Pylon and the Golden Armada: The Evolution of Venture Capital
The current state of DeFi is dominated by a farming craze: tens of billions of dollars spread across pools and liquidity pairs incentivized by governance tokens and (more often) “foodcoin” memes that pull the plug as quickly as they were conceived.
A lot of capital is switching hands and a lot of money is being made (and lost), but none of it translates into any real value. Ponzi games playing into the greater fuel theory is certainly not the pinnacle of DeFi and yield farming. What if there was a way to leverage these billions to build out something bigger? Pylon has a solution.
What is Pylon?
Before we can get into what makes Pylon so special, let’s take some time to understand what exactly the project aspires to be.
At its core, the Pylon team claims to be long-time miners that own and operate a multi-million dollar mining facility in North America (more specifically, speculated to operate in North Carolina). They’ve stated that they are a no-KYC mining rental facility. As I understand it, unrented mining rigs are used to mine Ethereum, and at current gas prices, are generating upwards of 200% ROI per year.
The team is anonymous, and there is no 100% irrefutable confirmation that their claims are accurate. They’ve posted countless videos and watermarked timestamped images of the facility and their faces, which you can find in the media tab of their Telegram. After extensive research into the information provided, cursory detective work, and tracking owner wallets on Etherscan, I have sufficient confidence that the team checks out, but I will not outline my case here. I’ve compiled this information in the private JEFF Group Discord. Visit my public Telegram if you’d like more info, or do your own research and come to the conclusion yourself.
As far as the project itself, there is a total supply of roughly 7,700 Pylon. No more may ever be created. There are currently two other tokens in the ecosystem: Solarite (which is live) and Kassia (yet to be released). Pylon is the key to the ecosystem and grants revenue rights to GPU miner revenue. Solarite plays a similar role in a prospective solar energy farm, and Kassia will correspond similarly to a real estate branch.
Each of these tokens are fair launch only. There is no token sale, the team has not raised any money… in the traditional sense.
Pylon Funding Model
The existing $20 million-plus mining farm doesn’t immediately share revenue with Pylon holders. The project is generating capital through the current Solarite pools, which will be used to expand existing operations. These new mining rig purchase and installations will send revenue directly to Pylon holders.
As mentioned above, Pylon is not raising any money through a direct token sale. Pylon tokens were farmed over the course of a 10-day period across a handful of different pools. 100% of withdrawals and Pylon accumulation was retained by farmers.
However, this second token, Solarite, is set up a bit differently. It is similarly distributed 100% to farming pools (across a 30-day period, this time) but these pools carry a 1% fee on principal and 20% performance fee on Solarite harvested. These fees are used to build out additional GPU rigs, whose revenue is delivered to Pylon holders.
In Less than two days, Solarite pools have generated close to a million dollars in capital. Again, there was no token sale, nobody is forfeiting their dollars. I’ve personally been farming since day one (46 hours ago) and have cashed it enough Solarite for 10% ROI after paying gas and fees. Pylon is accumulating capital, and the “investors” are earning immediate returns for their participation.
The pools are recursive: Solarite pools fund Pylon. Kassia pools fund Solarite. The next crystal core will fund Kassia. It all flows back to Pylon, and capital continues to flow in as these pools continue to operate.
The initial goal with Solarite is $2 million dollars in capital accrued from fees. $2 million dollars worth of mining units earning (conservatively) 100% APY translates to about $260 in dividends per Pylon per year. And that’s just the beginning.
That $260 per pylon does not include the APY from Solarite/Kassia/etc. pools. All my Solarite involvements are based in Pylon, and I’ve already gotten 10% from that in under 2 days. If Solarite pools continue to generate capital at the same rate, they will generate roughly $12 million. That’s close to $1600 per Pylon per year (conservatively) plus Solarite returns plus Kassia returns plus XYZ returns. Oh, and don’t forget the additional drip from Solarite and Kassia revenue sharing. As mentioned above, it’s all recursive. It all flows back to Pylon.
Once these additional mining rigs are built out, a “Pylon vault” pool will be created, and Revenue will drip to Pylon holders that opt-in to the vault. The team estimates this should be in production within six months. Given their mantra of “undersell, outperform”, that timeline could be reduced further.
Looking at the numbers, it does sound too good to be true. A <$5 million market cap fair launched token granting revenue rights to an existing multi-million dollar mining facility that is also passively generating millions in capital with minimal risk plus instant returns to funders.
But it doesn’t have to be, once you understand the Pylon model and why it’s going to kill early stage Venture Capital as we know it.
The Evolution of Seed Funding as We Know It
In the traditional world of finance, certain Venture Capital firms specialize in early-stage seed funding of start up businesses. The VC firm operates as follows:
- Vet potential projects to the best of their abilities
- Allocate large sums of money for them to build out the company they envision
- Earn huge returns (10x and potentially much more more) if the investment plays out and the company is successful
Almost always, the startup never comes to fruition, and the VC firm loses their investment altogether. This model is fine enough, a decent vetting process means the VC still profits even though 90% of start ups do fail. And legitimate entrepreneurs can build out their grand plans that they may have been unable to support on their own dime.
But the VC loses a lot of money a lot of the time. And a number of potentially successful startups never get the greenlight for funding. Pylon’s farm-fee model for seed capital generation eliminates both of these shortcomings.
Companies can offer up tokens representing revenue rights or governance votes in a permissionless capacity that opens them to the widest audience of investors possible.
Investors can place bets and speculate on these companies without risking their principal (beyond the 1% fee) if the project never plays out.
Pylon leverages farming pools to eliminate the risk and cost in a VC environment known for massive risk and huge costs. If successful, the Pylon fundraising model revolutionizes early stage seed investing as we know it. If successful, everyone will adopt this model.
The Golden Armada is Real
Immediately, the successful build-out of additional mining rigs, a solar farm, and real estate enterprises makes Pylon a massively undervalued project that will make everyone in it now very happy campers.
But the real killer app is the broader “Golden Armada” that the team throws around. The idea that they can port other projects as “Pylon spin-offs” that similar raise capital with minute fees from farming pools. And like I said earlier, it all flows back to Pylon.
Immediately, new projects that join the ecosystem represent new farming opportunities for Pylon holders. And beyond that, it also ensures that a portion of their ownership/revenue is retained by the Pylon ecosystem, which continues to reward Pylon holders further as those startups generate revenue.
And in the future, if it all plays out how it could, it means that Pylon holders have a universal key that plugs them as backers of whichever new startup they are interested in.
I want to make this as abundantly clear as possible: This new standard for seed funding is, undoubtedly, the killer app that comes out of the current DeFi craze, and Pylon might just be the project that makes it possible.