The Lithium Virtuous Cycle: How Our Funds Drive Growth Without Marketing Spend
Why spending on marketing in early-crypto is bad, and what we do instead.
We just closed our Fund II community raise at around $330k. This fund will unlock a tonne of value for the Lithium ecosystem.
These funds will drive token growth, product growth, and, of course, success of our Launchpad.
It’s the ultimate organic growth engine. Pure token growth, without marketing spend.
In order to understand how the fund is so pivotal, I took to Twitter to draw a rough diagram showing the Lithium virtuous cycle.
I’ve tidied up this diagram, and in this article I want to explain to you how Lithium will drive token growth with minimal marketing spend.
More Fund Investors To Better Launchpad Projects
The key value prop of our incubator is that we will provide startups with seed capital ($10k-100k) in order to make sure their launch has the greatest chance of success. Having seed capital to build out a proof of concept, and to leverage marketing to build a community can be a huge help to fledgling teams.
More cash in our directional funds means we have more cash to invest in incubator companies, these incubator companies come through our Launchpad, therefore we have better Launchpad projects. A win-win for investors and startups.
Better Launchpad Projects To More Airdrops
More Launchpad projects equal more airdrops. Lithium takes 1% of the initial token supply from Launchpad projects to distribute amongst our community. Strategist holders and above will be airdropped a portion of this 1% of airdrop tokens, helping them build a source of completely passive income.
To read more about airdrops at Lithium, check out this article.
Better Launchpad Projects To More Exposure
Crypto marketing is expensive, and often unsustainable. Spending cash on influencers too often results in pump and dumps. Tens of thousands of dev wallet cash can be spent with no upside if crypto startups aren’t incredibly clued up with how they are spending cash.
Through our Launchpad projects, Lithium get an organic source of exposure — exposure via the Launchpad startup themselves. Every Launchpad project that comes through Lithium will exposure their community to Lithium. They will join our Telegram to understand how our Tiers for private sales work. They will engage with our community. They will get to understand our vision and our founding team. Ultimately, they will cause an increased demand for our token, which we will explore later.
More Airdrops To More Token Holders
As $EBSC holders start to see the result of real passive income through Airdrops, they will inevitably inform their network. Early adopters who got the $EBSC token at a cheap price will see that their airdrop rewards are significant compared to their initial investment in the token.
Once this realisation is made, existing holders will look to buy more tokens, before the price increases, and new token holders will buy tokens in order to get a piece of the action.
More Airdrops & More Exposure To More Token Holders (Higher Token Price)
More exposure from our Launchpad projects will cause an increase in demand for the $EBSC token. Invested interested in the Launchpad project will acquire $EBSC to take part in private sales. Of course, some investors will choose to just hold the token to take part in specific private sales, but others, understanding the vision of the project, and excited by our roadmap of launches will choose to hold onto their tokens.
Likewise, more investors buying $EBSC for airdrops will lead to a higher token price, due to increased demand. Airdrops are only of value to longer-term holders, so there is an incentive build into the airdrop model to prevent churn.
More Token Holders To Better Product
The more token holders we have, the higher the marketcap of the token. The higher the marketcap, the larger the value of the dev wallet in dollars terms. More dollars available means more resource to build out our product.
These funds could be used on iterating on our core offering or even to innovate a completely new business model, for example productising our Fund offerings.
Better Product To Better Launchpad Projects
The better our product is, in terms of usability, functionality and protocols offered, the more, and higher quality startups we can attract.
More Token Holders to More Fund Investors
As token holders increase, so does the community. An engaged community is what drives investment into the funds, as we can see from the recent success of Fund II.
It should also be mentioned here that as people start to see the returns on Fund II, this will cause a social proof effect, where investors who aren’t in the ‘innovator’ class of the innovation adoption lifecycle will get involved in the funds. We think our next Fund — Fund III will have appeal to ‘Early Adopters’ as well, which should increase the market potential 5 fold (2.5% to 13.5%). Of course, there will also be reinvestment of profits from Fund II holders, which means it’s not a stretch to think Fund III could be 10x the starting capital of Fund II.
Hopefully, this article makes clear why, by focusing on our Funds and Launchpad (read products) and not just throwing cash at marketing, Lithium is building an organic, self-sustaining growth engine.
Patience is not simply the ability to wait, it’s how we behave as we are waiting.