Herald In-Depth Guide

This guide covers the economics and mechanics of Herald ownership. For a quick introduction to what a Herald is, see What is a Herald?.

The Harberger Market Mechanism

SVTs use a Harberger market mechanism: Heralds self-assess their token's valuation (Val), pay continuous royalties based on it to its author, and anyone can purchase the SVT at that Val. This creates a market where tokens flow to those who value them most.

For a detailed explanation of the Harberger tax, see Harberger Tax Explained.

Becoming A Herald

To become a Herald, pay the current Herald's Val. If the SVT has no Herald, the Val is zero — but you still must set a Val and pay royalties proportional to it.

Steps:

1. View the current Val, displayed in the post's sidebar
2. Click "Become the Herald" and pay the current Val
3. Set your new Val (minimum +10% above purchase price)
4. Have enough deposited funds for at least 24 hours of royalty payments
5. Transaction executes: you become Herald, the previous Herald receives the full Val payment

Example:

• Current Herald (Alice): Val = 0.5 ETH
• You want your Val to be 0.75 ETH (must be at least 0.55 ETH)
• You need additional funds for at least 24 hours of royalties at your new Val (around 0.002 ETH in this case)
• Total funds required: ~0.502 ETH. The 0.5 ETH goes to Alice, and you become the Herald

Lock Period

When you buy an SVT or raise your Val, a 24-hour lock period activates.

During the lock period (first 24 hours after purchase or Val increase):

• Val can only be raised, not lowered, minimum increase of +10% of current Val. This prevents trivial +1 wei price bumps.
• SVT can't be unheralded
• Higher protocol fee: 90% of royalties go to the protocol treasury instead of the standard 30%.

This disincentivises authors from artificially inflating valuations by self-buying. The Herald pays the same total royalty amount — only the author/protocol split changes.

After the lock period:

• Full flexibility to raise or lower, minimum Val floor of 0.001 ETH still applies
• SVT can be unheralded
• Standard protocol fee: 30% of royalties go to the protocol treasury, 70% to the author.

For complete details, see Lock Period Explained.

Royalty Payments

Royalties are paid from your deposited ETH balance in the SVT contract. The contract handles all accounting autonomously: deducting royalties from your balance, crediting the author, and collecting protocol fees. All onchain, autonomously, permissionless.

Royalty Rate

The current rate is 2% of Val per week, paid continuously.

It results in ~104% of Val per year.

Royalty Split

The royalty split between author and protocol treasury depends on the lock period:

Depletion

You must maintain sufficient deposited balance to cover your ongoing royalties. The contract tracks your exact depletion timestamp — the moment your balance would reach zero based on your current obligations.

What Happens When Your Balance Depletes

If your balance runs out:

• All your heralded SVTs are unheralded at once
• Each unheralded SVT has its Herald address cleared and its Val reset to zero
• The SVTs become available for anyone to claim at Val = 0

This is enforced on-chain and happens automatically. There is no grace period.

Avoiding Depletion

• Monitor your balance and depletion timeline
• Deposit additional funds before your balance runs out
• Lower your Val to reduce your burn rate
• Voluntarily unherald SVTs you no longer wish to support, reducing your total royalty obligations

Prefer a simpler rundown? Check out the What is a Herald? quick reference.