Sample term sheet review: GSR and Stargate
A paid review takes the market-making terms you were offered and returns, in writing: what the option is worth to the desk under several outcomes, how the terms compare with deals that became public, and which clauses to negotiate. This sample uses a real deal whose terms are public, so every input can be checked.
The terms as recorded
- Parties: GSR (market maker) and Stargate (STG), 2022.
- Loan: 8,000,000 STG lent to the market maker.
- Term: 24 months.
- Option: a European call to buy the full amount at an average price above $1.15.
Source grade 4: recorded from the Wallfacer DAO Deal Tracker; the original Stargate governance post could not be located, so we do not grade it 5.
Assumption for this review: we treat $1.15 as the exercise price. "Average price above $1.15" suggests an averaging window that the public record does not describe. In a real review that window is the first thing we would ask for, because it can move the payoff a lot.
1. What the option is worth to the desk
Intrinsic value at expiry: 8,000,000 tokens times the amount the STG price exceeds $1.15, or zero below it. The prices below are scenarios, not forecasts.
| STG price at expiry | Desk's option value |
|---|---|
| $1.00 | $0 |
| $1.15 | $0 |
| $1.50 | $2,800,000 |
| $2.00 | $6,800,000 |
| $3.00 | $14,800,000 |
For scale, the one fully priced public alternative from the same firm: GSR's 2022 proposal to Stake DAO charged a $100,000 setup fee and a $20,000 monthly retainer. Over the same 24 months that is $580,000, a fixed cost with no share in the upside.
2. How the terms compare
- BetterEuropean exercise. The option can be exercised only at expiry, not on whichever day the price spikes. Across the deals we track this is the single most issuer-friendly clause, and most loan-plus-option deals do not have it.
- AskTerm of 24 months. The median term across roughly 40 public DAO deals is 12 months. A longer term gives the desk more time for the price to clear the strike, which raises the option's value to them.
- AskStrike. Public deals commonly set the strike 25% to 100% above the TGE price, median 50%. Whether $1.15 is generous or tight depends on the reference price on signing, which is not in the public record.
3. Clauses we would negotiate
- Define the averaging window behind "average price above $1.15" in writing: which venues, how many days, and who calculates it.
- Shorten the term to 12 months, or add a step-up in strike for the second year.
- Add measurable obligations: maximum spread, minimum depth at 2% from mid, uptime, and a weekly report from the desk.
- State how and when the 8,000,000 STG are returned if the option is not exercised, and what happens if the desk breaches its obligations.
- Cap the share of daily volume the desk may sell from the loaned tokens.
Sources used in this review
- GSR and Stargate terms: Wallfacer DAO Deal Tracker, grade 4.
- GSR fees in public governance: GSR proposal to Stake DAO, grade 5.
- Strike ranges and median term across public DAO deals: WuBlockchain cross-checked against the Wallfacer tracker, grade 4.
Intrinsic value at expiry, not an option premium: it ignores volatility, the desk's own trading and anything else the full agreement adds. A written comparison against public data, not legal or investment advice.
Your market-maker term sheet reviewed this way, in writing, within 48 hours. Smaller question? A listing offer check is $79.