The Playground

Replacing inefficient OTC/Secondary Sales

In Tradfi, the concept of OTC or secondary sales has long existed. Initially, it was reserved for investors with significant liquidity issues, and the sales happened at an extra discount. In recent times, this has become increasingly more common, the market for them has expanded, and holders are utilizing secondary sales as a profit center. In the Venture DAO space within crypto, there is a common practice of having an OTC room in the group Discord. In this room, members can offer all or portions of their allotment on a particular deal for sale and find buyers within the DAO. The drawback is that there is a limited audience, and only a small number of the members even check this room due to the noise inherent in Discord. If a deal is struck, the members generally have to rely on an administrator to be the arbitrator and act as an escrow service to middleman the transaction. This is inefficient.

In the NFT space, there is a particularly vibrant concept of whitelisting and trading whitelist spots. This process has been a bit more normalized regarding NFTs than elsewhere, and some tools have emerged to aid the process, particularly within the Solana ecosystem.

The Playground builds on all of these.

When a user participates in a deal through our Venture Window and receives preTokens, they will be immediately liquid in the sense of having a tradable asset. But there is not an immediate obvious market for this as the volume would not be high enough to justify creating liquidity pools on a decentralized exchange.

The Playground is the solution to this. Rather than act like a decentralized exchange in the Uniswap or Sushiswap mold, it functions more like a marketplace similar to Opensea or Magic Eden.

Sellers will be able to:

-List their preToken for a “Buy Now” asking price.

-List their preToken for an auction, set a time period and a reserve price.

-See if there are any posted requests/orders for their preToken.

Buyers will be able to:

-Shop and purchase listed “Buy Now” offers.

-Bid on and participate in auctions.

-If a preToken is not listed at current, they will have the option to browse a list of recognized preTokens in circulation and post a standing “Order” offer.

For the sake of clarity, we want to emphasize that participation in the marketplace is entirely optional. No preToken holder is required to participate in any way, and a majority of them will likely just hold the preToken until redemption. This is good and desirable.

However, for those who want to be more active, hopefully, it’s apparent that this is a vast improvement to the efficiency and market mechanics of OTC trading. The old workflow has been replaced with a living, active marketplace for all participants. This adds a dimension of game theory to early-stage investing. Rather than a binary outcome between investing and launch, it introduces the possibility of selling a position short or bidding up a hot position.