$UNIT Token Conversion

The end goal of staking in the Subvault is to onchain a real property.

Once a target property is identified and the Subunit community decides to move forward (via a governance vote in the property’s investment proposal), the USDC in the vault will be used to purchase that property. At that point, the staked funds get “converted” into ownership of the property. Practically, here’s what happens:

1) Subunit (through the DAO executor on behalf of the investment club) uses the pooled USDC to acquire the property off-chain, creating a legal entity (like an LLC) that holds the deed. Simultaneously, on-chain, a new token contract for that property is deployed – issuing the UNIT tokens for that property (for example, tokens representing shares of “123 Main Street LLC”, etc.).

2) Then, each STS holder is issued STS tokens for the new property’s UNIT tokens, on a pro-rata basis. This will be done automatically. The conversion rate is 1 USDC worth of STS to 1 USDC worth of property tokens. For example, if you contributed 5% of the vault’s funds that went into buying the property, you will receive 5% of the total UNIT tokens for that property.

3) Once this conversion is complete, you become a direct fractional owner of the property (via tokens). Once a property is acquired and tokens issued, any remaining vault funds will roll into the next opportunity or be withdrawable after the staking period ends. From the user perspective: after conversion, you will continue to hold the STS tokens (which now represent a lower value since USDC has been withdrawn from the Subvault to acquire the property) and you hold the UNIT property tokens, which carry governance rights and entitlement to that property’s income.