Original Title: Your token sucks ( and everybody cares ) Original author: @CaesarJulius0, Co-founder of StableJack xyz Original compilation: zhouzhou,

Editor’s Note: This article analyzes the main issues in current token design, including liquidity mining, no-threshold airdrops, high FDV with low circulation, and a lack of revenue sharing or value accumulation mechanisms. Excessive incentives and unreasonable token releases have led to market dilution and price declines, resulting in a lack of long-term value creation. To address these issues, a demand-based unlocking plan is proposed, emphasizing that tokens should be sold at a discount to genuinely committed users, and ensuring long-term value and market demand for tokens through revenue sharing and value accumulation.

The following is the original content (for ease of reading and understanding, the original content has been rearranged):

This round of cycles is frustrating, and the old routines no longer work. Your favorite coin no longer increases tenfold within a month, and it’s even falling behind every day (ETH, you know what I mean).

If you are a project team, it gets even harder. You pour your heart and soul into building a product, the feedback from testnet users is fantastic, and after the TGE… no one cares anymore. Why? Because the token didn’t rise.

Macroeconomics and marketing are indeed important, but we have to face the reality: does your token really have a reason to rise? Is your tokenomics model reliable, or is it just repeating those patterns that have already been proven ineffective? When people would rather hold meme coins than touch your altcoin, should we rethink token design?

This article will analyze the main issues in current token design and propose a new approach.

Inherent Issues in Token Design

·Token Inflation - Liquidity Mining

·Continuous selling pressure - No threshold airdrop

·High FDV Low Circulation

·No profit distribution or value return mechanism

In simple terms, most investors care about token prices rather than technology. They invest money in the project parties, hoping that these tech giants can realize their visions. Ultimately, both sides should be winners—investors can at least obtain reasonable returns, while the project parties can focus on development.

Next, we will break down these issues one by one:

liquidity mining

No legitimate project should issue tokens in unlimited quantities without a plan. You wouldn’t see Tesla giving away stocks to people who buy cars, so why do some DeFi protocols treat tokens as free giveaways?

Tokens are supposed to have value, but many teams abuse “incentives”, leading to infinite dilution of the market. If the project team doesn’t even value their own tokens, how can investors have confidence in them? This creates a vicious cycle: those who receive the tokens will only sell them off, rather than hold them long-term.

Liquidity mining is one of the main reasons for the collapse of altcoins. When designed improperly, it can trigger a “race to the bottom”: new users come in to mine, sell their rewards, and then move on to the next project, leaving only the old users with losses. If there is no mechanism to ensure long-term value creation, this situation will not change.

No-threshold airdrop

Airdrops themselves are not a problem, but most airdrops fail to bring in long-term users. The issue is not only that recipients will sell off, but many airdrop models only reward short-term “task-oriented” behaviors rather than genuine user participation.

The usual process is as follows:

Participants (usually bots) complete some basic tasks to obtain airdrop eligibility.

· Tokens are distributed at TGE.

Many recipients cash out immediately.

·Token plummets, making it difficult for the protocol to retain users.

Does it sound familiar? The real problem lies in the misalignment of the incentive mechanism — airdrop recipients have no reason to stay, not because the product lacks value, but because the airdrop itself did not consider long-term participation.

Not all projects should do airdrops, and for those that do, airdrops should reward real active users, not just those who complete a one-time task.

Hyperliquid and Kaito are great examples. Their airdrops do not encourage artificial manipulation but rather align with the behaviors that users already exhibit—Hyperliquid rewards active traders, while Kaito rewards authors who consistently contribute quality content. This not only promotes genuine participation but also increases long-term holding rates, rather than allowing funds to flow to short-term arbitrageurs.

High FDV, low circulation

Many projects raise large amounts of funds for development in the early stages, while early investors hope to recoup their investment as soon as possible. This leads to a high FDV (Fully Diluted Valuation) but a low circulating supply, resulting in the token price being severely inflated at the time of listing.

The problem is that a high FDV limits the profit potential for early retail investors, as most of the tokens are locked up in the hands of institutional investors, whose costs are far lower than the market price. Once the unlocking begins, these early investors often cash out under market demand, leading to a continuous decline in price. Ultimately, the token price falls, and everyone starts to take notice.

There is no perfect solution, but for projects with high FDV, there must be strong fundamentals and genuine market demand; otherwise, they will only become “exit liquidity” for early investors.

has no revenue sharing or value accumulation

Now, let’s talk about the most important question: why should your token exist?

If it has no revenue sharing, no value accumulation, and no practical utility, then why would anyone hold it for the long term? If your token is just a speculative substitute, then its eventual approach to zero is only a matter of time.

Many founders avoid revenue sharing to maintain complete control over profits, which is understandable, but without sufficient reasons for users to hold, the market will price the tokens accordingly. Ultimately, value accumulation is not optional. Whether through revenue sharing, real earnings, or meaningful utility within the protocol, tokens must provide a legitimate reason for their existence.

Relying solely on “governance” cannot solve the problem. Most governance tokens have no real power, and even if investors do decide to adopt a certain model, it is almost always related to turning on the fee switch—which is still related to revenue sharing.

The MetaDEX model performs quite well in distributing income to token stakers (such as Aerodrome, Pharaoh, and Shadow Exchange). This enables them to create demand for the tokens and increase the staking ratio.

What is the solution? My solution is simple: a demand-based unlocking plan.

Tokens should not be released according to a fixed schedule, but should only enter circulation when there is actual demand from active users of the protocol. Additionally, tokens should not be distributed for free through liquidity mining rewards; instead, users should be allowed to purchase them at a discounted price, ensuring that only those who are genuinely invested in the protocol can become holders. Here are three industry leaders proposing similar solutions:

Luigi DeMeo also holds a similar view, emphasizing that most token models face uncontrollable inflation issues, leading to a weakening of value accumulation. He pointed out that liquidity mining typically attracts short-term participants who immediately sell off tokens, depleting protocol resources while failing to ensure long-term engagement. Without market-driven demand and revenue sharing, token holders see little actual value.

Vitalik Buterin stated on Twitter that the protocol should consider discounted sales rather than giving away tokens for free, which also supports the main point of this article.

Andre Cronje directly raised this issue. He believes that liquidity mining attracts temporary participants who obtain rewards through mining and exit when the incentives disappear, causing ongoing selling pressure. As a solution, he proposed “option rewards” — that is, liquidity providers can purchase tokens at a discounted price after a set period, rather than being directly given tokens. This mechanism aligns their incentives with the long-term success of the project, as their rewards will only appreciate when the protocol thrives.

At Stable Jack, we are implementing a solution called Discount Tickets—a system designed to make token distribution sustainable, demand-driven, and resistant to employed capital.

How it works:

Only active users can obtain discount tickets, granting them the right to purchase $JACK at a market price discount.

The tokens will not be given away for free—they are sold at a discounted price to ensure that committed users can accumulate meaningful holdings.

New tokens will not enter circulation unless there is real demand for $JACK - this is the demand-based unlocking.

There is no unnecessary supply pressure—loyal users will not be shaken off by short-term participants.

What is the result? Believers, not mercenaries, become holders. No uncontrolled inflation. No free giveaways. Only a model that prioritizes user and protocol long-term alignment. In addition, the protocol can also accumulate its own liquidity, mitigating sell-off pressure and sustaining product development.

Conclusion

For many years, altcoins have struggled under imperfect token models—unsustainable liquidity mining, poorly structured airdrops, and rampant inflation have drained value without creating it. The solution is not to remove incentives, but to align incentives with long-term participation and actual value accumulation.

We need to shift from time-based unlocks to demand-based unlocks, ensuring that tokens only enter circulation when there is real market demand. Projects should not give away tokens for free, but should sell them at a discounted price to committed users, while also incorporating a revenue-sharing mechanism that provides holders with substantial benefits in the success of the protocol.

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