Token Graduation Explained: The Complete Creator's Guide
Token graduation is the process where a token transitions from its initial launch platform, like a Solana launchpad, to a decentralized exchange (DEX). This move involves locking liquidity, burning a bonding curve, and establishing a permanent trading market. For creators, it's a critical step toward long-term project viability and community trust.
Key Points
- 1Graduation moves a token from a launchpad's bonding curve to a DEX liquidity pool.
- 2It requires locking liquidity (e.g., 50-100 SOL) and burning the launchpad bonding curve.
- 3Successful graduation establishes permanent, permissionless trading for your token.
- 4Post-graduation, projects like Spawned offer a 1% creator fee via Token-2022.
- 5It's a signal of project commitment and a step toward broader accessibility.
What is Token Graduation?
The essential upgrade from launchpad experiment to open-market asset.
In simple terms, token graduation is a token's 'graduation day' from its initial launch environment. Think of a launchpad as a starter school with training wheels—it provides an easy initial launch via a bonding curve. Graduation is when those training wheels come off: the bonding curve is burned, and the token's liquidity is moved to a decentralized exchange (DEX) like Raydium or Orca, creating a standard market pair (e.g., YOURTOKEN/SOL).
This process transforms your token from a launchpad experiment into a tradable asset on the open market. It's a required step for tokens that start on platforms like pump.fun or Spawned.com to achieve longevity. The core mechanism involves contributors pooling SOL to form a liquidity pool (LP) on a DEX. Once a predefined threshold (like 50-100 SOL) is met, the launchpad's bonding curve is destroyed, and the new DEX pool becomes the sole market.
The Token Graduation Process: Step-by-Step
Here is the standard sequence for a Solana token to graduate from a launchpad like Spawned.com or pump.fun.
Why Graduation Matters for Your Token
Beyond the technical move, graduation builds trust and opens doors.
Graduation isn't just a technical step; it's a major milestone with tangible benefits for your project's health and credibility.
- Permanent Market: DEX liquidity pools are persistent. Unlike a bonding curve that can be rugged if the creator withdraws, a graduated pool exists as long as liquidity providers keep funds in.
- Community Trust: Successfully funding a liquidity pool demonstrates active community support. Locking liquidity shows a commitment to the token's future.
- Broader Accessibility: DEX listings make your token visible to a much wider audience of traders, bots, and portfolio trackers that don't monitor launchpad bonding curves.
- Fee Generation: Post-graduation, you can earn ongoing revenue. For example, Spawned.com uses the Token-2022 program to allow a 1% fee on every trade, forever. See how creator fees work.
- Path to CEX Listings: Many centralized exchanges (CEXs) require a token to have established, deep liquidity on a DEX before they will consider listing it. Graduation is the first step on that path.
After Graduation: Spawned.com vs. Typical Launchpads
Where your project lands matters more than where it starts.
The launchpad you choose defines your project's future after graduation. Here’s a critical comparison of the ongoing model.
| Feature | Typical Launchpad (e.g., pump.fun) | Spawned.com |
|---|---|---|
| Creator Revenue Post-Grad | 0% | 1% fee on all trades (via Token-2022) |
| Holder Rewards | None | 0.30% of every trade distributed to holders |
| Pre-Graduation Fees | 0% trading fee | 0.30% trading fee (Creator + Holder Rewards) |
| Website/AI Tools | Separate cost ($29-99/month) | AI Website Builder included at launch |
| Launch Cost | ~0.1 SOL | ~0.1 SOL |
The key difference is sustainability. While others offer a free launch, they provide no ongoing way for creators to earn from their project's success. Spawned.com is built for the long term, giving creators a 1% perpetual revenue stream and rewarding holders, which encourages holding and reduces sell pressure. Our full guide covers this in detail.
Key Considerations Before You Graduate
As a creator, don't just rush to graduate. Plan for it.
- Liquidity Target: Choose a realistic target (e.g., 50 SOL). A target that's too high may never be met, stalling your project.
- Initial Liquidity (IL): Be aware that providing liquidity exposes you to Impermanent Loss if the token price changes significantly compared to SOL.
- Community Communication: Clearly explain the graduation process, the target, and the benefits to your community. Their buy-in is essential to fund the LP.
- Post-Graduation Plan: Have a plan for what happens next. How will you use the 1% creator fee from Spawned.com? How will you engage holders receiving the 0.30% reward?
- Token-2022 Program: If using Spawned.com, understand that the 1% fee is enabled via Solana's Token-2022 standard, which is supported by most major wallets and DEXs.
Verdict: Is Token Graduation Right for Your Project?
The definitive step from temporary experiment to lasting asset.
Yes, graduation is a non-negotiable step for any serious Solana token project.
The bonding curve model on launchpads is perfect for bootstrapping and proving initial concept viability. However, it is not a sustainable permanent home for a token. Graduation unlocks real markets, builds irreversible community trust through locked liquidity, and opens the door to perpetual creator earnings.
Our recommendation: Plan for graduation from day one. Choose a launchpad that supports your long-term vision, not just a cheap launch. The inclusion of a perpetual 1% fee and holder rewards, as with Spawned.com, turns your token from a meme into a potential sustainable revenue engine. The included AI website builder also saves you ongoing costs, letting you reinvest in your community. If your goal is a lasting project, graduation is the essential bridge you must cross.
Ready to Launch a Token Built to Graduate?
Understanding graduation is the first step. The next is launching on a platform designed for your success beyond the bonding curve.
Launch on Spawned.com and get:
- A clear path to graduation with a sustainable post-graduation model.
- A 1% perpetual creator fee on all trades after graduation.
- 0.30% holder rewards from the very first trade, building a loyal community.
- An AI-powered website builder included, saving you monthly subscription fees.
Start building a token with a future. Launch your token on Spawned.com now.
For a simpler breakdown, read our guide Token Graduation Explained Simply.
Related Terms
Frequently Asked Questions
If a token never reaches its liquidity pool target to graduate, it remains trapped on the launchpad's bonding curve. Trading is limited to that environment, liquidity is typically shallow, and the token lacks credibility. It cannot be listed on DEXs or CEXs, severely limiting its growth potential and often leading to the project fading away.
Yes, technically you can fund the entire liquidity pool yourself. However, having community participation is a strong trust signal. It proves others believe in the project enough to lock their own SOL. A community-funded pool often leads to a healthier, more decentralized launch and greater initial engagement.
A presale sells tokens at a fixed price before launch. Graduation liquidity is collected *after* the token is live and trading on the launchpad. Graduation funds are not used to buy tokens; they are pooled with an equal value of the existing tokens to create a DEX market. The token price at graduation is determined by the final bonding curve price, not a preset amount.
Spawned.com uses Solana's Token-2022 program, which allows for custom token logic. When your token graduates, this feature is activated. A 1% fee is automatically taken from every buy and sell transaction on the DEX. This SOL is sent directly to a wallet you control, providing a continuous revenue stream as long as your token trades. [Explore the benefits of this model](/glossary/token-graduation/token-graduation-benefits).
No, liquidity on a DEX is not locked by the graduation process itself. The SOL and tokens provided become part of a standard liquidity pool. Liquidity Providers (LPs) receive LP tokens and can withdraw their funds at any time, which would remove liquidity. To prevent a rug pull, creators often lock their LP tokens for a period using a smart contract service to build trust.
The 1% fee generates income in the form of SOL. This is likely considered taxable income in your jurisdiction. You are responsible for tracking this revenue and reporting it according to your local tax laws. It is strongly advised to consult with a crypto-savvy tax professional.
The standard integration for most Solana launchpads is with Raydium. The graduation process is automated and specific to that DEX. To create a pool on another DEX like Orca or Meteora, you would typically need to do so manually after the initial graduation, using a portion of the liquidity from your primary Raydium pool.
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