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VC funds that import allocations into 1st earn ongoing fee revenue in addition to any proceeds from selling their allocation. When a fund sells mirror tokens on 1st, it receives USDC from the sale like in any other market. In addition, because the fund has supplied verified private-market inventory to the exchange, it continues to earn a share of trading fees generated by activity related to the imported amount. Unlike OTC sales, where an allocation is sold once for a fixed price and all future participation ends, importing a SAFT or SAFE into 1st allows VC funds to monetize liquidity immediately while also earning recurring fee revenue as mirror tokens trade throughout the vesting period.

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Fee structure for VC funds

On every buy trade executed on 1st, 0.5% of the USDC trade value is allocated to VC funds and other investors who have imported SAFTs or SAFEs with token warrants. This fee pool is distributed pro rata among all parties that have imported allocations for that market, based on the relative size of their imported amounts. The more allocation a fund imports, the larger its share of the fee pool.

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Pro rata fee distribution example

  • VC Fund A imports $400,000 worth of allocations
  • VC Fund B imports $100,000 worth of allocations
  • Total imported allocation is $500,000
VC Fund A represents 80% of the imported supply and receives 0.4% of every buy trade.
VC Fund B represents 20% of the imported supply and receives 0.1% of every buy trade. This split applies to all buy-side trading activity for as long as the imported allocations remain active.

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Fee source

VC fund fee revenue is generated entirely from secondary trading activity on 1st. Fees are earned only when trades execute, and revenue scales directly with market demand and trading volume. There are no fees without execution. As mirror tokens change hands over time, allocation importers continue to earn fees as long as trading activity persists.

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Monthly payouts

VC fund fees are paid out monthly, on the 1st of each month. Fees accrued during a given month are aggregated and settled in a single payout, simplifying accounting and reporting.