Intense Debate Surrounds Sanctum’s $CLOUD Token Sale Proposal to Defiance Capital

The blockchain community has been abuzz with discussion following Sanctum’s “Cloud 006” proposal, which involves selling 13.7 million $CLOUD tokens—roughly 5% of its community reserve—to Defiance Capital, a prominent liquidity fund. This controversial plan was introduced during Sanctum Forecast’s October 24th livestream, where Defiance Capital's Eugene and Sanctum founder FP shared details and rationale for the initiative.

The Proposal: Decoding Its Core Intentions

The “Cloud 006” proposal asks a pivotal question: Should Sanctum transfer 13.7 million $CLOUD tokens from its community reserve to Defiance Capital? This sale would constitute 5% of the reserve and is positioned as a critical decision for the project’s trajectory.

However, the proposal has sparked concerns due to procedural hiccups in the voting process. While Sanctum initially planned a seven-day voting period, technical challenges with MetaDao reduced it to just three days. The deliberation phase was omitted entirely—a departure from Sanctum's standard IDDV (deliberation–drafting–voting) framework. A representative from Sanctum explained, “Given the sensitivity surrounding the token acquisition by a liquidity fund, public deliberation could have led to frontrunning or significant price volatility for $CLOUD, potentially placing sellers at a disadvantage.”

Behind the Negotiations: How $CLOUD’s Sale Price Was Determined

Discussions between Sanctum and Defiance Capital originated in September, when $CLOUD was trading within a range of $0.10 to $0.14. The mutually agreed price of $0.12 reflects the midpoint of this range.

According to Sanctum’s team, Defiance Capital expressed willingness to pay a premium at certain points during negotiation. However, delays driven by legal reviews, KYC (Know Your Customer) processes, the Token2049 conference, and additional off-site events extended the timeline.

Sanctum emphasized the community-centered nature of the decision: “Instead of liquidating team-held tokens, which could have been faster, the project chose to rely on its community reserve—reflecting trust in community governance and confidence in Defiance Capital’s alignment with $CLOUD’s long-term vision.”

Defiance Capital’s Commitment to $CLOUD and Sanctum

Eugene, representing Defiance Capital, provided insight into their perspective as a veteran liquidity fund. Founded in 2018, Defiance Capital has supported Sanctum since its previous iteration as Socian in 2021. Their unwavering trust in $CLOUD is demonstrated by their ongoing accumulation of tokens and refusal to sell a single unit, even amid market fluctuations.

Eugene remarked, “Our belief in Sanctum as a cornerstone of the Solana ecosystem has only grown stronger. Through its liquidity staking tokens (LSTs), Sanctum powers essential liquidity engines, making $CLOUD instrumental as adoption of LST frameworks accelerates.”

He also commended Sanctum’s governance model, noting, “Transparency sets them apart from other projects that might hastily close deals without community input. Sanctum’s vote-driven process reflects their commitment to integrity, and it’s one of the qualities we hold in high regard.”

Beyond Transactions: Signaling Long-Term Trust

For both Sanctum and Defiance Capital, “Cloud 006” extends beyond a simple token transaction. Sanctum founder FP elaborated, “This is about evolving $CLOUD’s destiny from a governance token into a true ownership asset. Looking ahead, $CLOUD holders will manage emissions and USDC revenues, creating deeper alignment within the ecosystem’s financial structures.”

Eugene echoed this sentiment, explaining the importance of trust signals in blockchain projects. “Defiance’s confidence in $CLOUD sends a powerful message—not just to Sanctum’s community but to the wider market. This proposal highlights $CLOUD as a fundamental asset compatible with the emerging liquidity staking token (LST) framework.”

Governance Challenges: The Proposal as a Learning Opportunity

The rollout of the “Cloud 006” proposal has highlighted Sanctum’s willingness to innovate within governance, despite inevitable hurdles. FP acknowledged delays stemming from legal reviews and compressed timelines but deemed the community voting process a revolutionary step for blockchain fundraising.

“Unlike traditional projects that announce fundraising results after completion, Sanctum embraced full transparency by putting this OTC transaction to a community vote,” FP said. “Even if it’s rejected, there won’t be an immediate rerun. Instead, we’ll take this as an opportunity to refine governance processes for improved efficiency in the future.”

Sanctum’s leadership reiterated their commitment to respecting the community’s decision, regardless of the vote’s outcome. “This proposal has been a unique and valuable experience for us as a team. If the community opposes the sale, we are prepared to accept their decision, step back, and evolve from this.”

The Road Ahead: Implications for Sanctum and Defiance

As the vote nears completion, its result will not only influence Sanctum’s immediate financial strategy but also shape broader governance norms within the blockchain sphere. Additionally, the decision will likely impact the ongoing collaboration between Sanctum and Defiance Capital, potentially solidifying the fund’s role as a strategic partner in $CLOUD’s future.

Whether the proposal passes or fails, one thing is clear: the $CLOUD community’s role in shaping the project’s vision continues to deepen, setting new benchmarks for decentralized governance and strategic trust-building across the Web3 ecosystem.