What is the SVT Protocol?
The SVT (Self-Valued Token) Protocol is a decentralised system for creating and trading digital content NFTs, with a built-in Harberger market mechanism.
Unlike traditional NFTs, SVTs are in permanent auction. Heralds (token holders) must set a self-assessed valuation for their token and continuously pay royalties proportional to that value. Anyone can pay the valuation and become the new Herald, but they have to set a higher valuation.
This system creates an on-chain market where the users who value the tokens the most naturally end up as the Heralds, paying the highest royalties to content creators.
How It Works
- An author creates an SVT by creating content and submitting its hashes to a registry contract on-chain, minting a new token
- A Herald acquires it by paying the current valuation (Val) and setting their own, higher valuation.
- Anyone can buy the SVT at any time by paying the herald's Val and setting a new one
- Royalties flow continuously from the Herald's deposited balance to the author, proportional to the Val
- If a herald runs out of funds to cover royalties, the SVT becomes unheralded: its Val resets to zero and it's available for anyone to claim
This cycle ensures content creators receive ongoing income that reflects the real market value of their work.
Key Concepts
Val (Self-Assessed Valuation) — The price a herald sets for their SVT, in ETH. It determines both the purchase price (what someone must pay to take it) and the royalty rate (what the herald continuously pays the author).
Herald — The current holder of a SVT. Heralds pay continuous royalties from their account's balance. If they become insolvent, their SVTs are automatically unheralded.
Author — The original creator who minted the SVT. Authors receive royalty payments as long as a Herald owns their tokens.
Account Balance — ETH deposited into the protocol by a user. Used for purchasing SVTs and paying royalties. Continuously decreases based on the user's total royalty payments.
Solvency — A herald is solvent as long as their internal balance covers their accumulated royalties. Insolvency triggers automatic unheralding.
Locking Period — A cooldown after purchasing a SVT or increasing Val (default: 24 hours). During this period, Val can only be increased (by a minimum percentage), and the protocol takes a larger share of royalties.
Fee Structure
Royalties paid by heralds are split between the author and the protocol:
- During the locking period (first 24 hours): 10% to author, 90% to protocol
- After the locking period: 70% to author, 30% to protocol
The higher protocol share during locking discourages rapid flipping. A minting fee can also be implemented via governance vote.
Governance
The protocol is governed by a DAO through the SVG (Self-Valued Governance) token — an ERC20 token with voting capabilities. SVG holders create and vote on proposals through the GovSVT governor contract. Approved proposals execute through a TimelockController with a mandatory delay, giving the community time to react.
The DAO controls protocol parameters such as royalty rates, Val floors, fee percentages, registry approvals, and contract upgrades.
SVG Token Distribution:
- 25% — First community airdrop
- 20% — Founder allocation
- 55% — DAO treasury
All community and founder tokens are locked in a vesting contract, which vests linearly over 4 years. DAO tokens release every 6 months, and are expected to be airdropped in subsequent community airdrops to the protocol participants.