Thoughts on Token Issuance for Berachain Ecosystem Projects

Recently, multiple projects within the Berachain ecosystem have launched or are preparing to issue tokens, prompting in-depth reflection on the timing and value of token issuance. Although the issuance of new tokens may stimulate economic activity and market speculation, we need to consider its long-term impact more cautiously.

After the token issuance, the project's image in the public eye will inevitably be tied to its price. In the current market environment, most tokens struggle to escape downward pressure, which may directly affect the adoption rate of the product. Ideally, the token should be launched when the product has already shown market fit and is in a phase of rapid growth, serving as a reward for early users while driving further growth.

However, the reality is often more complex. Even with loyal community support, a continuously declining price trend can still affect user adoption. In the current market environment, most tokens are facing a lack of buying interest. Project teams need to seriously consider: who are the potential buyers of the token? If there is no clear answer, it may be necessary to reassess the timing of the issuance.

Community support is certainly important, but its financial capacity is limited and cannot solely sustain the Token price. The project team should focus on long-term survival capability rather than short-term market opportunities. The ideal approach is to create a product that can be profitable, and at the right time, even consider buybacks to create real value for Token holders.

It is important to note that token issuance amplifies every aspect of a project. When the price rises, the project may be in high demand; when the price falls, it may face severe criticism. Therefore, unless the token is essential to the operation of the product (as in some DeFi projects), issuance decisions should be considered carefully.

If you decide to issue a token, it is recommended to adopt the following strategies:

1. Coordinate with other projects within the ecosystem to avoid the simultaneous issuance of multiple tokens.
2. Give the market enough time and space to allow for the flow and rotation of funds.
3. Reasonable valuation, considering going live at break-even or slightly below the private placement valuation.

For projects that are already profitable, it is recommended to prioritize expanding investment, increasing revenue, and optimizing distribution, rather than rushing to issue tokens. Ensure that the project can survive in the long term, ideally achieving real profitability, leaving room for potential buybacks in the future.

It is worth noting that the existence of tokens may affect product adoption rates. Some users may prefer to participate in tokenless projects, looking forward to future airdrop opportunities; while tokens that have seen a price drop may lead users to abandon the project altogether.

In the current market environment, medium market cap (10M-200M) Tokens often find themselves in a difficult price discovery range. Investors either choose stablecoin mining or gamble in high-risk Tokens with very small market caps.

The correct motivation for issuance should be: the product has proven its product-market fit and has a clear roadmap showing how the Token will promote growth. It should not be for short-term considerations such as pressure from investors, community expectations, or team cashing out.

For the Berachain ecosystem, the current number of token issuances may be excessive, which could lead to many teams facing challenges in user adoption and attraction. In the future, there may be two extreme scenarios: either a highly loyal but slowly developing community forms, or future teams may abandon issuing tokens in this ecosystem after seeing the current situation.

Nevertheless, we still support the innovators on Berachain and hope they can achieve long-term success. The crypto industry is a marathon that requires patience and strategy. We hope these thoughts can provide some valuable references for projects within the ecosystem.