A Better Kind of Token Sale: Whitelists, Fairness, and Community Driven Decisions

Mitchell Loureiro
Jul 28, 2017 · 6 min read

The Santiment token sale has been closed for 25 days now. Once again, thank you to everyone who participated. We’ve since then shifted our entire focus to product and datafeed development, but before we start diving into the tech (which will begin this summer) we’d like to recap the Santiment token sale.

We wanted to ensure a fair token sale by allowing as many people as possible to participate, while keeping the market cap as low as possible — which we did succeed in doing. Following the token sale, we have received strong feedback from the community as well as several inquiries from other projects regarding our token sale model and how we managed it. In this post, we will go through the details and share our experience, which we hope the Ethereum community (and crypto in general) will benefit from.

To start, our token sale goals were crystal clear. We wanted to…

  1. Achieve a wide distribution with as many participants as possible.
  2. Ensure that participants were as high quality as possible, for data collection purposes.
  3. Avoid having any large or unknown token holders.
  4. Avoid putting stress on the Ethereum network.
  5. Minimize stress for participants and help them make confident decisions.

While it can be challenging, we did manage to achieve the above objectives by doing the following:

  1. Implement a 3-tiered structure & whitelist, that required some form of registration beforehand.
  2. Leveling the playing field by eliminating discounts altogether. We also eliminated token sale bounties, which we thought would not add much value to Santiment’s community.
  3. Collective voting via smart contract to align Santiment with the will of the community.

Let’s dive into each of them.

The Santiment Tier Structure and Whitelist

The tier structure and whitelist were highly instrumental in achieving our goals as it allowed us to be selective of whom to guarantee entry into the Santiment token sale. By making access to the Santiment token sale dependent on your place in the tiers with increasing burdens, we ensured that only the most interested and supportive community members were able to gain access.

The Santiment token sale was split into 3 tiers:

  1. The Community Tier
  2. The Cofound.it Priority Pass Tier
  3. The Public Tier

Up to 75% of the token sale were portioned to the Community Tier, while a minimum of 25% of the token sale were portioned to our partners with the Cofound.it Priority Pass Tier. Any unclaimed tokens would cascade through the tiers, going from the Community to Cofound.it and finally, to the Public.

This structure encouraged committed believers in the project to sign up early and lock in their support. Those who were merely looking to flip SAN for a quick profit were confronted with a painful barrier to entry, and an obligation to commit their ETH in the token sale or risk losing their place in the early tier.

Those who researched and followed Santiment closely would also notice the difference between the Community Tier and the Cofound.it Tier; Whereas community members were guaranteed entry, the Cofound.it community would have to vie for a spot. In turn, both Cofound.it and the Community were ahead of the public. This gave those that were watching carefully an information edge, as they were able to enter into the whitelist and guarantee their entry before everyone else.

The result of using this structure was amazing. The bulk of our early supporters pledged their ETH in advance of the token sale, with more than 95% of the community portion fulfilled in the 24hr Community Tier. This ensured that the vast majority of Santiment’s contributors were committed and will be long term supporters. The final 25% of the tokens, being reserved for our Cofound.it partners, were claimed in less than 60 seconds. All things considered, the Santiment token sale ended up being massively oversubscribed.

The whitelist in the Community Tier alone had a demand of over 55,000 ETH (which we had to lower to fulfill our Cofound.it agreements). The additional unsatisfied demand from Cofound.it participants and the public amounted to an addition of more than 50,000 ETH.

By releasing the whitelist in advance of the token sale, we were also able to gauge the level of community interest. This made planning the token sale marketing dramatically easier, and allowed us to save money that is now being invested into product development instead.

Use our whitelist process for your own sale

If you would like to use this whitelist, you’re welcomed to! It both reduces strain on the Ethereum network, guarantees your community entry, and allows you to gauge interest in advance. Here’s how we constructed ours.

The whitelist has several components. First, a Google form was created with all the information we needed to capture:

  1. Email Address
  2. Slack Handle
  3. Minimum and Maximum ETH Amount
  4. ETH Address

We made it clear that whatever minimum and maximum amounts a participant specified here, it will be adhered to. In this way we committed potential supporters to quantified amounts in advance. If a whitelist participant decided that they didn’t want to be bound to their entry — that was fine, they’d just lose their spot in the community tier. This made people think carefully about their entries in the first place… essentially they had to decide if they really believed in Santiment, and how much (as measured in ETH) in advance.

Both the tier and the whitelisting process are in our public smart contract. You’re welcome to take any part of it for yourself to use it as you see fit!


A Level Playing Field: No Discounts, No Bounties

There’s an intrinsic uncertainty in token sales of all kinds… you’re never 100% certain of how the crowd will respond. That’s why many teams design mechanisms to create the fear of missing out (FOMO) and incentivize rapid participation. Often, this is done with discounts and bounties. Instead, Santiment avoided all of these means.

First of all, we believed the tier structure and whitelists were sufficient incentives to get people moving. But what really surprised people was that we did not use bounties or discounts. Let’s dive into each.

Bounties are an interesting mechanism in crypto because they can be fundamentally useful. They both widen the distribution and spread the word. The only problem is that they don’t necessarily do a good job of that. With Santiment, we concluded that maintaining a clean bounty program would be so challenging that we should invest ourselves into other strategies instead. This meant that any and all of the promotions you saw for Santiment were of high quality and organic — which proved to be a major boon over the months.

Second, on discounts, there were almost no discounts given beyond our strategic partners and presale participants. This produced an interesting psychology in the team by aligning our incentives with the the small pool of community supporters in Tier 1. In the Santiment token sale, everyone competed on a level playing field.

Collective Voting via Smart Contract

This is not widely known, but we ran a private channel with some of our earliest supporters (both contributors and community members) to stay in touch. This provided a way for our early community members to discuss our progress anytime and to get involved along the way.

This kept our supporters up to date and lets us make changes fast with the support of our community. This is especially important when it came to product changes and minimizing the cap. Our community was instrumental in expanding Santiment beyond merely crowd sentiment tools and towards crypto-market data generally. They played an even more important role in discussing with us how best to minimize the cap, which we ultimately did via a smart contract vote.

If you would like to see the voting contract, you can check out the code for yourself:


By tying ourselves so closely to our community, we were given insights that would have otherwise been money, and a great deal of time and money was saved.

Lessons Learned: Community, Community, Community

The common theme running through Santiment and our token sale has been the focus on our community. Without our community, Santiment would not be possible. This same lesson should apply to most blockchain projects going forward.

Additionally, we’re proud to have been Cofound.it’s first official partner. Not only did the Cofound.it team help us with promotion, they also advised us on key design decisions. Some of these, such as the token design, will play incredibly important roles in the future. So thank you Cofound.it team, you were the ideal partner.

We encourage everyone to learn the lessons we did and invest deeply into their time and community in specific, reasonable ways. If you do so, you’ll be running the better kind of token sale.



Insight into the crypto markets.

Mitchell Loureiro

Written by

Crypto-economics, communications, and marketing that works. Also: Social theory, analysis, and books.



Insight into the crypto markets. For traders and investors of any level.

Mitchell Loureiro

Written by

Crypto-economics, communications, and marketing that works. Also: Social theory, analysis, and books.



Insight into the crypto markets. For traders and investors of any level.

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