Building Communities in Crypto: The Future of Token Distribution Models

Last week, we dove into the evolution of token distribution models as well as key learnings and unlocks from the previous cycles. Today, we’ll take a look at the token distribution models of tomorrow. Let’s dive right in.

We believe that the future dominant distribution model is Curated Distributions, where projects launching tokens will confirm users’ real identities and focus on users with proven track records of contributing value to protocols, rather than airdrops to misaligned and malicious actors.

Allocating tokens to individuals who have previously demonstrated value-added activities and on-chain behavior will give projects significantly more engaged and high quality communities when they launch.

At CoinList, we are building out two products that we believe will go a long way in making that vision of Curated Distributions possible:

1. CoinList Karma

Karma is an on-platform points system that rewards CoinList users who add value to protocols – stakers, traders, validators, miners, developers, voters, liquidity providers, and more. Users with sufficient Karma points get access to the Token Sales Priority Queue, which improves their chances of securing a spot in a sale by up to 40x. Priority Queue users are up to 3x more likely to stake their assets and up to 4x more likely to participate in protocol governance. Since launching CoinList Karma, we’ve also seen a 16x growth in the number of lenders on CoinList, demonstrating that those users are more engaged and likely to contribute to the growth of protocol networks.

2. Wallet Link

To complement Karma, a future product called Wallet Link will be an opt-in only mechanism that allows users to connect their on-chain identities to their CoinList verified identities. Users can connect their non-custodial wallets to CoinList and give CoinList permission to look at their past on-chain behavior. Users can delete the wallet addresses associated with their accounts whenever they want. Wallet Link is intended to allow token projects launching on CoinList to better curate whom they want to invite to their Priority Queue based on the users’ on-chain track record. Governance protocols can invite voters who have participated in Snapshot proposals, DeFi protocols can invite degens who have provided liquidity on Uniswap, and GameFi projects can invite gamers who have played Axie and other play to earn games.

By combining Karma and Wallet Link, CoinList will be able to help new protocols curate engaged communities using on-platform and on-chain identities from day one. Partner projects no longer have to worry about having an initial community of speculators and unknown users. Instead, they can distribute their tokens to

• Stakers who will help secure the network
• Developers who will build on top of the protocol
• Voters who will participate in decentralized governance
• Degens who will supply liquidity to the network
• Contributors who will participate in the DAO’s growth initiatives
• Users who will use the protocol

These engaged users can then kickstart the positive feedback loop of community driven protocol growth. With CoinList’s Curated Distributions and compliance-forward approach towards token distributions, projects can confidently allocate more supply to the initial token distribution, as they know those users are committed to the protocol’s long term growth.

Regardless of market conditions, token distribution will remain one of the most dynamic corners of the crypto industry – and we love being at the forefront of it.

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