THE Magnet Thesis
The Demise of the Existing Crypto Model and the Inception of a New Era.
Adapt or Die
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Magnet Thesis 25
The Demise of the Existing Crypto Model and the Inception of a New Era.
Adapt or Die
The Demise of the Existing Crypto Model and the Inception of a New Era.
The Demise of the Existing Crypto Model and the Inception of a New Era.
The Demise of the Existing Crypto Model and the Inception of a New Era.
Adapt or Die.
Since its inception, most crypto projects launching tokens have followed an industry-standard model for token launches and growth. However, this model is becoming obsolete. As a result, altcoins are increasingly vulnerable to market cycles, experiencing declines of up to 90% over the past six months. Meanwhile, tokens with no real utility, such as memecoins, are reaching unprecedented highs in both value and trading volume.
The *Magnet Thesis* seeks to clearly define the current crypto model (used by projects launching tokens), explain why it’s becoming outdated, and outline the significant risks this poses for the future of the industry. Projects that fail to adapt to the evolving landscape face the prospect of a slow and inevitable decline.
This thesis will also explore the emerging crypto models of tomorrow, highlight early successes of these models in the market, and discuss how existing projects can reinvent themselves. By doing so, they can break free from market volatility and competitive pressures.
Finally, as Magnet is a growth-oriented company, the thesis will illustrate how a new era of crypto growth is dawning. It will also show how both new and existing projects can achieve exponential growth and outpace the competition by leveraging growth strategies tailored to these new models.
It is time for this industry to evolve and strengthen.
The current crypto model is becoming obsolete
This is the Current Crypto Model:
"We’re building this innovative project and have raised at a $20M fully diluted valuation (FDV). Here are our tokenomics and vesting schedules."
"We’re launching on this exchange and doing a small community sale on this platform."
In essence, the project already has an FDV in the multimillions before achieving token-product fit, and insiders (not the community) have gotten in early, making them profitable by the time the token launches.
There may be some initial hype, but as the narrative and market trends evolve, the project becomes vulnerable to the whims of the market.
This model is outdated. Let’s dive into why.
Read MoreConceptware
Thousands of tokens have been launched based solely on promises & early concepts. Both venture capitalists (VCs) and the broader Web3 and crypto community are becoming increasingly aware of this issue and are starting to distance themselves from these types of projects. Retail investors are likely to follow suit soon, recognizing the lack of substance behind many token launches.
Unvalidated FDVs
Fully diluted valuations (FDVs) are often created out of thin air, without any real foundation. These valuations are not based on solid business models or token utility but instead rely on insider bids. Early investors typically profit at the FDV stage, meaning they can sell their holdings and make money even before the community has a chance to participate. By the time the community gets involved, the upside potential has been greatly diminished.
Community Entrances
The community, which should be the foundation of any successful project, is often the last to enter under the current model. This leaves them with limited opportunities for growth or returns. Meanwhile, meme coins have become strong competitors by involving their communities from the very start, offering more upside for early participants.
Lack of Utility-Based Buying Volume
Most crypto projects fail to generate buying volume based on the actual need for their tokens within their ecosystems. In fact, 99% of tokens have no real utility. Even in projects that do offer utility, such as new blockchains, the extremely low transaction fees (e.g., $0.0001 per transaction) make it difficult to justify high market capitalizations, such as $1B valuations.
Speculative Assets
In the current model, market capitalization is driven more by speculation than by actual utility, whether the token is a memecoin or a so-called "utility" token. If a project isn't aligned with the latest narrative or market trend favoured by degens—who are responsible for year-round trading volume—it is likely to follow the broader market cycle, which can lead to declines.
Selling Pressure
This model breeds significant selling pressure. Heavy selling pressure makes it difficult for projects to break out and achieve long-term success. With over $150 billion worth of token unlocks expected across the crypto space in the next few years, this pressure is likely to increase, further hindering the success of many projects.
Exit Liquidity
Under the current model, venture capitalists, exchanges, key opinion leaders (KOLs), market makers, and insiders typically enter projects early, before the community. As a result, when these participants exit their positions, the community ends up becoming the exit liquidity, significantly reducing any potential upside for regular investors.
Altcoins and Market Cycles
Because of the lack of buying volume driven by utility, combined with continuous selling pressure, altcoins remain tied to market cycles. This makes it nearly impossible for them to break free from broader market trends, leaving them vulnerable to large swings in value.
The Need for a Consistent Model
A sustainable crypto model needs to be tailored to the specific type of project. The one-size-fits-all approach that has dominated the space in recent years is no longer viable, and the industry must evolve to accommodate different models based on individual project needs.
Read MoreEarly signs of obsolescence
The early signs of obsolescence indicate that the current model is failing, but this reality has been swept under the rug by projects still chasing a big payday. The news that the current crypto model is broken is starting to spread, though it’s still in the early stages. Once the snowball effect kicks in, the model will be definitively buried.
Noise in the Trenches
Key opinion leaders (KOLs) are beginning to raise concerns about the flaws in the current crypto model. Murad (@muststopmurad), a leading figure in the memecoin movement, frequently discusses the problems with the existing altcoin model, positioning it as a reason for people to favor the memecoin approach. His talk on this topic at Token2049 has garnered over 3 million views. This message has spread widely in degen circles, resonating with those involved in the trenches of crypto, as it explains the underperformance of altcoins compared to memecoins. At Magnet, we've spent the last six weeks embedded in degen groups to confirm this shift in sentiment. Looking at the market, the stark difference in the performance of altcoins versus memecoins speaks for itself.
Frustrations Drive Awareness
Human frustration often leads to the search for answers. As altcoins continue to underperform due to the broken model that underpins them, especially in contrast to other assets like Bitcoin or memecoins that are still rallying, questions will inevitably arise. The reasons behind memecoin rallies, Bitcoin’s price stability, and altcoins’ ongoing struggles are already accessible to those who dig deep enough. As more people uncover the truth, awareness will spread, triggering a larger reaction.
Snowball Effect
Degens are already in the know. From KOLs openly criticizing the current crypto model to the spread of this message across degen communities, the decline in volume for altcoins is evident as it shifts toward other asset classes like memecoins. However, the biggest shift is yet to come. As degens and KOLs move away from supporting the old model and focus their attention on projects adopting newer frameworks, they’ll push these ideas to the forefront. When retail investors re-enter the market as the cycle picks up, they will turn to these same sources for information. Retail will begin funding projects that follow the newer models, leaving many older tokens behind. Some altcoins may never see the kind of windfalls associated with a traditional "alt season" again.
Read More‘Altcoin Szn’ is fading out, forever
Altcoins are facing the biggest challenge the crypto space has ever presented. When the snowball effect takes hold, we won’t see a general altcoin season where everything and anything skyrockets. Only select altcoin projects with strong fundamentals and real utility may survive, while the majority will not. This is a significant problem.
Communities Vanquish
Communities are the foundation of the crypto space. If the market becomes aware of the flaws in projects operating on the outdated model, the degens and retail investors responsible for building community and driving network effects will fade away. Without them, these projects will lose their most vital support.
Volume Will Vanish from Alts
In the past, huge volume has flowed into altcoins when the market picks up, but that volume will now shift to projects launching under new, fairer models, as explained later in this thesis. Projects that lack solid utility and fundamentals, despite being established, will no longer attract this influx of volume. Relying on the general market cycle to revive such projects will no longer be an option.
The Chart is Marketing
In the crypto world, the chart is often the best marketing tool a project has. Many degens, along with retail investors, base their buying decisions on charts and technical analysis. If a project’s chart shows no volume or upward movement, it will deter these investors, causing them to avoid buying into the project altogether.
Token Metrics Get Wrecked
In many crypto projects, the token itself is the product. Market participants analyze token-related statistics, along with the general chart. If volume declines, liquidity tightens, and token distribution remains in the hands of insiders, altcoins will continue to lose value, pushing them further down in the market.
Growth Levers Stuck in Gear One
The two biggest growth levers in crypto are community and token performance. If communities vanish and token metrics, along with the chart, are in poor shape due to the reasons outlined above, projects will be unable to activate these growth levers. Without these levers in motion, future growth prospects will be nonexistent.
No Network Effects
The growth levers of community and token performance are what drive network effects, causing crypto projects to grow exponentially. Without a strong community and active token growth levers, there will be no network effects. Projects without these will lose out to those that can generate these effects, powered by strong tokens and engaged communities.
Read MoreProject survival reliance on tokens
For many crypto projects, the token is not only the product but also the vehicle that drives capital into the project for development, growth, and survival. If altcoins fail to address the challenges they face and accept their growing obsolescence as inevitable, capital will dry up, and they will be out of the game.
Token Initial Fundraising
If you’re looking to raise funds from venture capitalists (VCs) and cannot demonstrate a strong community, you will struggle to secure investment. VCs are inundated with dozens of opportunities each day, as many builders are now active in this space. They understand that community is the foundation of crypto; without it, tokens are destined to fail. Without a community to support your project, you won’t raise funding from VCs. If you adopt the outdated model without nurturing fundamentals and utility within a community, you could waste a year failing to attract the necessary investment.
OTC Fundraising
Future fundraising efforts, such as over-the-counter (OTC) deals, will become increasingly difficult for the same reasons outlined above. It’s challenging to attract interest if a community isn’t evident, leading to low market volume. If VCs cannot exit their positions, they will prefer to invest in projects with existing volume. They would rather buy on the market and own their positions from the outset, allowing them to exit on their own terms.
Treasury Value and Liquidity Diminishes
Projects typically fund their development through their treasury. However, if the token price is low, treasury tokens will soon diminish. Additionally, low volume means that selling from the treasury will lead to a rapid decline in token value, harming existing community members and deterring potential future participants.
Volume Revenue and ATLs
Projects also rely on volume-based revenue streams, such as buy/sell taxes, to fund their operations. When trading volume is low, the revenue generated from these taxes decreases as well. Moreover, without healthy volume and price action, market makers become ineffective, erasing any potential profits from market-making activities.
Projects Look for the Next 'Lick'—The Picture is Painted on the Wall
As a growth company, we can attest that many projects wish to expand but find themselves constrained by dwindling capital, as discussed earlier. Consequently, smart projects are on the lookout for their next 'lick'—a way to generate funds from their existing community before resources run dry. We are seeing an increase in node sales as this next opportunity. Projects are starting to conduct node sales aimed at existing investors and community members, allowing them to raise capital while appearing innovative. However, many projects conducting node sales do not actually require what they are selling; it is simply a means to bring in cash and stave off failure. Projects with dead tokens are clinging to the hope that an altcoin season driven by external market factors will come to their rescue, making them wealthy again. In the meantime, they are focusing on new revenue streams like node sales to sustain themselves. The picture is already painted on the wall.
Read MoreProject definition defines model
It’s a tough environment for altcoins right now, and the situation is only going to worsen unless projects adapt to new crypto models and revitalise themselves effectively. This section of the thesis focuses on how altcoins can avoid their current fate by embracing new models and growth strategies to reinvigorate existing projects.
Before delving into the models of tomorrow and strategies for project revitalization, it’s essential to assess the different types of projects so that the appropriate model can be applied based on project type.
There are three project types: No Utility, Future Utility, and Utility.
No Utility - Community Projects
Projects with no utility are essentially community projects. In these cases, the real value lies in the community built around the project, the culture they create, and potentially the movement that stems from this culture. These projects do not promise any tangible utility; they are primarily community tokens. The best example of this category is memecoins.
Future Utility - Vapourware
Conceptware projects are those that either plan to or are in the process of building specific technology. Essentially, these tokens lack the fundamentals or utility driving them at present but hope to establish these in the future based on their development efforts. Many altcoins have fallen into this category; they may have launched with the intention of delivering utility but failed to establish solid fundamentals, leading to a lack of utility-driven buying volume. Consequently, they remain conceptware in my view. I refer to this category as “future utility” because if a project starts out as conceptware, it cannot remain that way indefinitely; it must evolve into a utility-driven project to survive. It’s crucial to communicate this message clearly to your community: they are building alongside you toward becoming a fundamentally sound utility project.
Utility
The final type of project is the utility project. It’s important to distinguish that I’m not referring to the 90% of so-called utility projects that are, in reality, just conceptware. A true utility project is one where the token is actively used within the technology developed—not merely one that could be used or might be used in the future. In these projects, the token is an integral part of the technology's functionality. For instance, in a blockchain operating on a proof-of-stake model, tokens are essential for the system to function effectively. Additionally, a utility project generates buying volume driven by its actual utility within the product, rather than purely speculative buying. A prime example is Ethereum ($ETH). While some people buy $ETH to speculate, many others purchase it to pay transaction fees on the network. This is a clear demonstration of utility.
Read MoreNatural evolution
This thesis thus far may seem critical of the majority of crypto projects. However, evolution is essential for the industry to progress. We aren’t onboarding a significant number of new users into the space because the existing model is fundamentally broken. Reinvention, which involves learning from failures, adapting, and improving, is a crucial aspect of any healthy market.
As a community, we need to evolve, adapt, and enhance our approaches. This is the primary objective of this thesis—it represents natural evolution. Here, we will focus on the crypto models of the future for new projects entering the market. If you already have a project, the emphasis will be on adapting your model and revitalizing your initiative, which will be covered in the following section.
The ignition starts everything
The way projects are initiated is crucial. Once you’ve launched your token, it becomes very difficult to change your model. If you launch using the old model, you’re essentially setting yourself up for future failure. You could end up wasting years of your life trying to build something that ultimately won’t be rewarding because you started off on the wrong foot. Therefore, instilling the right model from the beginning is of utmost importance. It is essential to incorporate the crypto models of tomorrow from the very outset.
Natural evolution
We believe that three models will dominate in the crypto space moving forward. One model will cater to conceptware (future utility) projects, another will be for no utility (community projects), and the third will focus on utility projects. It’s essential to be honest about what type of project you are and to apply the corresponding model as outlined below.
These descriptions serve as introductions to the three models, highlighting their key elements rather than providing a comprehensive breakdown that you can implement immediately. You will still need to consider the finer details. After all, this is a thesis, not a paid growth strategy.
No Utility - Community Projects
Community projects, particularly memecoin projects, are setting a new precedent in the crypto space. The proof that new models work and are being adapted comes from memecoins, which are redefining how fair crypto models are perceived. The model for these projects is straightforward: launch 100% of the supply from the beginning, with no fixed fully diluted valuation (FDV) and a low market cap. A small portion of the supply can be set aside to fund the project moving forward and to control against significant price dumps. While this strategy carries risks, a memecoin that has been around for a while and has developed a genuine community is often a sign that the team is managing growth responsibly rather than seeking quick profits.
However, it is crucial not to snipe too much of the supply, as doing so may lead to excessive centralization. Remember, these are community-owned projects, so efforts should be made to eliminate large external snipers early on and create a fair token distribution. Ideally, memecoins should be community-funded rather than venture capital (VC)-funded. They thrive on new buyers entering the market, with the token's success driving funding rather than relying on institutional investments. Community ownership should be prioritized, allowing early members to guide the project's direction moving forward.
Future Utility - Conceptware
Next, we have the model for future utility projects, which are currently classified as conceptware. Conceptware projects can adopt a model similar to that of memecoins but with some modifications. Successful examples, such as $HASHAI and $BLENDR, have achieved market capitalizations exceeding $100 million using this approach.
The model for future utility projects is as follows: launch 100% of the supply and bundle a portion transparently for future uses such as fundraising, community rewards, and treasury management. Transparency in tokenomics is essential—be honest about what has been set aside to support future project growth. Just like memecoins, conceptware should launch with a low FDV because a high FDV cannot be validated without existing utility.
By launching at a low FDV, early community members are enabled to invest early and become advocates for future growth. This approach avoids the need for substantial investment in growth to attract a community before seeking VC funding. Providing good entry points allows community members to gain ownership, vested interest, and the opportunity to build alongside the project as it transitions to a utility-led model.
It is crucial to cultivate a community that genuinely believes in your vision, not just a facade of support from VCs, market makers, and insiders who may prioritize profit over genuine growth. Conceptrware projects must strive to evolve into utility projects to avoid being viewed solely as speculative assets; initial community members will disengage if the project fails to deliver. The faster you can establish a fundamentally sound utility project that generates buying volume, the more you will distinguish yourself in the market. This is the new game.
Utility
Finally, we arrive at utility projects, which have the option to follow the conceptware model of prioritizing community or to incorporate elements of the existing crypto model with a twist. Utility projects can raise funds before the token launch at a high FDV, but this is only feasible if they can substantiate that FDV—meaning the utility their token will provide from day one justifies the valuation and offers substantial upside potential. Building community in crypto requires potential upside, so if a project enters the market with a $20 million FDV but has the potential to reach $500 million based on existing utility, that FDV can be validated.
Raising capital from insiders such as VCs, exchanges, launchpads, and other valuable networks can be legitimized if the unlock schedules are linked to performance targets. For instance, VCs might be permitted to sell 10% of their holdings upon reaching a certain market cap. This adapted model prevents market dumps during growth periods, allowing them only when the project can sustain such movements.
If projects choose to raise funds before launching, they must ensure that the token has a robust utility generating buying volume from day one. The product and ecosystem should be fully prepared, with a user base ready to derive immediate value from the token upon its launch.
A community-first approach is crucial, whether through airdropping tokens to existing users within the developed ecosystem before the token launch or allowing the community to invest as much pre-market as insiders.
Utility projects should aim to operate more like stocks. Their value should be influenced by the project's performance, supplemented by some speculation. The value of utility tokens needs to reflect their actual utility while allowing for a degree of speculative interest.
Read MoreAdapting your model in real time
If you’ve already launched your project using the current crypto model, you must reinvent yourself. Otherwise, new projects entering the market that adapt to innovative models will outshine you and capture all the volume.
Reinvention stems from the core of your project, requiring you to decide on your new focal points. This primarily involves leveraging the two key growth drivers in crypto: token and community.
Reinvention instead of generation
Unfortunately, you won’t have the ability to adapt to a new model unless you relaunch your token. For many projects, relaunching may not be feasible. Therefore, the focus should be on reinvention instead of generation. The good news is that you can distinguish yourself from all existing projects that fail to reinvent themselves. Revival can create a new type of network effect, earning you praise from the market for adapting to the times in service of your community.
Your power card
When you choose to reinvent, you possess power cards that new projects do not have. Firstly, you have market experience and connections. Utilizing the knowledge you've acquired and leveraging relationships to support your reinvention will allow you to act swiftly, potentially beating the next wave of new projects to the punch. Secondly, you will have an existing community that you can impress through your reinvention. This existing base enables a quicker network effect since you are not starting from scratch; you just need to inspire belief in your vision. Thirdly, as mentioned previously, you can stand out among thousands of other projects that are not reinventing themselves. You can become the poster child of reinvention, the project that other communities aspire to emulate.
Break away from your current destiny
By implementing re-energization tactics, you can break away from your current destiny. From now until the end of this thesis, we will explain how we believe you can achieve this transformation.
Project type re-energisation
Just as selecting a new model to deploy depends on your project's unique situation, the reinvention tactics you choose will also rely on the current stage of your project. We’re going to explore various tactics you can use to re-energize your project in the current market. While there are numerous strategies available, this thesis aims to plant the seed and trigger that lightbulb moment, empowering you to pursue reinvention with enthusiasm or seek further assistance from Magnet.
For Future Utility - Conceptrware Projects
First things first, be honest. If you’ve built something but don’t really have any adoption or token-product fit, classify yourself as conceptware until you reach the point where your token is used within your product. This describes a large percentage of current utility projects. The days of classifying yourself as a utility project simply because you’ve built something are over; you need token-product fit unless you launch as conceptware and allow the community to own the journey toward achieving that fit with you. Your sole aim right now, if you do not have this, is to turn into a true utility project as soon as possible. Focus on developing token-product fit, whether that involves reinventing your tokenomics or further developing your product to incorporate your token. Once you achieve this point of true utility, you can further revitalize your project using the information shared below about revitalizing a utility project.
For Non-Utility - Community Projects
If you’re currently a community project and falling behind, revitalization is essential. Remember that your community is your utility. Engaging with, expanding, managing, and incentivizing your community should be your core activities. Get in the trenches and grind it out.
This effort goes hand in hand with prioritizing community building. Focus on developing a close group of believers who hold their own bags and actively work for the project. These individuals become your soldiers. If you can attract KOLs (Key Opinion Leaders) with followings, that’s even better.
As a purely community project, your token and market represent your product. Whether you draw the perfect chart or achieve great distribution volume and liquidity, make every effort to enhance the outlook of your token. Regularly check Dexscreener and consistently work toward improving all displayed metrics.
The goal of community projects is to first create a cult, then develop a culture from that cult, and finally establish a movement that the initial cult believes in and can promote to others. Strategize to work through these three stages.
Content is key. The foundation of building a cult that evolves into a culture and then a movement is content. Creating relatable content fosters a cult, and in many ways, content also becomes your product. Invest in it.
For Utility Projects
Finally, if you’re a utility project with sound fundamentals, here’s how you can revitalize:
You need to breathe life into your utility. Focus heavily on discussing the use of your token within your product. Show the data, the stats, and how the utility is generating sustained buying volume over time. Step away from a purely speculative approach; concentrate on the fundamentals.
Identifying selling pressure is crucial. Recognize potential future selling pressures, such as token unlocks and significant bag holders. Mitigate these risks by extending vesting periods or implementing OTC deals. There’s no benefit in generating buying volume if certain insiders will just sell into it. Understand your distribution and take measures to prevent dumps.
Your token is still a product of its own, similar to community projects. Improve everything related to it. Whether you create the perfect chart or achieve significant distribution volume and liquidity, dedicate efforts to enhance the outlook of your token. Consistently monitor Dexscreener and strive to improve all relevant metrics.
Regardless of your feelings, degens contribute significantly to buying volume in this market. You need to speak their language and cultivate a cult, culture, and movement they can support, all while maintaining a utility-driven vision. Degens and retail investors typically won’t invest fully in zero-utility coins; they will seek diversification. If you can create an environment that welcomes degens, you’ll be on the right track.
Finally, prioritize your community. You’re building three products: your tech, your token, and your community. Seventy percent of your marketing and growth efforts should be focused on community-related initiatives. You might not be doing enough—so do more to activate that network effect.
The result of these strategies will pave a path where you can create your own destiny moving forward, rather than being at the mercy of market cycles.
Read MoreYour approach
The purpose of this thesis is to establish that a new dawn for crypto growth is beginning. As a leading growth consultancy in the space, we felt it necessary, at this crossroads, to share our beliefs on how the industry can move forward from here. We are in the trenches every day, hacking growth for projects, witnessing the demise of the existing model and the emergence of a new era.
A new dawn for crypto growth means refining your growth approach. Decisions regarding which model to adapt or how to revitalize a project are key growth factors, as they affect the two biggest growth levers available to us in this space: token and community.
Growth strategy and the execution of activities relevant to this current market move the needle; marketing does not—it’s a slower burner. Let’s dig into how the change in the crypto model breeds a new era in crypto growth.
It’s All in the Growth
Crypto success comes down to growth. This is why Sui hit an $18 billion market cap while dozens of other Layer 1s with great technology are sitting at under $100 million market caps. Even if you’re a pure utility project, speculation still exists. If you’re conceptware or community-based, speculation is everything, and what creates great speculation? Growth.
Next Gen of the Internet
The next generation of the internet will not just be born from building. Here at Magnet, we believe that Building + Growth = Next Generation of the Internet. This simple formula was behind the initial creation of Magnet. Sustainable growth models supporting great products will get us there.
Favour the Trenches
If you’re running a project and striving for growth, you need to be in the trenches with those who will join your project's journey. Similar to reaching product-market fit, where you spend time with your target audience, the same applies to token market fit. Get in the trenches; understand the degens and retail participants in communities like yours.
Avoidance of the Quick Win
Avoid the quick win; crypto is full of it. Build something you believe in, and more importantly, build something others believe in. Build together and build for the long term.
Read MoreRegardless of what new model
Regardless of what new model you’ve adopted based on your project type, or whether you’re revitalizing an existing product, the following quadfecta of crypto growth needs to be prioritized. Focus your growth efforts on this quadfecta, and you’ll be able to compete effectively.
Grow your community -> Grow your token -> grow your network effect -> grow your project.
Area 1: Community
Community is the foundation of every crypto project. Whether you’re starting out or revitalizing your project to mark a new era, make it clear that community is your number one focus. Allocate at least 50% of your marketing and growth resources to this area, as it kickstarts everything.
To grow your community, keep it simple. Do your research on which key opinion leaders (KOLs) have significant influence right now, activate them with the right messaging, and bring their communities over to yours. Additionally, collaborate with similar projects through co-marketing to generate organic growth between your communities—this is low-hanging fruit.
As KOLs may gradually fade out, prioritize building a community of real people with small but engaged accounts. Value these relationships and build an army of supporters instead of chasing big-name KOLs.
Incentivize your community by providing rewards to your core supporters. Avoid running general quests that attract low-quality traffic and bots; focus on incentivizing your engaged followers. Rally your community around adapting your project to the market's prevailing meta and narratives, as they can be quite powerful.
Establish a strong vision and ensure your community is firmly behind it. Create a culture that aligns with your project’s goals. For utility projects, it’s crucial to drop your corporate guard and relate to your community on a human level. Align your interests with those of your community, becoming one of them rather than a corporate puppet. Be their leader, not just someone looking to fill insiders’ pockets.
Area 2: Token
Once you’ve begun to establish your community, those community members will naturally evolve into token holders, but only if your token and market are positioned correctly.
To create a healthy market and token for your community, first, align your market makers with your growth sprints. For instance, they shouldn’t be selling heavily during a growth period when you’re trying to activate a network effect. Their actions need to support your growth initiatives.
Next, ensure your liquidity is locked and sufficiently deep to prevent large price impacts. Volume is also crucial; it demonstrates activity more than anything else in crypto, so ensure your token maintains decent organic volume.
Fair token distribution is of utmost importance. Degens will check bubble maps and holder distributions; any significant bag holders or undoxxed clusters showing on these maps can be off-putting. You also need to understand existing selling pressure and find ways to mitigate it, such as extending lockup periods. Don’t let others undermine your growth efforts by dumping their tokens and using your initiatives as exit liquidity.
Lastly, focus on platform ratings. Ensure your token is performing well on all relevant platforms, such as Dexscreener, Dextools, CoinMarketCap, and CoinGecko. These are the platforms that degens will analyze your performance on, so make sure you’re active and scoring top marks.
Area 3: Network Effect
By effectively leveraging the two biggest growth factors in this space—community and token—you can generate a network effect. This effect will develop organically as you grow your community and improve your token. Community members, having a vested interest in your project’s performance, will work toward success if you foster the right culture. You can further enhance your network effect by incentivizing your supporters.
Area 4: Project Growth
When your community and token are thriving and your network effect is in full swing, growth will follow, and the opportunities for your project will skyrocket. Evident growth allows you to generate revenue from your token and attract external capital. This influx of cash enables you to invest in and scale your operations. Ultimately, growth unlocks everything.
Read MoreIn summary, the current crypto model upon which many altcoins are built is becoming obsolete. This is due to unvalidated FDVs (fully diluted valuations) that often provide communities with poor entry points and primarily serve as exit liquidity for pre-market insiders. Additionally, many so-called “utility” projects offer no real utility, creating no buying pressure from the token’s intended purpose.
The market is already showing signs of recognizing this obsolescence. As awareness spreads, altcoins that fail to adapt will face major challenges: their charts will become unappealing, token metrics won’t attract investors, and communities will dwindle, limiting network effects and decreasing volume—a negative cycle that weakens projects further.
If projects do not adapt to these shifts, they risk a slow decline as revenue from volume, OTC fundraising opportunities, and treasury values deplete. Attempting to capitalise on trends by selling nodes or other assets may not be effective if fundamentals are lacking.
The first step toward adapting to this new era is to categorise projects as no utility, future utility, or current utility. If you haven’t launched, a fair launch strategy that prioritises community ownership over insider advantage is critical for activating the two biggest growth levers in crypto: community and token. The old model can only be sustained if FDV is supported by real utility, strong fundamentals, and substantial upside from launch.
If you’ve already launched, consider re-evaluating your growth strategy. Focus on leveraging your two main growth levers—community and token—to mitigate potential losses from market trends.
As this crypto model evolves, a new era of crypto growth begins. Success in crypto is often driven by growth, which is why we see blockchains with similar tech but vastly different market caps. It’s essential to work toward token market fit by focusing on the Magnet Quadfecta—Community, Token, Network Effects, and Growth.
Best of luck, soldiers.
