So you've done some research, discovered the power of Social Tokens, and now want to launch your own. The thing is, you have no idea how to actually do it, and you haven't found any playbook to help you with this.
Good for you. You're in the right place.
At Coinvise, we've helped dozens of creators launch their tokens and learned a lot throughout our journey. We've identified the pitfalls to avoid and learned the best tips.
This guide proposes a hand-glove design process for any creator or community leader who wants to create a social token. This document showcases the best practices to launch a token with concrete use-cases.
Note: If the main purpose of the token you want to create is to grant access to token-gated content or crowdfund a project, an NFT will be more suitable. A Social Token is mainly helpful for incentivizing collaboration, sharing governance power, or unlocking community interactions.
PART 1: It's all about Community
1.1 - Think about a flow and a digital space to host your community
Before even thinking about launching a token, it's essential to have a clear goal and create a space to host your community, the people that will help you achieve your project. The goal at this stage is to gather a small community (it can be as small as ~10 members) that genuinely believes in the project, and that is ready to help accomplish this vision without monetary rewards. You can start by inviting your friends interested in the same niche that you are, post on forums, share your vision on socials or talk directly to your community if you already have one from previous projects.
You'll have to create a space to host your community. At this stage, Telegram, Geneva, Discord, and Slack are all reasonable solutions. Think thoroughly about all the onboarding steps to make sure anyone wanting to contribute can do it easily, as it will help you attract high-quality talents. As an example, Protein's leaders have decided to host their community on Discord and ask people to fill out a form to access their community. This onboarding flow ensures they maintain the vibes in these early stages by limiting the number of new members, providing a high-level contribution to their community. On the other end, if your goal is to onboard as many people as possible, make sure to share the link to your Discord server or Telegram group everywhere you can, and start spreading the word by writing essays or posting on Twitter.
Important note: Be proactive in onboarding community members. Splitting the onboarding responsibilities with other key members of the DAO will be essential here.
1.2 - Build forth values for early community members and have a clear mission
When considering launching a token, you should make sure you've gathered a strong community toward your project first. A strong community means strong values and missions.
Creating a community in the Web3 space is first and foremost about culture, about vibing together and creating what you've always wanted to create. In DAOs, culture comes first, products and projects come second.
You can create a strong culture in your community by giving contributors ownership responsibilities over specific projects, making sure to create a group they can identify with, giving them a long-term goal in life, giving them a social status within a group etc…
You shouldn't underestimate the power of a strong culture in the success of a tokenized community.
Note: Taking the time to understand in depth what makes a good culture will be key here.
1.3 - Understand what value is stored in a token
For an efficient token launch, it's essential to understand what values are stored in a token and what you can actually do with it. This way, you'll be able to use the full power of tokens when launching yours.
A social token:
- Comes with social value - The token has a social value, and people are proud to own it as it creates status within the community. People with more tokens will have access to more content and will be admired by others in the community. The token's social value will incentivize them always to have more tokens and always put more work into your community.
- Can serve as an access pass - The token can give access to the community itself. Actually, it's one of the first utilities a token can have. By token-gating the access to your community, you'll be able to airdrop tokens to only users you want in your community.
- Is a way to incentivize people to become contributors - Users will be keen to put in some work even if they don't receive real money as they know they will share the upsides if the community succeeds. Indeed, the goal of creating a social token is to build a virtual economy where early believers and contributors can share the upsides. Contributors who help the community grow by contributing to the different projects the DAO is building are given shares, or social tokens, intending to create such an ambitious and robust community and projects that people are, later, keen to buy the token to gain access to membership-only content, perks, and voting power in the community. Instead of simply getting paid with an existing cryptocurrency (similar to a salary), contributors are incentivized to help the organization succeed, as the value of their tokens — directly correlated to the success of the project — can gain an almost infinite value.
- Facilitate coordination - By leveraging the ecosystem of tools available, you can build a robust project and community much more easily than Web2 tools. Indeed, as everything is on-chain and social tokens create trust, you can reward fairly the work with Coordinape, ensure the long-term commitment of contributors with a vesting schedule, or let anyone vote on future decisions using Snapshot.
1.4 - Figure out what value is created for co-owners
When launching a token, you always have to think about what your contributors will gain from helping you grow your community and if it's worth it for them to contribute.
For example, $GCR (Global Coin Research) token holders have access to special investment deals and premium content. $FF (Forefront) token holders have voting powers, allowing them to vote on future strategic decisions, and have access to special events and experimentations run by the DAO etc…
It is essential to create value other than financial value for token holders and implement well-designed incentives. There is only so much you can motivate someone with financial reward. A strong culture and vision can be much more useful to convince members to hold their token.
1.5 - Communicate about it and get an early interest
Finally, with a space to host people wanting to help you achieve your project, actual use-cases for your token, and strong culture, you can now start communicating about the launch of your token. A huge part of a successful token launch will come from the interest you succeed in gathering in your project's early stages.
A good practice is to tell your community first that you're going to launch a token. You can also do a snapshot of the people in the Discord before announcing it officially. This way, you'll be able to know who was there since the beginning and reward them fairly instead of rewarding people joining the Discord after the announcement just to get the airdrop.
To create awareness, a great strategy is to do an initial airdrop. Jenil Thakker successfully did it with his $JENIL token. To do so, he simply asked people to drop their ENS address in comments, then gathered them all using Anish Agnihotri'stweetdrop script and did an Airdrop using the Coinvise Airdrop tool.
A lot of people from your audience won't have a crypto wallet. We recommend you create an Airdrop and select the "Create a unique link" option directly on our platform to overcome this. This way, non-crypto native users will easily create a wallet by following a tutorial and claiming their tokens once it's done.
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Other great strategies are creating special deals, doing fun experiments, or creating content to help individuals claim tokens.
It's essential to keep in mind that in the end, token represents trust, and it should be distributed to "True fans." You can be creative here and add extra-step that proves people claiming the token are actually true fans if needed.
PART 2: Technical aspects
2.1 - Minting your Tokens - Tokenomics and treasury setup
To create a Token, anyone can head over Coinvise and mint a token in less than five minutes. You'll be the sole owner of your tokens, and we don't take any cut in the process. You can create your token on a Layer 1 (Ethereum) or on a Layer 2 (Polygon). We suggest reading more about the differences between Layer 1 and Layer 2 blockchains before minting a token. If you decide to create your token on a Layer 1 and figure out later you need to do transactions on a Layer 2, you can always bridge some tokens to make transactions at negligible costs.
I would encourage you not to put too much pressure on Tokenomics. What's most important is building a strong culture and community. Similarly than 99% of startups are failing, most DAOs won't be there long enough to have problems with their Tokenomics. I'm not saying Tokenomics isn't necessary. They are, but what's most important is having your project built.
Unfortunately, there isn't any playbook today for good Tokenomics. There are some great resources out there and good practices, but it depends on each project. For some questions such as "what's a great Total Supply" - 10M is great for most projects and has become the industry standard. For questions such as "Should I create my token on a Bonding Curve or Fixed supply" - Fixed supply is best because new DAOs rarely have a community strong enough to have many people buy the token on a Bonding Curve. Coinvise helps you create your token on a Fixed supply in less than five minutes.
If you're building a project with co-founders, you can mint a token from a Multi-signature wallet. This wallet is a crypto wallet that allows you to manage your community crypto assets with the option to require a pre-defined number of signatures to confirm transactions. That way, no one can abandon a project with all the money that has been contributed since it would require the authorization of all the other members. Simply create an account on Coinvise by using the multi-sig wallet. The tokens, once created, will be directly transferred to this account.
2.2 - Bringing value to your token
Adding value to your token is not the first thing you should do when creating one. Indeed, you should first focus on making actual use cases for your Token and gather a strong community around your project. Without a strong community, you won't increase your token's value as no one will be keen to buy it. Creating a liquidity pool is more a later stage action when you'll want to accomplish new (and maybe more significant) projects than part of the initial tasks you should make when creating a token.
You have to create a Liquidity Pool to bring value to your token. A $50k-100k is usually considered a small LP. Make sure you know what you're doing before creating one, as you can lose it all.
2.3 - Creating Quests
To incentivize community members, you can create quests. Creating quests and rewarding users with tokens is a great way to manifest positive behaviors and create a positive feedback loop for achieving communal goals and showing gratitude.
You can reward members in tokens for their initiatives, soft contributions, loyalty, and other added value forms. This creates strong value alignment and reinforces a culture of giving.
2.4 - Disincentivizing bad behaviors
When launching a token, it is essential to disincentivize bad behaviors. Bad behaviors can be negative vibes, hate messages, or speculation-focus users. To disincentivize the latter, you can create a Vesting Schedule and avoid too many members joining your community to gain and sell their tokens right away.
You can also hire moderators from your community and ban/block users with bad behaviors.