How to Build a Strong Community Around Tokenized Assets

Karolina

10 Jul 2023
How to Build a Strong Community Around Tokenized Assets

For any project to succeed, including tokenized assets, it is crucial to establish a solid community. Amidst the advancing realms of blockchain, artificial intelligence, and cryptocurrencies, tokenization has surfaced as an influential means to digitally embody real-world assets. Tokenized assets provide numerous perks like improved liquidity, fractional ownership, and better transferability.

The Significance of Community in Tokenized Asset Success

The importance of community

A tokenized asset's success greatly depends on the vigor and involvement of its community. A dynamic community acts as the main driving element for adoption, liquidity, and overall appreciation of the asset's value. Here are some reasons why community plays a crucial role in the realm of tokenized assets:

The importance of Community
  • Network Effect: An expanding community attracts a greater number of participants, generating a network effect that enhances the asset's visibility and liquidity. As the community increases in size, the asset gains traction and piques the interest of potential investors and users.
  • Trustworthiness and Credibility: A robust community establishes trust and credibility for a tokenized asset. When prospective investors observe an engaged, supportive community, they perceive the asset as legitimate and dependable, resulting in increased investment and adoption.
  • Constructive Feedback: Members of the community deliver valuable feedback, insights, and suggestions regarding enhancements to tokenized assets. They can propose new features, pinpoint possible issues, and contribute to the overall development and progression of the asset.
  • Advocacy and Publicity: An enthusiastic, proactive community serves as a champion for tokenized assets. Community members often become brand promoters who raise awareness and market the asset throughout their networks. Their eagerness to share recommendations through word-of-mouth can greatly impact the growth of assets.

Community-driven projects vs centralized projects

Tokenized assets can emerge from either community-driven or centralized projects. Grasping the distinction between these two types is vital to understanding how communities influence the success of tokenized assets.

Community-driven projects require active involvement from members in decision-making processes. Such projects are generally decentralized and dependent on consensus-based governance models, wherein token holders possess voting rights that exert influence over project decisions. In these settings, communities play an essential part in determining an asset's course and promoting its expansion.

In contrast, centralized projects follow a top-down strategy, with decision-making processes controlled by central authorities or teams. Although these projects can still involve a community, their role in governance and decision-making is usually restricted. Nevertheless, a vibrant and engaged community can still contribute valuable feedback and support to centralized projects, which enhances the chance of success for the asset.

Tactics for Developing a Robust Community Around Tokenized Asset

Tactics for Developing a Robust Community Around Tokenized Asset

Establishing a Comprehensive Vision and Mission

Initiating community-building entails forming an unequivocal vision and mission for your tokenized asset. This covers its reason for existence, value offering, and long-range objectives. By effectively conveying the positives and potential of the asset, you will draw in those who share your project's aims. 

Appealing Content and Communication

Producing and disseminating appealing content is crucial to attracting and retaining community members. Maintain a prominent online presence through a devoted blog and proactive social media channels. 

Token Utility incentives

Ensuring meaningful utility for your token is crucial for increasing community involvement. Design tokenomics that correspond with the asset's purpose while incentivizing active participation from community members. 

Community Events and Undertakings

Coordinating community events and tasks cultivates a sense of inclusion and stimulates interaction among members. Launch opportunities for networking, knowledge exchange, and cooperation. 

Open and Agile Communication

Openness and agile communication are crucial for trust-building and sustaining a robust community. Keep the community well-informed about project advancements, milestones, and potential obstacles. 

Influencers and Partnerships

To substantially expand the reach and influence of your tokenized asset community, it is crucial to collaborate with influencers and forge strategic partnerships. Gaining support from influencers and reputed companies in the blockchain and cryptocurrency realms can boost awareness, establish credibility, and draw a broader audience. Take into account these methods:

Teaming up with influencers and thought leaders

Engaging industry-respected influencers and thought leaders can facilitate promotion of your tokenized asset, as they possess credibility and hold considerable influence over their followers.

Developing strategic partnerships

Mutual benefits and growth can result from strategic partnerships with well-established blockchain projects, businesses, or organizations. Such collaborations can boost your tokenized asset's credibility, enable access to new markets, and generate integration opportunities. Reflect on these strategies:

  1. Pursue partnerships with prominent blockchain projects or companies: Identify projects or firms that compliment your tokenized asset's offering or cater to a similar target group. Look into partnership possibilities that involve cross-promotion, combined marketing endeavors, or service integration.
  2. Work together on joint initiatives or integration options: In collaboration with partner organizations, embark on joint ventures such as co-hosted events, cooperative research projects, or the development of compatible solutions. Integrating services or products can generate added value for both communities.

Regulating Community Interaction and Providing Support

Efficient community moderation and responsive support are essential in maintaining an engaged and healthy community surrounding your tokenized asset. Ensuring that discussions remain focused, polite, and in line with the project's objectives is the goal of community moderation. Support systems play a vital role in promptly addressing community questions, technical concerns, and other issues. Keep these strategies in mind:

Implementing community moderation guidelines

Implementing community moderation guidelines

Setting clear community moderation guidelines fosters effective communication and acceptable behavior within your community. By establishing and upholding these guidelines, an inclusive and amiable atmosphere is created. 

Providing prompt support

Swift and proficient support is crucial in retaining community satisfaction and trust. Establish means for community members to request assistance and guarantee that their inquiries and concerns receive prompt attention. 

Enhancing and Maintaining the Community

The initial stage of constructing a solid community is crucial, but equally vital for your tokenized asset's lasting success is the ability to scale and maintain that community. As your project expands, establish approaches that not only facilitate community growth but also promote continuous engagement. Consider employing these tactics:

Strategies for growing the community

In order to broaden your community, adopt strategies that motivate current members to invite new ones and attract additional participants. This contributes to a broader network effect and increased community diversity. 

Adapting community governance

As your community expands, think about progressively decentralizing decision-making processes to empower members and guarantee the project's long-term viability. Including the community in governance fosters trust and creates a sense of ownership. 

Conclusion

Developing a robust community centered on your tokenized asset is crucial for ensuring its prosperity and enduring stability. By engaging influencers, forging strategic collaborations, and enforcing effective community moderation, you can appeal to and incorporate a lively community. In addition, scaling the community and including its members in decisions guarantees the project's growth and evolution align with their interests.

Be sure to articulate your tokenized asset's vision and mission, offer valuable token utility, and encourage transparent and active communication with the community. By implementing these techniques and adjusting to the changing requirements of your community, you establish a solid basis for your tokenized asset while fostering a thriving ecosystem that benefits all involved parties.

As the fields of blockchain, AI, and cryptocurrency continue to develop, projects driven by communities possess enormous potential to influence the future of tokenized assets. By cultivating a resilient community, your project is well-positioned for growth, innovation, and widespread adoption in this dynamic and revolutionary industry.

Nextrope Tokenization Launchpad Platform

Nextrope Launchpad Platform is a White Label solution in a Software-as-a-Service model that helps you launch your project within a month and fundraise with Initial Coin Offering (ICO) or Security Token Offering (STO).

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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.

source: https://www.canva.com/design/DAFDTNKsIJs/8Ky9EoJJI7p98qKLIu2XNw/view#7

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

Summary

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 contact@nextrope.com. Our team is ready to help you with the token engineering process and ensure your project’s resilience in the long term.

FAQ

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

Karolina

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?

Overview

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.

MUST READ: Docs

EVM-Compatible vs EVM-Equivalent

EVM-Compatible

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.

EVM-Equivalent

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.

CometBFT

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.

Conclusion

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.

Resources

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.

FAQ

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.