At Eclipse Fi, we believe in focusing on the key pillars of the sustainability of a token launch and implementing the right mechanisms and processes to ensure better outcomes. Our mission is to enable proper user acquisition and alignment to support the long-term sustainability of token launches. Long-term success depends on several key factors for projects: community engagement, liquidity, price discovery, utility, and a shift in mindsets from short-term flipping to long-term engagement with your token.

Building your vision as a founder is hard work and requires many sacrifices. In our conversations with founders we find there are common themes around how to think about value when it comes to fundraising and token launches. Whether it is a percentage of equity or tokens based on an agreed valuation, it is important to understand how the token accrues value for its users and for the project itself.  For most founders, the token launch event is really about marketing, focusing on distribution and user acquisition.  

Value Extraction

The bottom line is that investors extract value from the project through their investment regardless of what form it takes, be that equity or tokens.  Whether VCs, Angel, or Seed, investors have a specific valuation and time scale in mind for realising their investments and this is often not aligned with the project’s long-term success.

There is immense pressure on start-ups to launch their token and list on exchanges in order for investors to realise their investment. In the world of crypto, it's not just about "getting paid in tokens"; launches are also an opportunity to extract value in a range of ways. 

Launchpads can push projects to edit their tokenomics in unfavourable ways to create token multiples (think pump and dump style charts) where they can then sell into that retail hype. Launchpads also involve a lot of kickbacks and poor advice to shape things to their whim, since they are also the key holders when it comes to selling tokens.

We have seen even worse things with Exchanges and their IEOs, for example with contracts for volume plus x guarantees, with predatory market-making confiscation clauses where well-known exchanges set unreasonable parameters and seize tokens etc. etc.  The list of market abuses by exchanges is a long and well-known story in crypto.

This trilemma of extraction results in short-term flipping rather than long–term engagement by stakeholders. The flipping is related to the way that incentives are aligned.  Marketing strategies trains retail users, setting up systems for churn, taking advantage of both retail users and projects.

Stakeholder Alignment

At Eclipse Fi, we believe that there is another way to align stakeholders interests and ensure the long-term viability and success of projects and their users.  We aim to achieve this by:

1. Longer-Term User Alignment: Tokens are powerful tools to align and incentivize communities. Full stop. Airdrops and token pre-sales can help to select users who actively align with and contribute to the protocol's vision and its success. Marketing should be about user alignment rather than just acquisition.
2. Ensuring Impactful Token Distribution: Proper design and distribution methods are essential to ensure tokens reach the right individuals and deter short-term profit-seekers (alpha farming). This includes mechanisms that manipulate supply and demand to promote sustainability within Eclipse's launch projects.
3. Eliminating Low-Float Launches: Sustainability requires well-designed token-economics and distribution strategies as well as supply and demand management to maintain integrity and reduce market manipulation. We focus on eliminating low-float launches.
4. Deep Liquidity for Longevity: Achieving strong liquidity is a top priority for us. We aim to help deepen liquidity post token launch by directing DEX liquidity incentives to projects. We work with market-makers and exchanges to achieve this for the projects we launch.
5. Prioritising Correct Price Discovery: Accurate price discovery is crucial for token longevity. It is important to balance demand and supply, avoiding FOMO-driven spikes and ensuring a stable price trajectory.
6. Utility: Our emphasis is on tokenomics that offer real utility from launch, attract long-term users, contribute to our overall success as a protocol and as a project. Utility is considered a vital part of our due diligence application process for all projects. 
7. Long-Term Mentality: Projects should move away from short-term flip games. Branding and marketing efforts are geared towards attracting users who are committed to the long-term growth and success of your project.
8. Embracing Community-Driven Mechanisms and Innovation: Community input is central to designing inclusive mechanisms for token launches. By prioritising community interests, we increase sustainability and ensure lasting support from engaged users.

Eclipse Fi’s approach to launch sustainability is firmly rooted in industry best practices. From ensuring meaningful token distribution to prioritising liquidity, correct price discovery, and genuine utility, every aspect is carefully reviewed and optimised through our DD process prior to launch. 

The trilemma of value extraction is not a new dilemma in crypto; but it is a destructive force that is slowly sucking the life out of founders, projects, investors and communities. The shift away from short-term gains towards community-driven innovation underscores Eclipse Fi’s commitment to integrity and long-term success.  

Simon Chadwick

Is CEO of Eclipse Fi, a revolutionary hub for interchain token launches, bringing value back to early adopters. Simon is passionate about community-driven strategy, marketing and innovation.

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