Not Another Token Launch: The Value of Sustainable Models Over Quick Profit
Web3 gaming studio Drift Zone has launched its native token, $DT. The token generation event began with initial DEX offerings on February 18, followed by a confirmed listing of $DT on the MEXC cryptocurrency exchange on February 20. The studio has secured additional partnerships with GameFi and Eesee, setting the stage for a successful project.
An average of 5,300 new tokens launched every day between January and early April 2024. New cryptocurrency issuance reached a record high in January 2025, when more than 600,000 new tokens entered the market, up 12-fold compared to January 2024. In a recent X post, CoinGecko cofounder and COO Bobby Ong commented that an average of 50,000 new tokens were minted monthly in 2022 and 2023. Notwithstanding January's 600k record, there were 400,000 new tokens a month in the final quarter of 2024.
Long-term engagement ensures project sustainability
Why does the announcement by Drift Zone involve an event beyond yet another token launch? Drift Zone's exclusive 'Early Adopter' campaign aims to prevent immediate token sell-offs and encourage long-term engagement by incentivizing both active users and passive investors. A wallet snapshot is taken on a specific date, and holders who grow or maintain their token balance over a fixed term qualify for bonus tokens, airdrops, and additional allocations.
Users who actively engage with Drift Zone will receive rewards based on their in-app token use. Feature interactions, in-app transactions, and other engagement metrics will determine eligibility for tiered rewards.
Organizations are making more effort to stand out as the number of token launches continues to surge. Platforms like pump.fun are contributing to the adverse phenomenon by making token creation effortless. While the natural exuberance of the bull market is an undeniable factor, today's diverse token array thinly spreads investor attention and liquidity, resulting in disjointed price movements. More established altcoins are not demonstrating the great pumps of previous bull runs, reflecting thin crypto market liquidity. The soaring number of cryptocurrencies has created token dispersion, leading analysts to predict a delayed altcoin season. At the current issuance rate, there could be more than a billion tokens on the market in the next five years.
In addition to the almost exponential rise of new tokens, traditional finance institutions have entered the crypto space, altering the liquidity rotations witnessed in earlier cycles and changing capital flow in the market. Profits from Bitcoin's price surge flowed into ether before entering the speculative memecoin segment during previous bull markets, but growing TradFi participation has transformed liquidity flow dynamics.
Features of a sustainable token model
Against this backdrop, building sustainable token models is more critical than ever. A well-crafted model can align stakeholders' interests, ensure fair value distribution, and drive user engagement, all of which are crucial for a project's sustainability. The main principles of a sustainable model include creating value and utility, inflation control, and community involvement. Sustainable tokens have an obvious and compelling utility within the ecosystem that has created them. The utility drives demand for the token and increases its value, which stems from its utilization in the network and not from mere speculation.
Tokens that are used to pay for network transaction fees and participate in the consensus mechanism, whatever it is, have utility. Adoption directly reflects the use cases of the token: the more use cases, the more widespread adoption will be, facilitating consistent demand.
The platform must manage the token supply carefully to maintain value. Inflation erodes token value, while deflationary mechanisms, periodic token burns, and capped supply help preserve long-term worth. For example, quarterly or annual token burns where a portion of coins are permanently removed from circulation can help maintain value over time. Ideally, the coin's utility within the ecosystem will expand simultaneously.
Finally, sustainable token models incorporate community governance mechanisms to ensure the network's evolution in alignment with user needs. Token holders participate in interest rate changes, protocol upgrades, and other decision-making processes. Decentralized governance models can help cryptocurrencies adapt to the dynamically developing DeFi landscape, making sure they remain relevant.
The risks of short-sightedness: Rug pulls, underwhelming projects, soured investor sentiment
We need money to live, obviously, but the sole focus on quick profit is very damaging to the crypto industry as a whole. It's enough to recall massive scams like OneCoin and the SQUID token as cases in point. Rug pulls remain common in the memecoin space. This is a crypto scam where a project's founder or team suddenly disappears, taking all of the funds invested up to that point. Of course, it usually happens after a project has raised a substantial amount. AnubisDAO raised ether worth $60 million in return for ANKH tokens, and the funds were sent to a different address within less than 24 hours of the project launch. Without liquidity, the ANKH token price crashed to zero, and the funds were never recovered.
The SQUID token capitalized on erroneous associations with the eponymous Netflix series. After investors put in a total of $3.3 million, the developers drained the liquidity pools and disappeared with the funds.
These scams pale compared to the Ponzi scheme OneCoin, which raised $4 billion and defrauded investors through false promises of returns. Founder Ruja Ignatova disappeared without a trace in October 2017 and remains on the FBI's 10 Most Wanted Fugitives list.
Even if no scam occurs, a lack of foresight can be detrimental to a promising project. Tokens need real value and use cases to survive, but active community engagement is a must for projects to thrive.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Text source: Crypto Daily™
