Who are the dumpers ? The Token-as-a-Product paradigm!

By Tarek Awwad @ Sydyk

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$\mathtt{\large{\textit{Why Should Anyone Buy and Hold Your Token?}}}$

In the blockchain landscape, tokens are often viewed solely through a technical lens. However, to truly thrive, a token must be treated as a product—one that people need, want, buy, use, and hold onto. In this article, I argue for the importance of this product-centric approach, specifically focusing on understanding and managing churn.

While traditional product metrics and tools are well-established, the unique context of blockchain requires innovative methods. We will explore less conventional techniques for analyzing churn to gain deeper insights into user behavior and enhance the value and appeal of tokens.

The Dilemma Shift

In the early days of blockchain, when ICOs were all the rage, founding teams and token issuers often faced a crucial question: Should they build their own blockchain, or simply launch a token on an existing one like Ethereum? This question arose due to the complexity of building a blockchain from scratch at the time—frameworks like Cosmos SDK and Substrate either didn’t exist or weren’t mature enough. Investors were particularly concerned about the feasibility and cost of developing a secure, maintainable chain client and launching a blockchain.

While launching a blockchain was a significant challenge, the speed and ease with which one could raise tens of millions through token sales in those early days made launching a token—rather than an entire blockchain—a no-brainer. This was true even when the token didn’t meaningfully contribute to the project’s value proposition. Loose or nonexistent regulations enabled market manipulation through simple market-making strategies, risky centralized exchange (CEX) tactics, and undisclosed advertising. Combined with an immature market characterized by widespread "degen" behavior, a lack of common sense, and poor risk management, these factors allowed many projects to sustain their token’s value long enough to maintain traction and survive the next bear market.

Today, we are moving toward a more rational and mature crypto market, despite some exceptions (e.g., the Trump family tokens). Institutional players, state reserves, and traditional finance firms are increasingly participating, bringing a level of rationalization by steering the market toward traditional financial and economic guidelines. This shift deprives blockchain startups and teams of the privilege of fast and easy fundraising through token launches. As a result, they now face a new era’s dilemma: should they launch a token at all?

The foundational question shifted from the utility of launching a blockchain to the need for launching a token

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Unfortunately, despite the market’s maturation, the temptation to launch a token often outweighs the arguments against it. The belief in succeeding where many others have failed—because “the token has real utility”, “has organic traction”, or “features novel, unbeatable tokenomics”—leads many Web3 projects, including those already successful, to launch a token anyway…