WHALE: The First Social Token Backed By NFTs

The Vault and the WHALE Crypto Protocol

Launched in May 2020, WHALE was created by a pseudonymous non-fungible token (NFT) collector known as WhaleShark who has been collecting rare and valuable NFTs since 2019. In launching WHALE, WhaleShark sought to put his love for (and expertise in) the emerging NFT market to use by fostering a community of like-minded NFT collectors who would eventually become active members of an NFT-centric organization. By leveraging the WHALE social token  — backed by his personal collection of NFTs — WhaleShark created the first ever NFT-backed crypto token.

WHALE exists in somewhat of a middle ground between traditional cryptocurrencies (whose values rise and fall in accordance with their use and perceived market value) and stablecoins (whose values are pegged to assets held in reserve). WHALE is backed by NFTs held in “The Vault,” which is a publicly audited collection on the OpenSea NFT marketplace. The NFTs held within The Vault serve to provide the token with a base level of intrinsic value.

The WHALE Vault itself holds thousands of rare and valuable NFTs, ranging from gaming, art, and virtual real estate to other collectible assets that are expected to regularly appreciate in value due to their rareness. The Vault is regularly audited by NonFungible.com, and its contents are publicly viewable online. As of September 2021, The Vault is valued at over $47.7 million USD and contains over 13,000 individual assets; it was initially valued around $500,000. The WHALE crypto project expects The Vault to continue developing over time via organic growth, the addition of new collectibles, and the maturation of the NFT market.

WHALE Token Structure and DAO Governance

Initially, WhaleShark was solely responsible for curating the NFTs that would be the primary source of the WHALE token’s underlying value. But after launching with only a single centralized source for The Vault’s crypto custody, WHALE required a transition to a decentralized autonomous organization (DAO) in order to more effectively grow as a project. By transitioning to a DAO structure, the WHALE community could collectively decide which collectibles to buy, sell, and rent. However, due to the nascent and ongoing development of sophisticated DAO mechanisms in the crypto space as a whole, the platform faced initial limitations and barriers to its transformation. These early challenges included the technicalities of property rental and security risks when dealing with high-value assets like NFTs. However, despite initial uncertainties, the transition to the WHALE DAO eventually began in September 2020 with the express goal of enabling WHALE token holders to exercise collective control over the project’s community, budget, events, and management of assets in The Vault.

WHALE Cryptoeconomics and Distribution Model

Built with the ERC-20 token standard, WHALE tokens are primarily backed by the NFT collection stored within The Vault. The secondary value of WHALE is driven by its recognition, use cases, and trading. This model stands in contrast to the traditional model of cryptocurrency valuation, in which coins — like bitcoin (BTC)  — draw value primarily from the social acceptance and use cases of their respective underlying networks.

There is a maximum supply of 10 million WHALE tokens, allocated as follows:

• 10% set aside for the founder and founding team (vested for 24 months beginning May 2020)

• 10% set aside for a private sale (vested for 20 months)

• 42.6% distributed to the community at a rate of 40,000 WHALE per month 

• 37.4% reserved for the WHALE Foundation and vested over 120 months

The WHALE tokens allocated to community distribution can only be earned in a few limited ways, like selling NFTs to the WHALE Vault in exchange for WHALE, or participating in engagement activities held by WHALE partners. Of the 40,000 WHALE targeted toward community development each month, 25% is reserved for team and partnership stipends, 25% is used for Whale community rewards, and the remaining 50% is for “Hold-2-Play” rewards. These are distributed to WHALE crypto holders who own a minimum threshold of required WHALE tokens, which grant them access to exclusive Discord channels, events, giveaways, and more. The WHALE Foundation is a yet-to-be-named charitable trust that intends to benefit disadvantaged women and children.

WhaleShark and the WHALE token itself allegedly have no financial liabilities or sell pressure, which means that the NFTs in The Vault will likely only ever be sold at very high market rates. As of September 2021, WhaleShark claims to have never resold a single NFT or realized a single dollar of profit. Further, all revenues derived from WHALE tokens are allegedly redirected into the acquisition of more rare NFTs for The Vault.

The WHALE Community: Benefits for WHALE Token Holders

As part of the project’s community-driven ethos, WHALE holders are entitled to special platform-specific benefits, including the ability to:

• Rent NFTs from The Vault 

• Purchase selected NFTs from The Vault

• Purchase exclusive NFTs only sold for WHALE

• Participate in WHALE liquidity mining to receive rewards

• Purchase exclusive physical and digital WHALE crypto merchandise

• Vote in the project’s DAO and drive Whale community blockchain governance

• Access exclusive membership channels offering games, NFT airdrops, WHALE airdrops, networking opportunities, and lines of communication with WhaleShark

The WHALE community is largely composed of early supporters of the NFT movement. As of September 2021, there were over 16,000 members of the WHALE Discord server and almost 4,000 unique addresses holding WHALE tokens.

Although all funds derived from market making activity are used solely to purchase more valuable NFT assets for The Vault, WhaleShark himself is allegedly dedicated to using his personal WHALE token holdings to support philanthropic endeavors as well as endeavors that will help grow the WHALE community and the NFT space as a whole.

Future of the WHALE Crypto Network

Creating an ERC-20 token primarily backed by a portfolio of NFTs is an innovative concept, and the WHALE crypto project was the first to do so. However, The Vault’s value is subject to fluctuation because the value of NFTs can be highly dynamic. In other words, while the popularity and success of the NFT phenomenon is likely only just beginning, the value of particular NFTs and the asset class at large may still experience significant volatility. That said, WHALE does not intend to be a stablecoin, but rather an asset-backed social token powered by NFTs.