Currently, Moxie’s total market capitalization is $19 million, which, although typically considered a small-cap project in the crypto world, is a significant valuation in the real world. In the real world, this would imply the entry valuation of the latest investor in the project, and the shares would not be liquid. Tokens in the crypto world introduce us to a new situation where we have startups trading from day one, often with vesting commitments on a much more aggressive timeline.

This exposes the project to the need to generate demand for the token in a short period of time.

The incentive to sell will be strong for many token holders, especially because the project will not have had enough time to create the value that would justify its valuation. I believe the Moxie project aims to improve upon the token projects we’ve seen so far, but the short-term focused financing structure is a challenge that needs to be overcome. To address this, it should either find investors willing to make long-term bets or seek revenue streams that can sustain its income.

I believe the Moxie project aims to improve upon the token projects we’ve seen so far, but the short-term focused financing structure is a challenge that needs to be overcome. To address this, it should either find investors willing to make long-term bets or seek revenue streams that can sustain its income.

I believe one of the steps the project should take is to extend the vesting period for the team, Early Backers, and Protocol Developers to three years. This would better align the project's long-term goals, especially by locking 40% of the token supply. It’s difficult for the project to survive if its founders are selling and cashing out in such short time frames. I also think it would be interesting to set price levels for the token, where tokens could be gradually unlocked as those targets are reached.

I believe the role of investors who take a chance on these projects is often undervalued, as they take on the risk of financing these ventures.

Another issue that I believe is really important is how the tokens are allocated. While it’s true that providing some stability in incentive programs is important, I think they should be constantly reviewed and adjusted to ensure they are optimized for creating the most value possible for the project. In this regard, it’s essential to define clear objectives and metrics that can objectively assess whether the farming strategies are working.

Some of the key metrics the project should aim to improve include:

1. Token liquidity: Ensuring there is sufficient liquidity for token holders to buy and sell without significant price slippage.

2. Active user growth: Monitoring the growth in the number of active users or participants interacting with the platform and its tokens.

3. Total Value Locked (TVL): Measuring the amount of assets staked or locked within the platform, which reflects user trust and commitment.

4. Retention rate: Tracking how many users continue to engage with the platform over time, showing the stickiness and value of the ecosystem.

5. Revenue growth: Measuring the project's ability to generate sustainable income streams, whether through fees, partnerships, or other mechanisms.

6. Partnerships and integrations: Assessing the number and quality of collaborations with other projects, which can expand the utility and visibility of the token.

7. Community engagement: Evaluating the level of activity, feedback, and participation from the community, which is critical for long-term project success.

8. Farming efficiency: Analyzing how well farming incentives are driving desired behaviors (e.g., staking, liquidity provision) and ensuring these incentives align with long-term project goals.

Some of the strategies I believe could be implemented include the following.

1 Liquidity from cost to revenue

For example, transforming liquidity provision from a cost into a revenue stream for the project. This is a strategy currently used by some projects, such as MakerDAO.

This would involve stopping the remuneration of liquidity and instead using those tokens to create proprietary pools, allowing the project to capture both the fees and the incentives from the AMMs.

2 Incubating projects

Financing projects in which Moxie can retain an equity stake. Building something on Moxie not only provides financial support but also offers the opportunity to introduce these startups to the entire Moxie community. If these projects also use the token, the impact is doubled for the Moxie project.

I believe having these grants available with a capitalization of $19 million is an excellent starting point. Even more so if these projects succeed in supporting the token's value to rise significantly.

3 Support from Base and Farcaster

I believe Moxie should seek support from investors such as Base and Farcaster. With a goal like The Moxie Protocol powers Fan Tokens on Farcaster, enabling the community to grow with special features and benefits, the significant value this community could bring to the project should be backed by the platforms where it operates. Lacking explicit financial support from these platforms would indicate that, in the long term, the relationship might not be balanced and could become competitive.

Conclusion

It is challenging for these projects to develop without creating a virtuous growth cycle, where the token increases in value because real value is being generated, and more tokens are distributed to continue creating value. These price drops are normal in an environment where the project's value is still being discovered, but it is crucial to align efforts to give the project enough time to create value while minimizing selling pressure on the tokens. Having the resources to fund the necessary efforts is key to giving the project a real chance to demonstrate its potential.