Berachain founder reflects: Don't let tokens drag down your project

Author: @SmokeyTheBera, @berachain Chief

Compiled by: zhouzhou, BlockBeats

Editor’s Note: This article discusses the recent phenomenon of multiple projects issuing tokens within the Berachain ecosystem, reminding founders not to issue tokens blindly. Tokens should drive growth when the product achieves market fit; otherwise, it may affect user adoption. In a sluggish market environment, with limited community funds, falling token prices can damage product image. Token issuance should avoid competition at the same time, ensure reasonable valuation, and focus on long-term value rather than short-term exits. The author supports the development of Berachain but emphasizes that success requires patience and strategy, suggesting that the team prioritize ensuring profitability and user growth.

The following is the original content (for the sake of readability and understanding, the original content has been organized):

Friends of Berachain, this is my first attempt at writing in article form. This article mainly targets the Berachain ecosystem, but I hope some of the points within it can inspire the wider community, especially those projects considering issuing tokens.

Recently, I have seen multiple teams within the Berachain ecosystem launching tokens or preparing to initiate new token offerings in the coming weeks, totaling about 8 projects. From a certain perspective, this is worth celebrating—new tokens can stimulate economic activity, spark market speculation, and even promote the growth of protocols. Tokens may bring about a wealth effect, and the Berachain ecosystem can benefit from this if the local token performs well.

On the other hand, we should broaden our perspective and think deeply about the real value that token issuance can bring. After issuing tokens, the recognition of your product in the eyes of the public will inevitably be tied to its price. Very few projects can escape this rule, unless they have no direct competitors in the market or are very early pioneers (such as projects like 1Inch and Compound).

In the current on-chain environment, the vast majority of altcoins (and even the entire market) cannot escape the influence of market gravity, and the sluggish price of your token may directly affect the adoption rate of the product.

The timing of token issuance is crucial ###.

Ideally, tokens should be launched when the product has already demonstrated product-market fit and is at a point of explosive growth. It should be a reward for early users, thanking them for helping the product reach this stage. At the same time, it should also serve as a tool to drive asymmetric growth, rather than being a burden that hinders adoption.

Next, I want to talk about some real issues that are usually only mentioned in private conversations.

The market waits for no one, and the community can’t save you.

No matter how loyal your community is, a continuously declining price curve will affect adoption. Right now, most tokens are following a trend of “only down, no up.” More importantly, in the Berachain ecosystem, your token belongs to “alt on an alt,” and top chain tokens like Solana are struggling to find buyers. Are you sure this is a good time to launch?

You should seriously ask yourself a question: “Who is the marginal buyer of my token?”

If you do not have a clear and differentiated answer, and cannot ensure that the token distribution will reach new potential buyers, then I suggest you think it over again and not overlook the long-term impact for the sake of short-term “dopamine stimulation.” Because the answer is definitely not “community.”

The community will support you, will use on-chain products, and will also invest opportunistically. However, the community’s funds are limited, and it cannot save your tokens. The project team needs to focus on long-term viability rather than short-term market timing.

Some say that market timing is unpredictable, and I partially agree. But you can create a “default survivable” product that can be profitable, and even buy back at the right time to truly create value for token holders (of course, provided it is legal and compliant).

I want to emphasize that issuing tokens will not make your work easier; on the contrary, it will amplify everything:

• If the token price rises, your product will be like an S-tier king, the team invincible, and everyone will be chasing after you.
• If the token price drops, you will be called a scammer, the product will be deemed worthless, the team will be called idiots, and some people may even attack you for having received venture capital funding.

Of course, the situation is not purely black and white; some protocols do have a core requirement for tokens, such as certain DeFi products that need tokens to function properly. However, these cases are the minority and do not apply to most projects.

How to properly launch a token issuance?

If you really decide to issue a token, at least pay attention to the following points:

• Coordinate with other projects within the ecosystem, and do not schedule the issuance dates of multiple tokens too closely to avoid diluting market demand.
• Give the market time and space to allow funds to flow and rotate, instead of rushing to compete for market share.
• Do not overestimate valuations. If you have already engaged in private financing, in the current market environment, it may be a more reasonable choice to go for a flat valuation.

Key Points Summary

• If your product is already making money, increase investment, boost revenue, and optimize distribution, rather than hastily issuing tokens.
• Let the product remain viable by default, preferably being truly profitable and leaving the possibility for future repurchases.
• The existence of tokens may affect product adoption. Some users may actively participate in projects without tokens (anticipating future airdrops), but if they see a token whose price is declining, they may directly abandon the project.
• In the current market environment, tokens in the market capitalization range of 10M-200M are essentially in a “no man’s land” of price discovery, with everyone either mining stablecoins or speculating in extremely low market cap shitcoins.

Wrong motives for issuing tokens: pressure from investors, community expectations, and the team wanting to cash out.

Correct motivation for issuing tokens: the product has proven PMF and has a clear roadmap showing how the token facilitates growth.

I have concerns about the Berachain ecosystem.

Currently, the number of token issuances within the Berachain ecosystem is excessive, and I worry that this will lead many teams to “shoot themselves in the foot” in terms of adoption and traction. Ultimately, this may create two extremes:

• One extreme is that a highly loyal community forms within the Berachain ecosystem, slowly developing and growing.
• The other extreme is that the future team, after seeing the current situation, is discouraged and chooses not to issue tokens on Berachain.

Of course, looking on the bright side, these tokens may exceed expectations, drive product growth, or at least allow the founders within the ecosystem to learn real lessons from failure.

I am writing this article because many people have privately asked me about my thoughts on the recent TGE of the Berachain ecosystem. I have always supported the Builders on Bera, and I hope they succeed, but I hope even more that they achieve long-term success.

Although this sounds a bit like a cliché, the cryptocurrency industry is a marathon, not a sprint. We have been struggling in this industry for three years and understand the truth of it.