​According to a recent report from CoinDesk, the prevailing sense that the blockchain space is still too focused on speculation remains a major blocker for mainstream adoption. In order to build a sustainable ecosystem and onboard more users, protocols must rethink how tokens are distributed.

The current trend in the cryptocurrency market is for token launches to adopt a “low float, high fully-diluted value (FDV)” strategy. This involves releasing a small percentage of the total token supply to the market at a high price, creating a deceptively inflated FDV for the project. However, this approach is not sustainable and takes attention away from the real focus of crypto projects – long-term utility and protocol adoption.

To address this issue, protocols are beginning to experiment with alternative models for token launches. For example, FRIEND, a blockchain-based social platform, launched with 100% float, distributing all tokens to the community from day one. This approach prioritizes long-term utility and organic growth over speculative gains.

At Lava Network, an access layer for blockchains, we have taken a radically different approach to token distribution. By sharing our experiences and insights, we hope to inspire a shift towards more responsible and sustainable token launch practices. This alternative strategy involves a market-derived FDV through decentralized exchange (DEX) trading, which reduces speculation and fosters a community of long-term network participants.

This approach offers several key benefits, including a focus on a token’s intrinsic utility and the project’s real-world potential, rather than speculative pricing. It also ensures a higher initial float and a capped supply, promoting a more organic growth of the project.

In conclusion, it is time for the blockchain industry to make bolder bets and refocus on distribution and utility, rather than price speculation. By adopting more responsible and sustainable token launch practices, we can build a stronger and more resilient ecosystem that benefits all participants. 

Source:Read More