Token distribution tactics should focus on real value, not hype, says Uniswap founder

Hayden Adams advocates for a principled approach to token distribution that prioritizes the long-term success and integrity of the project over short-term gains.

While initial interest in blockchain projects might be sparked by marketing strategies like airdrops, what truly matters is what keeps users engaged with the project in the long run. Uniswap founder Hayden Adams shared his opinion on good token distribution, suggesting that token marketing should focus on providing real value, rather than merely building hype.

“Don’t market token price – if you tweet about how your token is going to moon or hire influencers, or marketing firms to do so I assume you’re just trying to get rich quick vs build real value,” Adam noted in a recent discussion on the ethics of token distribution.

Adam also outlined several principles he believes should guide token distributions, including the avoidance of ambiguous teasers and the necessity for real liquidity from day one.

“Don’t farm the farmers – teasing and creating ambiguity around a token distribution to grow your numbers is bad behavior. If you don’t know yet, don’t speculate publicly. If you do know but are not ready to share full details, don’t tease them out. Just share real details when ready,” Adam stated.

He additionally criticized the creation of low-float tokens, which he considers “malicious,” and the manipulation of token supply to exploit unit bias.

“You don’t need to work with exchanges or market makers. It’s so easy. Just distribute enough tokens publicly that real price discovery happens on DEX. People should start thinking in FDV not [market cap] when valuing these things,” Adam noted.

 “Don’t create absurdly high token supply to farm people with unit bias, this is also bad behavior,” he added.

Adam further advised against stinginess in token distribution. According to him, giving away a significant portion of tokens to the community shows a commitment to the community’s growth and trust.

 “If you don’t think the community deserves a significant amount, don’t release a token,” he stated.

The Uniswap founder stressed the importance of making deliberate and well-considered decisions regarding token distribution. According to him, projects should be able to stand behind their choices with confidence and clear reasoning, without having to constantly defend themselves or apologize for their actions.

“Put real thought and care into your decisions – so you can stand behind them and explain your rationale. Don’t end up in a situation where you’re fighting or apologizing to crypto twitter. Create something you’re proud of and stand behind it,” he stated.

Adam’s comments follow recent debates surrounding token airdrops and distributions of several prominent projects, which attracted mixed opinions from the communities after announcing their tokenomics.

A highly-anticipated token airdrop from LayerZero also received criticism and praise for its approach to Sybil behavior.

LayerZero benefited massively from airdrop farmers for years, but now when it comes time to drop the token… farming is suddenly now a problem?

Airdrop farmers definitively provide value to protocols

They help (1) stress test infra so issues can be resolved sooner rather than…

— Zach Rynes | CLG (@ChainLinkGod) May 3, 2024

Clever way to force the prisoner’s dilemma on sybilers.

Sybilers can’t predict the effectiveness of LZ’s filtering efforts, so there’s some uncertainty.

Instead of allowing them to be helpless, LZ is using that uncertainty to *fuel* their filtering efforts.

LZ is betting that… https://t.co/BhdHHMgcek

— kenton.eth (@KentonPrescott) May 3, 2024