Web3 is a fascinating space.Â
This is exciting. But also a problem.
Tech-savvy founders and builders are building a lot of new platforms and services right now. And a lot of them involve tokens.Â
Ooooh I said the word. So sexy for web3 native professionals, and so confusing for those trying to cross the bridge.Â
The thing is: Tokens are great when used right. And a nightmare when used wrong. And I analyze dozens of projects and companies every week. And a lot of them have their own tokens. And in 90% of the cases, their tokens were not necessary. At least not right now.Â
Tokenomics is hard. That’s the truth.Â
Building a tokenized business is not difficult. We have hundreds of tools today that can help you with that.Â
But building a sustainable tokenized business… That’s hard. And we don’t have that many great sources that can help you with this specific mission.Â
In my humble opinion, knowing how to add tokens to a business in a way that really makes sense to all stakeholders and that is sustainable and focused on the long term will be one of the most powerful skills throughout this decade.Â
A lot of founders and builders now think about tokens as an end by themselves. Ironically, this will probably kill your ventures around tokens. Tokens are tools, not a business model. It can work as a business model during the bull market when everyone is happy, dancing, collecting, and posting “to the moon” on Twitter. Life is beautiful and everything. But they will not work as a business model when the dance stops.Â
This happened in 2021. With all the parties with NFT Collections, a lot of them launched their own tokens. When the music stopped in 2022, almost all of those tokens became useless and without any liquidity.Â
If you come across someone wanting to launch a token for their own platform or talking about how a certain token is awesome, ask a very simple and quick question (because simplicity is underrated and time is money): “Why?“
If they get confused. You can add: “Why should we have a token? Why does your company need a token? Why now?”
If the answer doesn’t have solid foundations… Run.
Tokens might seem like a distant dream right now. But believe me: They are already changing entire industries. At the same time, few people know how to build tokenomics that really make sense.
This will be an extremely important skill in a few years. Companies will hire Tokenomics Designers and Tokenomics Engineers. A lot of them.Â
Years from now, when you hear the word “token” in a business meeting, never forget the first rule: Tokens are tools, not a business model.
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