Original author: @SmokeyTheBera , @berachain Chief
Original translation: zhouzhou, BlockBeats
Editors note: This article discusses the recent phenomenon of multiple projects issuing tokens in the Berachain ecosystem, and reminds founders not to issue tokens blindly. Tokens should drive growth when the product reaches market fit, otherwise it may affect user adoption. In a sluggish market environment and limited community funds, falling token prices will damage the product image. Token issuance should avoid simultaneous competition, ensure reasonable valuation, and focus on long-term value rather than short-term exit. The author supports the development of Berachain, but emphasizes that success requires patience and strategy, and recommends that the team prioritize profitability and user growth.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
Berachain friends, this is my first attempt at writing an article. This article is mainly aimed at the Berachain ecosystem, but I hope some of the insights here will be inspiring to the wider community, especially those projects that are considering issuing tokens.
Recently, I have seen multiple teams within the Berachain ecosystem launching tokens or preparing to launch new token issuances in the coming weeks, with a total of about 8 projects. From a certain perspective, this is worth celebrating - new tokens can drive economic activity, trigger market speculation, and even promote the growth of protocols. Tokens may bring wealth effects, and the Berachain ecosystem will also benefit if the native token performs well.
But on the other hand, we should expand our perspective and think deeply about the real value that token issuance can bring. After issuing tokens, the perception of your product in the public eye will inevitably be linked to the price. Few projects can escape this rule unless they have no direct competitors in the market or are very early pioneers (such as projects like 1Inch and Compound).
In the current on-chain environment, the vast majority of altcoins (and even the entire market) cannot escape the influence of market gravity, and the low price of your token may directly affect the adoption rate of your product.
Timing of token issuance is crucial
Ideally, the token should be launched when the product has demonstrated product-market fit and is at the point of explosive growth. It should be a reward to early users, thanking them for helping the product get to this point. At the same time, it should also be a tool to promote asymmetric growth, rather than a burden that hinders adoption.
Next, I want to talk about some real-life issues that are usually only mentioned in private chats.
The market waits for no one, and the community can’t save you
No matter how loyal your community is, a continuously falling price curve will affect adoption. And right now, most tokens are trending down and not up. More importantly, in the Berachain ecosystem, your token is an alt on an alt, and top on-chain tokens like Solana are struggling to find buyers. Are you sure now is a good time to issue?
A serious question you should ask yourself is: “Who are the marginal buyers of my tokens?”
If you don’t have a clear and differentiated answer that ensures that token distribution reaches new potential buyers, then I suggest you think again and don’t ignore the long-term impact for the sake of short-term “dopamine stimulation”. Because the answer is definitely not “community”.
The community will support you, use the products on the chain, and make opportunistic investments. But the communitys funds are limited and it cannot save your tokens. Projects need to focus on long-term viability rather than short-term market opportunities.
Some people say that market timing is unpredictable, and I partially agree. But you can build a product that is survivable by default, profitable, and even repurchase at the right time, truly creating value for token holders (of course, the premise is legal and compliant).
I want to emphasize that issuing tokens does not make your job easier, it amplifies everything:
If the token price goes up, your product is like the S-level king, the team is invincible, and everyone is chasing you.
If the token price drops, you will be called a liar, your product will be considered worthless, your team will be called stupid, and some people will even attack you for taking venture capital money.
Of course, the situation is not black and white, and some protocols do have core requirements for tokens, such as some DeFi products that require tokens to operate properly. But these cases are rare and do not apply to most projects.
How to properly launch a token offering?
If you really decide to issue a coin, at least pay attention to the following points:
Coordinate with other projects within the ecosystem and do not schedule the issuance of multiple tokens too close together to avoid dilution of market demand.
Give the market time and space to allow funds to flow and rotate, rather than rushing together to grab market share.
Dont overestimate the valuation. If you have already conducted private equity financing, in the current market environment, listing at a break-even valuation may be a more reasonable choice.
Summary of key points
If your product is already making money, increase investment, improve revenue, and optimize distribution instead of rushing to issue tokens.
Allow the product to survive by default, preferably to make a real profit, and leave the possibility for future repurchase.
The existence of tokens may affect product adoption. Some users will actively participate in a project without tokens (looking forward to future airdrops), but if they see a token with a falling price, they may abandon the project directly.
In the current market environment, tokens with a market value of 10M-200M are basically in a no mans land of price discovery. Either everyone goes to mine stablecoins, or they gamble in shitcoins with extremely small market value.
Wrong motivations for issuing coins: investor pressure, community expectations, and the team’s desire to cash out.
The right motivation for issuing a token: the product has proven PMF and there is a clear roadmap showing how the token can promote growth.
My concerns about the Berachain ecosystem
Currently, there are too many tokens issued in the Berachain ecosystem, and I am worried that this will cause many teams to disable themselves in terms of adoption and traction. Ultimately, this may lead to two extremes:
At one extreme, an extremely loyal community is formed within the Berachain ecosystem and slowly grows stronger.
The other extreme is that future teams will be dissuaded from issuing tokens on Berachain after seeing the current situation.
Of course, on the bright side, these tokens may exceed expectations and drive product growth, or at least allow founders within the ecosystem to learn real lessons from their failures.
I wrote this article because many people privately asked me what I think about the recent Berachain ecosystem TGE. I have always supported the Builders on Bera, and I hope they succeed, but I hope they succeed in the long run.
Although it may sound a bit cliche, the crypto industry is a marathon, not a sprint. We have been in this industry for three years and know the truth.
