Pre & Post-Token Generation Guidelines

The Salutary Transformation: From "Project" to Business

When you partner with Salutary, you're not updating your tokenomics, you're fundamentally reengineering your token into a completely different asset class. It transforms from a speculative meme into a legitimate business instrument with enforceable change-of-control mechanics. This transformation requires the same strategic thinking that guides IPOs, corporate M&A transactions, and institutional capital raises. On this day, you cease being a crypto "project", and become a crypto business. Like a coin Quinceañera, or a token bar mitzvah.

The way you treat and distribute this enforceable business asset should be pragmatically rooted in what makes the most sense for your company. You should not be anchoring to how other DeFi “projects” do it, but rather how other businesses do so.

Your token is an institutionally legible asset with real rights, your competition’s coin is not. Despite both of these being tokens they should be treated dramatically differently, because they do dramatically different things. All tokens are not created equally.

A Business Mentality

This guideline is designed to help partners architect token distribution and equity consistent with their Salutary token. Including:

• Pre-TGE: architect a company-minded distribution from day one

• Post-TGE: you can recapitalize and align current holders with the token’s new controlling power. Core themes include cap-table discipline, thoughtfully set change-of-control (COC) thresholds, and transparent communication.

• Managing Equity: we will review how equity is impacted by Salutary involvement and offer guidance on how to navigate it.

We do not tell partners how to manage their business or how to distribute/use their token. However, owners should treat their token significantly more seriously once Salutary partnership is in place.

For example: the notion of a “fair launch” is not an applicable concept for a valuable asset with enforcement rights. What business “fair launches” their debt, equity, or any other asset of worth? Do they hand out their equity if you use their service? Of course not. If you're crypto native, this guide will help you recalibrate how to handle a valuable business asset. Valuable resources are distributed with intention and careful calculation, not as marketing promotions.

Table of Contents

1. The Salutary Transformation: From Project to Business

2. Pre-TGE: Optimizing from Day 1

3. Post-TGE: The Recapitalization Opportunity

4. Addressing and Managing Equity

5. Rights Offering Support

6. Special Considerations by Sector and Scenarios

7. Legal & Compliance Considerations

8. Implementation Support & Resources

Terms:

• Token Generation Event (TGE): the issuance of your token. Similar to an IPO for stock

• “Change of control” (COC): a Salutary M&A event where an investor accumulates enough token to acquire control of the business

• Rights offering: when a company gives existing shareholders or tokenholders the right to purchase additional shares/tokens, often at a discount, typically in proportion to their current holdings within a specified time frame.

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The Salutary Transformation: From Project to Business

Key Transformations:

• From emission vehicle → control instrument

• From speculation → fundamentals alignment  

• From fair launch → strategic capitalization

• From suggestion token → enforceable voting token

The result: a token that can command and express real business fundamentals, satisfy institutional diligence, and protect minority holders - without sacrificing the owner’s strategic vision.

Key Differences

Traditional Tokens:

• Trade on speculation and reflect no fundamentals. They're not investable.

• Marketing tools

• Governance theater, tokens only issue suggestions

• Emission-based distribution

• No enforcement mechanisms

• Value disconnected from business fundamentals, token has no control over company

Salutary Tokens:

• Business control instruments

• Enforceable M&A rights. The tokens issue votes, not suggestions.

• Institutionally ownable

• Strategic capitalization

• Legally enforceable corporate actions

• Token value tethered to business fundamentals through enforceable control over company

Salutary provides the framework; you maintain complete control over implementation. We're here to guide, not dictate, how you manage your token. We enforce M&A events and financial auditing, not cap tables. The distribution of the token is ultimately up to the founder and team.

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NOTE: Salutary tokens are “change-of-control” governance instruments. They confer no rights to profits, dividends, or revenue. Market pricing may not correlate with business performance. Any value is determined by market forces and is not guaranteed by Salutary or partners. Nothing herein constitutes legal, financial, or investment advice. All disputes are subject to individual SIAC arbitration; class or representative actions are waived.

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Pre-TGE Implementation: Optimizing from Day 1

If you haven't launched your token yet, you can architect the distribution with its valuable nature in mind from the very start.

Key Considerations for Pre-TGE Companies:

CRITICAL DISTINCTION: An asset with enforceable control abilities over a company should be distributed strategically. Your token is not emission candy or a trading bean, approach it like a cap table, not an airdrop event.

Traditional DeFi distribution models are incompatible with control-bearing assets. Note that no company does a "community distribution" or "fair launch" of its stock or debt. Real assets that are worth something are subject to allocations that reflect their value: they aren't just handed out as a thank you or participation prize. DeFi token distributions look the way they do because the assets are unserious - we encourage you to not anchor to what other projects are doing when deciding what's best for your business.

Your point of reference should be how companies manage their business assets, not how DeFi projects do.

Design your token allocations with control and ownership in mind. Think like a PE firm, not a Pancake Swap farmer.

• Consider how much token is tradable relative to the Salutary COC threshold (e.g. if your float is 40% and the COC figure is 51%, you can’t get acquired).

• Plan for long-term value creation, not short-term emissions

DO NOT anchor to the token distribution models/schedules of other DeFi projects 

• DeFi token distributions look the way they do because the token has no enforceable rights or value accrual, so it is often handed out frivolously.

• A Salutary token effects enforceable control over the issuing business. You have an institutional-grade asset, they do not.

• Your point of reference for your high-value coin should not be what the low-value coin people are doing.

• High-time-preference mercenaries and extractive retail hordes with minimal financial acumen should not be guiding company decision making, and unfortunately DeFi is awash in these types. Root decisions in what’s best for the business, don’t pander to ulterior-motive vibes-based myopia.

That being said, it is ultimately your choice. These are Salutary guidelines, not rules.


Set acquisition thresholds thoughtfully 

• Work with Salutary to determine the right COC percentage

• Balance between accessibility and protection

• Remember: this threshold is where a COC event can occur. Keep company token ownership, float, and distribution schedules in mind when you set the COC threshold.

Tip: build a simple cap-table matrix that shows founder holdings, treasury, investor allocations, and public float versus proposed COC %. This helps visualize distributions.

Treat Salutary tokens like a business treats its equity

2. • Team/advisor allocations should reflect long-term alignment

   • Treasury management and token-based compensation should reflect the value of the asset relative to the business.

Treasury management considerations:

• Maintain sufficient tokens for strategic initiatives

• Plan for future capital needs without excessively diluting control

• Treat tokens like a high-value asset that you would be wise to not just casually mint (though you can mint more as you please, same as a company can issue more stock).

Bottom Line: Plan your token launch with the same caution and considerations that a company takes when it IPOs. Keep the vectors of accountability in mind, just like any company does when it issues a business asset.

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Post-TGE Implementation: The Recapitalization Opportunity

Your token is already live. Maybe it's widely distributed. Maybe it's concentrated. Maybe it's somewhere in between. Your old token was a marketing tool, your new Salutary token is an institutional-grade asset. This fundamental shift may warrant recalibrating who holds it and in what quantity.

Step 1: Assess Your Current Distribution

• Review existing tokenholders and concentrations

• Map strategic holders and assess whether their incentives align with long-term value creation.

  • Ask yourself: are these holders helping or hurting me? What obligations do I have to them? Do I want them possessing material control in my business?

• Consider if current distribution aligns with an M&A-enabled asset.

Step 2: Design Your Rights Offering

If you’d like to bring along previous tokenholders and convert their positions to Salutary tokens, you are welcome to do so. It's totally up to you. We can accomplish this via a standard approach: a rights offering.

A. Fractional Conversion

Example: A 10:1 ratio would mean 10 old tokens → 1 Salutary token.

The token is now a premium asset that warrants unique consideration. Here are some guidelines on conversion figures and tokenholder reactions:

• Tokenholders previously held a valueless token, they now hold a substantive one. Sophisticated holders should not get distracted with nominal figures.

• For example: Would you rather own 10 units of vapor or one unit of gold? 5% of a trading bean or 1% of an M&A-enabled control stake? This framing can help illustrate how less is more when Salutary is involved.

• How you communicate this is up to you. We are happy to help with any marketing and community relations.

• The introduction of Salutary is a remarkably positive thing for tokenholders! They now own the only enforceable, rights-bearing asset in DeFi!

• Emphasize: even if the old token and new Salutary token have the same ticker symbol, they are two totally different assets.

Salutary is an exciting positive for tokenholders and community members. Once they internalize what’s happened, our involvement should be greeted with open arms. 

B. Selective Rights Offering

• Offer conversion rights to specific holder classes, or everyone. It's your call.

• Could favor long-term holders or strategic partners

• Maintains founder flexibility

• Consider who’s helping you, who’s not, and your obligations to them

C. Full 1:1 Migration

• Maintains exact distribution, likely only suitable to companies that solely had tokens and no preexisting equity (more details on this in next section).

• Consider if your distribution suits a token that is now an enforceable acquisition vehicle prior to selecting this option. If it does, you can leave things the way they are and don't need to issue a new token, you can simply turn the old token into a Salutary one.

Key Considerations for Preexisting Tokenholders:

• Communicate the transformation clearly. You now own an institutional-grade control asset. You have enforceable tokenholder rights. Fundamentals are now relevant. This is a great thing for you! Salutary will help with this messaging.

• Offer conversion rights as you see fit and explain the logic behind it

• Set transparent deadlines and terms

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Addressing and Managing Equity

Equity becomes effectively marginalized with Salutary. There is no way around this.

The Salutary token effects legal control over the business and its assets, whereas previously this was the equity’s domain. Stock ranks contractually junior to Salutary tokens for all M&A and business control purposes. We will require all 10%+ stockholders to endorse this in the Salutary MSEA during onboarding. No one will be able to encumber anything related to COC events. The equity is a second‑class citizen with Salutary. 

Considerations:

• • You don’t have to eliminate your equity with Salutary, however it will become less valuable and legally subordinate to the Salutary token.

  • What Salutary recommends: eliminate the equity and provide a rights offering to all shareholders that allows them to maintain pro rata holdings in the new Salutary token. Convert all preexisting tokens and equity to one instrument: the Salutary token.

  • For equity conversion: existing shareholders can be offered proportional conversion to Salutary tokens, less the amount you allocate to previous tokenholders.

  • Keep in mind: any Salutary tokens allocated to the community will be coming out of the same pool as pre-existing equity holders.

    • For example: if five people owned 100% of the equity, those same five can only own 80% of the new Salutary token if you want 20% to go to the community. If you have questions around this, we are happy to break it down on a call.

• Everyone is now aligned on the same business instrument reflecting the success of the company: the Salutary token. No more competing incentives between token and stock.

Note: equity and token are necessarily cannibalistic of each other

• You are going to have to pick one in respect to value accrual: token or stock?

• You cannot have two different assets equally reflect the fundamental value of your business.

• We are happy to break this down further for founders on a call if they want to better understand the mechanical contradiction between token and stock.

For SAFE/SAFT setups:

If a SAFE is involved, you may still issue the shares promised and then attach a conversion right that lets them convert into Salutary tokens at a ratio of your choosing. You have an opportunity to clean up the cap table, use it wisely and compliantly.

Note: Business owners always have the ability to issue more Salutary tokens as they see fit, just keep in mind what this does to the float and COC thresholds. The same way a company can issue more stock to finance itself, you can always issue more Salutary tokens.

Summarized Equity Options:

• Provide a rights offering to convert both equity and old token → Salutary tokens

• For SAFEs: Provide conversion rights when equity is issued

• Conversion ratios are entirely at founder/owner discretion

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Rights Offering Framework

What Salutary Provides:

• Guidance on implementation

• Communication and marketing support

• Zero mandates on structure

What Founders Control:

• Conversion ratios

• Eligible participants

• Timeline and deadlines

• Special terms, ratios, or conditions

• Whether to do it at all

Special Considerations

For Crypto Businesses:

• Consider how existing distributions comport with COC thresholds

• Consider higher or select conversion ratios to filter for longer-term, fundamentals-oriented holders.

• Think about how you'll conduct strategic issuance of tokens in the future (eg for new hires, funding growth, etc.) and keep a healthy amount in your treasury to facilitate this.

For Real-World Asset Businesses (small business, IP, etc.):

• Existing equity may need special treatment to accommodate Salutary, we encourage eliminating it

• Regulatory considerations may influence how you structure your Salutary offering. For example, if you opt for a Reg D issuance of Salutary tokens (something we support) you will have certain constraints on who can access the token, and when.

• Traditional investor education likely required (Salutary will help here)

For Gaming/Consumer Companies:

• Large user bases may warrant tiered conversion options

• Consider loyalty rewards in conversion ratios

• Community communication is critical (this is always the case, but even moreso when you have a large retail audience)

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Legal & Compliance

Unlike other sections in this document, the following are not guidelines, they are requirements.

Both Salutary and our partners must always keep regulations in mind and use language that adheres to the following:

• Clear disclosure of change-of-control mechanics

• No promises of profit or dividend rights. Salutary tokens are officially and technically not equity; we cannot describe them as this for both compliance and liability purposes.

• Compliance with local jurisdiction requirements (this is partner specific and something we will discuss with your counsel, as needed.)

Documentation Requirements

• Updated docs/token terms incorporating the Salutary framework

• Clear communication to existing holders consistent with Salutary compliant language

• Regulatory filings as required by jurisdiction (we don't impose this on you, but your country of incorporation may).

• Integration and linking to the Salutary Master Services & Enforcement Agreement so tokenholders can see all explicit terms and conditions consistent with token ownership.

Risk Disclosures

All major token-related communications must include:

• Clear articulation of Salutary mechanics (or link to them)

• Market risk acknowledgments

• No guarantee of market price correlation

• Enforcement limitation disclosures

Salutary will assist with these efforts and provide partners with all the resources they need here.

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Embodying Excellence

Incorporating Salutary represents a business transformation. Your token evolves into a fundamentals-aligned business-control asset. This shift is profound and should warrant recalibrating your approach to token distribution and management. Remember, just because it has the same ticker symbol does not mean it’s the same asset anymore!

Concluding, Takeaways to Keep in Mind:

• Pre-TGE: build it right from the start

• Post-TGE: get a unique "do-over" opportunity

• Every decision about implementation remains yours

• Strategic Vision: Approach token distribution with the sophistication of an IPO

• Clear Communication: Educate stakeholders on the fundamental value proposition

• Long-Term Focus: Optimize for sustainable business operations, not short sentiments

Whether you maintain your current structure or completely revamp your cap table, Salutary adapts to your vision. We're not here to tell you how to run your business, we're here to make your token represent your business.

Every company situation is unique, and your token transformation should reflect that. Your token is graduating, how you dress it for the ceremony is entirely up to you!

Ready to level up and attract institutional attention? Contact us here.

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RISK DISCLOSURES & DISCLAIMERS

Salutary tokens are "change-of-control" governance instruments that may, at predefined thresholds, facilitate an enforceable transfer of business assets. They do not confer any rights to profit participation, dividends, revenue shares, or any guarantee of market valuations. Neither Salutary nor its partners make any representation that token price will correlate with business performance. Market pricing is determined by independent actors and may not reflect intrinsic value.

Enforcement of acquisition events remains subject to applicable law, commercial feasibility, and jurisdictional constraints. Salutary reserves sole discretion in selecting enforcement methodology based on cost-effectiveness and legal practicability. No guarantee of successful enforcement exists in all jurisdictions. If enforcement actions prove unlawful, expose the company or its principals to disproportionate risk, or become economically impracticable, Salutary reserves sole discretion to suspend, modify, or decline proceedings.

All disputes arising under this Framework are subject to individual arbitration under SIAC Rules in Singapore. Class, collective, or representative actions are expressly waived.

Salutary provides administrative enforcement services only and exercises no investment discretion, custody functions, or fiduciary duties toward any party. The Parties agree that neither Salutary nor any vehicle formed under partnership is intended to be, or shall be deemed, an “investment company” within the meaning of the U.S. Investment Company Act of 1940.

Salutary does not undertake, and Partner expressly disclaims any expectation of, fiduciary duties, or advisory services regarding regulatory compliance, business strategy, tax strategy, or legal guidance. Salutary does not provide digital payment token services as defined under Singapore Payment Services Act. All token-related activities remain solely with Partner. Salutary does not provide financial advice under the Singapore Financial Advisers Act or Securities and Futures Act. All investment decisions remain with relevant parties.

This information is for educational purposes and is not an offer of securities nor is it legal or tax advice. Tokenholders should consult their own advisors regarding the implications of any acquisition event.

Any protections described herein are contractual governance mechanisms, not guarantees of economic outcome. They are designed to create procedural fairness and transparent processes, not to ensure any particular market result or token valuation.

Salutary documentation may contain forward-looking statements regarding potential acquisition scenarios and enforcement mechanisms. Actual results may differ materially due to factors beyond Salutary's control.

This document is proprietary to Salutary Pte. Ltd. and subject to the terms of the Master Services & Enforcement Agreement.

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Additional documentation found here.