How to Design Your Blockchain Project’s Launch Mechanics
This is Part Nine in an 13-part Alpha Growth series breaking down the problems every blockchain project has and needs to solve to grow and scale. New to the series? Start here.
So you think you’re ready to launch your blockchain project? Before you go big with your first major public sale, you need to solve the next problem that every blockchain project runs into.
Problem nine: you need to get your launch mechanics right.
Your launch mechanics are crucial, bro. If you don’t get them right, here’s what will happen:
- Your token price will be trash.
- You’ll be digging yourself out of a ditch based on price alone and struggling to get enough holders.
- Unless you have enough float and volume, people won’t trade.
- With a trash price and low trading volume, partnerships will be much harder to land.
- Soon: zombie
Ending up digging yourself out of a ditch or as a zombie project is no good. Literally no one sets out to achieve this. Yet this result happens all the time. So how can you ensure your launch leads to a sustainable crypto project so everybody isn’t like, “Watch the crash on take-off.”
You need a strategy for how you’re going to stabilize your token price in the earliest days. This is the only way to achieve longevity and sustainability for the project.
Zooming out and taking a step backward, you have to build strategically towards launch at every stage. This entire series is drawn directly from the playbook we use to advise blockchain projects at Alpha Growth. If this is the first article you’re landing on from the series, I highly recommend you go back and start with Part One so you know how to:
- Find the problem you’re solving
- Build a narrative around the solution
- Secure seed funding through investors
- Build a team
- Build a community
- Create an events strategy
- Find grants and pick your chain
- Raise more funding before your TGE
If you follow Alpha Growth’s playbook up to this point, here are a few things your blockchain project will have in place before you launch:
- An MVP
- The 10–10–10 formula
- Funding that will support the launch
Don’t bypass the preparation, especially when it comes to community and building your socials to at least 10K each on email, Twitter and either Telegram or Discord.
This is your buy wall for a launch that will get your token to the public in a legal and optimal manner.
With the above in mind, you’re now ready to design your launch mechanics. Your tokenomics will determine these mechanics. In turn, the mechanics will dictate the timelines and cadence of your launch.
As part of your tokenomics, here are some questions you and your team should ask (and answer):
- How do you legally do a public sale in your country?
- What countries can you engage with?
- What are your smart contracts?
- What are your launch contracts?
- How much token will be available?
- Do you have enough money to support and sustain token price — i.e. how much capital and reserves do you have for your TGE?
- Is there enough demand through your social signals for the public price?
- Where’s the first yield mechanism going to occur?
- Where are you going to find and apply your first liquidity incentives?
- Do you have whale protection so you can provide more decentralization?
- What are your liquidity incentives?
- What’s the lockup?
- How do you plan to create consistent token optionality?
- How much float is going to be available after your launch mechanism?
- Where people are going to pool — if it’s an IDO, what DEX do you want to launch on?
- Who will you partner with at launch?
Remember, once the token is out there, people can (and will) do whatever they want with your token. They can sell it. They can bond it. They can throw it away. Unless you have whale protection, whales can control the price and dump whenever they want.
Once you’ve answered the questions above, you will likely also know which launch model makes the most sense for your project. Launch models are always evolving. They include:
- Lockdrop
- Liquidity bootstrap auction
- Initial DEX offerings (IDO)
- Dutch auctions
- Launchpads
No matter what you choose, here’s what you want: your launch mechanism should incentivize deep pools.
This is exactly why strategic mechanics like the lockdrop and the liquidity bootstrap auction — which both incentivize deep pools — are so powerful.
Along with deep pools, your launch mechanics should also incentivize:
- Distribution
- Decentralization
- Treasury backed liquidity
To dig into this further, you emphasize distribution because you want your token in the hands of as many holders as possible. Decentralization matters — in terms of tokenomics — because the way you turn a ponzi into a sustainable project and community is through more and more decentralization. The more holders, the more stability.
You also need treasury-backed liquidity. What you have been able to accomplish in terms of raising private capital will also help guide the launch mechanics of your public sale. How much are you doing via private pre-Seed and Seed rounds vs. public sales? You can’t rely on, say, IDO after IDO to support your token and keep pricing from being trash. Do that and you will devalue the reputation of your project. It will be clear that you can’t raise capital privately. Human psychology is at play here just like it is everywhere else: the more accessible the deal, the less people want the deal.
As you design your launch mechanics with long-term sustainability in mind, you’re going to need to address a new problem for your blockchain project: the ongoing need for token optionality. Guess where the answer lies? It’s all about how you utilize community and build biz dev partnerships. In Part 10 of this series, we’ll talk more about the crucial role token optionality plays in your project’s overall growth and sustainability. See you next week.
If you’re interested in learning about more growth strategies for your project, we encourage you to connect on Twitter @bryancolligan. Join our Telegram for members-only alpha on projects we’re watching and DYOR resources for creating growth, credibility and engagement for your project.
