many projects' issued tokens cannot be linked to the actual value of the projects, and no project has clearly explained what their issued tokens represent. These issues are likely the biggest obstacles for investors who favor cryptocurrencies but currently only dare to choose Bitcoin.

Although the design standards of Soar's mechanism are very strict, whether the standards are implemented through "gentlemen's agreements" or at the smart contract level, and how to ensure that the "company" will be responsible for the tokens in circulation in the event of "company" liquidation, all await further information from the project.

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