Company’s tokenization step by step. 8 tips to help you get funding through Blockchain

Iwo Hachulski

06 Jul 2020
Company’s tokenization step by step. 8 tips to help you get funding through Blockchain

Tokenization, by the most popular definition a form of transforming the value of business into digital resources, evokes more and more interest among entrepreneurs. Tokenization may be particularly important for entities that are considering alternative paths to VC or Business Angel to obtain financing for the development of their companies. The post-pandemic crisis and the new reality faced by business founders may encourage them to delve deeper into the subject, especially in the context of scarce funds of traditional investors. The company's tokenization often provides an easier and quicker opportunity to raise funds for further investments. Is this a solution worth considering? Where to start in order to tokenize your business? In this article we present 8 steps to implement the whole process together with specific examples of the tokenized projects.

Preliminary analysis

Make a preliminary analysis to assess your company's financial needs. Specify what you want to raise money for. Identify your target group, competition and market and decide if it is prospective enough. Describe your business or product and consult it with blockchain experts. Answering the question - to whom your issue should be directed - will also allow you to undertake the first analyses related to a later marketing campaign.

Choice of the type of issue and legal form

An important issue is the choice of the type of blockchain tokenization and legal form of the issue. A number of solutions are available, including ICO (initial coin offering), STO (security token offering) and ETO (equity token offering). ICO does not guarantee any ownership rights to the token buyer, and the issue and purchase of the offered tokens can be done almost entirely anonymously. STO and ETO, on the other hand, secure the purchaser through legal solutions, thereby transferring shares in the form of the purchased token. Thanks to the verification of both companies and investors they provide greater security for each party. They are in a way hybrid solutions - a combination of cryptic ICOs with more traditional investment fundraising.

Token economy

The next step is to identify the so-called token economy, which defines the type of emission. It consists of a number of elements:

Define a target, minimum and maximum amount to be collected within the issue. It is important to have an understanding of economic law. Choose the appropriate jurisdiction or law firm that will guide you through the process of establishing a company and a bank account in a given country, taking into account specific administrative requirements. The Nextrope team cooperates with law firms specialising in this area, so you do not have to waste time looking for top-notch lawyers specialising in tokenization.

Decide in which currencies customers can buy tokens. Will they be just cryptic currencies (specify which ones) or will they also be traditional currencies? The most common solutions are ETH, BTC, USDC and USDT. Depending on your preferences, the implementation will be more or less time-consuming.

Companies often lend tokenization on their infrastructure as part of IEO (initial exchange offering). This approach is unfortunately very limited and is not suitable for more legally complicated solutions. The main obstacles for companies considering IEO tokenization are primarily:

- Sharing revenue with another revenue broker.

- Loss of potential to build their own community.

- Problems with handling sensitive data.

Decide within which model the tokens you emit will be functioning. Options include the standard ERC20 or the new ERC1400 format. The first one guarantees that the tokens will not differ from each other in any way. The second one makes the tokens non-fungible. Each of them is unique and marked with a serial number.

Determine the benefits of purchasing your tokens to buyers and how large the token circulation will be on the market.

Start cooperating with a tax and financial advisor, who will develop the most optimal financial constructions for you. At Nextrope we cooperate with many advisors and we will be happy to connect you with them.


Take care of KYC (Know Your Customer) and AML (Anti-Money Laundering) processes. These are two key elements in the entire tokenization process. The first one is a legal procedure, obliging legal entities (in this case you) to identify their customers and obtain true and accurate information required to receive funds interested in your business. The second one means taking action to verify the origin of the funds received. It is important that the investor platform you plan to use is integrated with KYC and AML service providers. This is the case with solutions offered by Nextrope.

Your needs and expectations

Discuss with your team of specialists what range of services you need. At Nextrope, you can expect not only technological support, but also consultations and preparation of the strategy of the tokenization process. Your platform will be fully personalized for your needs and requirements in relation to the tokenization itself. You will receive a fully customized landing page and an extensive, personalized administrator panel. You will have access to all the statistics, data and KYC verification at your fingertips, in the most intuitive place.

Project's White Paper

Create a fully comprehensive White Paper of your project, based on the advice of the experts' team. Remember to describe the developed token economics in detail. If several dozen pages of the document is a challenge for you, the Nextrope business team is ready to take part in the process of writing the White Paper and help you describe all the most important features of the project.

Marketing Campaign

Once the technical part is ready, develop and start a marketing campaign. Take care of a responsible approach to marketing. Pay attention to the appropriate commission system designed for your customers. Create a loyalty system, withdrawing bonuses to users on the amount paid. Build, motivate and manage your community. Make sure that information about your issue is available on all ICO/STO/ETO listing sites. Participate in industry conferences and focus on publishing your own content and producing industry reports. Showcase the human side of the blockchain-based business by organizing live and video conferences in social media and collaborating with industry influencers.

Further development

Usually, after the issue of your tokens is completed, the monitoring by the team providing technological solutions will end. Do not let this happen to you. Take care of the further development and long term development of your product as well as contact with the community - to continue to expand your business capabilities and resources. Good luck! is a software house focused on FinTech solutions market. Our team has already conducted over 10 tokenization processes, both in Poland and abroad. We are happy to help your company with tokenization using blockchain technology. Click here and tell us more about your project.

Nextrope Insights is a weekly newsletter on Fintech. You’ll receive market analysis on Blockchain, AI, Crypto, and other Fintech sectors every week! Our newsletter is subscribed by VC investors, startup founders, and industry experts. Yet you’re more than welcome even if you just started learning more about Fintech. You can join it here.

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Token Engineering Process

Kajetan Olas

13 Apr 2024
Token Engineering Process

Token Engineering is an emerging field that addresses the systematic design and engineering of blockchain-based tokens. It applies rigorous mathematical methods from the Complex Systems Engineering discipline to tokenomics design.

In this article, we will walk through the Token Engineering Process and break it down into three key stages. Discovery Phase, Design Phase, and Deployment Phase.

Discovery Phase of Token Engineering Process

The first stage of the token engineering process is the Discovery Phase. It focuses on constructing high-level business plans, defining objectives, and identifying problems to be solved. That phase is also the time when token engineers first define key stakeholders in the project.

Defining the Problem

This may seem counterintuitive. Why would we start with the problem when designing tokenomics? Shouldn’t we start with more down-to-earth matters like token supply? The answer is No. Tokens are a medium for creating and exchanging value within a project’s ecosystem. Since crypto projects draw their value from solving problems that can’t be solved through TradFi mechanisms, their tokenomics should reflect that. 

The industry standard, developed by McKinsey & Co. and adapted to token engineering purposes by Outlier Ventures, is structuring the problem through a logic tree, following MECE.
MECE stands for Mutually Exclusive, Collectively Exhaustive. Mutually Exclusive means that problems in the tree should not overlap. Collectively Exhaustive means that the tree should cover all issues.

In practice, the “Problem” should be replaced by a whole problem statement worksheet. The same will hold for some of the boxes.
A commonly used tool for designing these kinds of diagrams is the Miro whiteboard.

Identifying Stakeholders and Value Flows in Token Engineering

This part is about identifying all relevant actors in the ecosystem and how value flows between them. To illustrate what we mean let’s consider an example of NFT marketplace. In its case, relevant actors might be sellers, buyers, NFT creators, and a marketplace owner. Possible value flow when conducting a transaction might be: buyer gets rid of his tokens, seller gets some of them, marketplace owner gets some of them as fees, and NFT creators get some of them as royalties.

Incentive Mechanisms Canvas

The last part of what we consider to be in the Discovery Phase is filling the Incentive Mechanisms Canvas. After successfully identifying value flows in the previous stage, token engineers search for frictions to desired behaviors and point out the undesired behaviors. For example, friction to activity on an NFT marketplace might be respecting royalty fees by marketplace owners since it reduces value flowing to the seller.


Design Phase of Token Engineering Process

The second stage of the Token Engineering Process is the Design Phase in which you make use of high-level descriptions from the previous step to come up with a specific design of the project. This will include everything that can be usually found in crypto whitepapers (e.g. governance mechanisms, incentive mechanisms, token supply, etc). After finishing the design, token engineers should represent the whole value flow and transactional logic on detailed visual diagrams. These diagrams will be a basis for creating mathematical models in the Deployment Phase. 

Token Engineering Artonomous Design Diagram
Artonomous design diagram, source: Artonomous GitHub

Objective Function

Every crypto project has some objective. The objective can consist of many goals, such as decentralization or token price. The objective function is a mathematical function assigning weights to different factors that influence the main objective in the order of their importance. This function will be a reference for machine learning algorithms in the next steps. They will try to find quantitative parameters (e.g. network fees) that maximize the output of this function.
Modified Metcalfe’s Law can serve as an inspiration during that step. It’s a framework for valuing crypto projects, but we believe that after adjustments it can also be used in this context.

Deployment Phase of Token Engineering Process

The Deployment Phase is final, but also the most demanding step in the process. It involves the implementation of machine learning algorithms that test our assumptions and optimize quantitative parameters. Token Engineering draws from Nassim Taleb’s concept of Antifragility and extensively uses feedback loops to make a system that gains from arising shocks.

Agent-based Modelling 

In agent-based modeling, we describe a set of behaviors and goals displayed by each agent participating in the system (this is why previous steps focused so much on describing stakeholders). Each agent is controlled by an autonomous AI and continuously optimizes his strategy. He learns from his experience and can mimic the behavior of other agents if he finds it effective (Reinforced Learning). This approach allows for mimicking real users, who adapt their strategies with time. An example adaptive agent would be a cryptocurrency trader, who changes his trading strategy in response to experiencing a loss of money.

Monte Carlo Simulations

Token Engineers use the Monte Carlo method to simulate the consequences of various possible interactions while taking into account the probability of their occurrence. By running a large number of simulations it’s possible to stress-test the project in multiple scenarios and identify emergent risks.

Testnet Deployment

If possible, it's highly beneficial for projects to extend the testing phase even further by letting real users use the network. Idea is the same as in agent-based testing - continuous optimization based on provided metrics. Furthermore, in case the project considers airdropping its tokens, giving them to early users is a great strategy. Even though part of the activity will be disingenuine and airdrop-oriented, such strategy still works better than most.

Time Duration

Token engineering process may take from as little as 2 weeks to as much as 5 months. It depends on the project category (Layer 1 protocol will require more time, than a simple DApp), and security requirements. For example, a bank issuing its digital token will have a very low risk tolerance.

Required Skills for Token Engineering

Token engineering is a multidisciplinary field and requires a great amount of specialized knowledge. Key knowledge areas are:

  • Systems Engineering
  • Machine Learning
  • Market Research
  • Capital Markets
  • Current trends in Web3
  • Blockchain Engineering
  • Statistics


The token engineering process consists of 3 steps: Discovery Phase, Design Phase, and Deployment Phase. It’s utilized mostly by established blockchain projects, and financial institutions like the International Monetary Fund. Even though it’s a very resource-consuming process, we believe it’s worth it. Projects that went through scrupulous design and testing before launch are much more likely to receive VC funding and be in the 10% of crypto projects that survive the bear market. Going through that process also has a symbolic meaning - it shows that the project is long-term oriented.

If you're looking to create a robust tokenomics model and go through institutional-grade testing please reach out to Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.


What does token engineering process look like?

  • Token engineering process is conducted in a 3-step methodical fashion. This includes Discovery Phase, Design Phase, and Deployment Phase. Each of these stages should be tailored to the specific needs of a project.

Is token engineering meant only for big projects?

  • We recommend that even small projects go through a simplified design and optimization process. This increases community's trust and makes sure that the tokenomics doesn't have any obvious flaws.

How long does the token engineering process take?

  • It depends on the project and may range from 2 weeks to 5 months.

What is Berachain? 🐻 ⛓️ + Proof-of-Liquidity Explained


18 Mar 2024
What is Berachain? 🐻 ⛓️ + Proof-of-Liquidity Explained

Enter Berachain: a high-performance, EVM-compatible blockchain that is set to redefine the landscape of decentralized applications (dApps) and blockchain services. Built on the innovative Proof-of-Liquidity consensus and leveraging the robust Polaris framework alongside the CometBFT consensus engine, Berachain is poised to offer an unprecedented blend of efficiency, security, and user-centric benefits. Let's dive into what makes it a groundbreaking development in the blockchain ecosystem.

What is Berachain?


Berachain is an EVM-compatible Layer 1 (L1) blockchain that stands out through its adoption of the Proof-of-Liquidity (PoL) consensus mechanism. Designed to address the critical challenges faced by decentralized networks. It introduces a cutting-edge approach to blockchain governance and operations.

Key Features

  • High-performance Capabilities. Berachain is engineered for speed and scalability, catering to the growing demand for efficient blockchain solutions.
  • EVM Compatibility. It supports all Ethereum tooling, operations, and smart contract languages, making it a seamless transition for developers and projects from the Ethereum ecosystem.
  • Proof-of-Liquidity.This novel consensus mechanism focuses on building liquidity, decentralizing stake, and aligning the interests of validators and protocol developers.


EVM-Compatible vs EVM-Equivalent


EVM compatibility means a blockchain can interact with Ethereum's ecosystem to some extent. It can interact supporting its smart contracts and tools but not replicating the entire EVM environment.


An EVM-equivalent blockchain, on the other hand, aims to fully replicate Ethereum's environment. It ensures complete compatibility and a smooth transition for developers and users alike.

Berachain's Position

Berachain can be considered an "EVM-equivalent-plus" blockchain. It supports all Ethereum operations, tooling, and additional functionalities that optimize for its unique Proof-of-Liquidity and abstracted use cases.

Berachain Modular First Approach

At the heart of Berachain's development philosophy is the Polaris EVM framework. It's a testament to the blockchain's commitment to modularity and flexibility. This approach allows for the easy separation of the EVM runtime layer, ensuring that Berachain can adapt and evolve without compromising on performance or security.

Proof Of Liquidity Overview

High-Level Model Objectives

  • Systemically Build Liquidity. By enhancing trading efficiency, price stability, and network growth, Berachain aims to foster a thriving ecosystem of decentralized applications.
  • Solve Stake Centralization. The PoL consensus works to distribute stake more evenly across the network, preventing monopolization and ensuring a decentralized, secure blockchain.
  • Align Protocols and Validators. Berachain encourages a symbiotic relationship between validators and the broader protocol ecosystem.

Proof-of-Liquidity vs Proof-of-Stake

Unlike traditional Proof of Stake (PoS), which often leads to stake centralization and reduced liquidity, Proof of Liquidity (PoL) introduces mechanisms to incentivize liquidity provision and ensure a fairer, more decentralized network. Berachain separates the governance token (BGT) from the chain's gas token (BERA) and incentives liquidity through BEX pools. Berachain's PoL aims to overcome the limitations of PoS, fostering a more secure and user-centric blockchain.

Berachain EVM and Modular Approach

Polaris EVM

Polaris EVM is the cornerstone of Berachain's EVM compatibility, offering developers an enhanced environment for smart contract execution that includes stateful precompiles and custom modules. This framework ensures that Berachain not only meets but exceeds the capabilities of the traditional Ethereum Virtual Machine.


The CometBFT consensus engine underpins Berachain's network, providing a secure and efficient mechanism for transaction verification and block production. By leveraging the principles of Byzantine fault tolerance (BFT), CometBFT ensures the integrity and resilience of the Berachain blockchain.


Berachain represents a significant leap forward in blockchain technology, combining the best of Ethereum's ecosystem with innovative consensus mechanisms and a modular development approach. As the blockchain landscape continues to evolve, Berachain stands out as a promising platform for developers, users, and validators alike, offering a scalable, efficient, and inclusive environment for decentralized applications and services.


For those interested in exploring further, a wealth of resources is available, including the Berachain documentation, GitHub repository, and community forums. It offers a compelling vision for the future of blockchain technology, marked by efficiency, security, and community-driven innovation.


How is Berachain different?

  • It integrates Proof-of-Liquidity to address stake centralization and enhance liquidity, setting it apart from other blockchains.

Is Berachain EVM-compatible?

  • Yes, it supports Ethereum's tooling and smart contract languages, facilitating easy migration of dApps.

Can it handle high transaction volumes?

  • Yes, thanks to the Polaris framework and CometBFT consensus engine, it's built for scalability and high throughput.