The crypto community has seen many ways of getting tokens to market, from initial coin offering (ICO) pumps to exchange offerings and high-profile airdrops. What if it's time for a new system?
The ICO boom of 2017 has cemented itself in crypto history as one of the most profitable yet dangerous times to have been an investor. It seemed as though, at the peak, all that was required was a whitepaper to raise millions of dollars overnight to build out a tokenized dream. Examples such as Wax Blockchain, the host of many innovative games and Polkadot, a leading proof-of-stake blockchain, were funded via ICO. Unfortunately, these listings also included scams with over 400 million dollars projected stolen from unsuspecting investors.
Since then, the crypto market and, more specifically, the token market have changed how it operates. Since the summer of 2020, coined "DeFi Summer," token launches have been done a new way, the airdrop. A token airdrop is when a project decides to issue a token and grants specific wallet addresses a calculated number of tokens, given their activity on the platform. Projects have seen success with this model as some early adopters have walked away with tens of thousands of dollars or more—the best recent examples are the dydx exchange airdrop and Ethereum Name Service (ENS) airdrop. Difficulties arose with the airdrop method as the public began to profit from these airdrops and do everything to claim more. These Web3 users are dubbed "airdrop hunters."
The next generation
Before deciding on the "best" method of token creation, we need to understand what the launch of a token is trying to accomplish.
Back in 2017, the goal was to raise funds for future development. This can be thought of as seed funding for an exciting venture. Ultimately, ICOs accomplished this goal with only a few hiccups. The new age token has a different purpose: to decentralize governance. With each token holder joining others in governing the protocol, token creation is also the invention of a decentralized autonomous organization (DAO). Now we can think of an airdrop as an invite to build alongside the founding team. What about the airdrop hunters? When airdrop hunters receive this monetary invite to govern, they don't participate in the DAO but instead, sell off their newfound tokens for a profit. This pattern ultimately diminishes the purpose of an airdrop and a token launch.
It may be time for a new leap in the token world — letting the DAO decide.
Popular decentralized finance (DeFi) trading terminal DexGuru has elected to implement a new approach to a token launch, letting the DAO decide when, how and where the token is released.
The DexGuru DAO, also known as GuruDAO, was created on March 30, 2022, when past users of the platform and a shortlist of others were granted access to mint a "Season's Pass NFT" to kickstart the DAO. Unlike an airdrop, these NFTs did not trigger a wave of airdrop hunters but instead awakened the DexGuru community to initiate GuruDAO operations and decision-making.
All holders of these NFTs have voting rights in the DAO bootstrap phase and are now in complete control of the future of DexGuru. With the operating team acting as a sub-DAO, we are beginning to see the phenomenon of a truly decentralized product come to life. Over the coming weeks, we'll see GuruDAO members submit proposals and vote on whether there should be a GURU token, how it should be released and other token details.
The founding team believes that this has removed airdrop hunters from the equation and has created a more decentralized protocol in Web3. Instead of a concentrated group of insiders deciding on important issues such as tokenomics, token release date and initial liquidity — the DAO is kickstarting decision making from day one.
To join the GuruDAO bootstrap phase, buy yourself a secondhand "Season's Pass NFT" on Opensea. Owning one of these NFTs will let you join a community of 12 thousand other GuruDAO members in shaping the product's future.
Which method do you think is the best for a token launch?