How to Improve Poor Tokenomics: A Builder's Guide
Poor tokenomics are a primary reason projects fail. This guide outlines specific, actionable steps to fix common flaws like unfair distribution, infinite inflation, and zero utility. We focus on Solana-based strategies that align creator incentives with long-term holder value.
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The Problem
Traditional solutions are complex, time-consuming, and often require technical expertise.
The Solution
Spawned provides an AI-powered platform that makes building fast, simple, and accessible to everyone.
The Verdict: How to Actually Fix Tokenomics
Stop patching leaks. Rebuild the foundation.
The most effective way to improve poor tokenomics is to shift from a short-term pump model to a long-term ecosystem model. This means moving away from zero-fee, infinite-supply launches and towards structures with clear caps, utility, and aligned incentives. For Solana creators, this involves selecting a launchpad built for sustainability, not just initial volume. Platforms like Spawned enforce better practices from the start by embedding holder rewards (0.30% of every trade) and providing a clear path to mature project tools via Token-2022, which enables features like transfer fees. The fix isn't one action but a framework: capped supply + real utility + sustainable rewards + professional tools.
Where Most Tokenomics Go Wrong
Projects often copy flawed models without understanding the consequences. The most frequent errors are:
- Unfair Initial Distribution: The team or early investors control too much supply (e.g., 40%+), creating massive sell pressure and distrust.
- No Supply Cap: An infinite mint authority or uncapped inflation devalues the token continuously, punishing holders.
- Zero Utility: The token has no function beyond being traded. It doesn't grant governance rights, access to features, or a share of revenue.
- Misaligned Incentives: Launch models that reward the creator with a one-time fee (like a 0% platform) but offer nothing to holders post-launch.
- Opaque Vesting: Lack of clear, on-chain schedules for team and advisor tokens leads to surprise dumps.
These mistakes create a project that is extractive rather than collaborative.
Step-by-Step: How to Improve Your Token's Economics
A practical, five-step process to rebuild token economics from the ground up.
If you're launching a new token or planning a v2, follow these steps to build robust tokenomics.
Step 1: Define Token Utility & Value Flow Before writing code, decide what the token does. Does it vote on governance proposals? Does it grant access to a premium feature in your game or AI tool? Does it receive a share of protocol fees? For example, a gaming token could be used for in-game purchases, staking for rare items, and voting on new game features.
Step 2: Set a Clear, Capped Supply Choose a total supply that makes sense for your utility (e.g., 1,000,000,000 for micro-transactions or 10,000 for exclusive access). Lock the mint authority. This is non-negotiable for building trust.
Step 3: Design a Fair Distribution Schedule Allocate supply thoughtfully: Community/Public Sale (50-70%), Development & Treasury (15-25%), Team (10-15%), Advisors & Partners (5%). Ensure all non-community tokens are subject to transparent, time-locked vesting (e.g., 12-24 months with a cliff).
Step 4: Choose a Launch Model with Aligned Incentives Select a launchpad that rewards both creation and holding. For instance, Spawned's model takes a 0.30% fee per trade, splitting it 50/50 between the creator and a reward pool for loyal token holders. This creates ongoing incentives for everyone.
Step 5: Plan for the Long-Term (Post-Graduation) Have a plan for when your token outgrows the launchpad. Use programs like Solana's Token-2022, which allow you to implement a perpetual, small fee (e.g., 1%) on transfers. This can fund continued development and community initiatives, replacing aggressive inflation.
Launchpad Comparison: Building Good vs. Bad Tokenomics
Your launchpad choice sets the economic rules of your project.
The platform you choose to launch on can dictate your token's economic health. Here’s a direct comparison of outcomes.
| Feature | Typical 'Poor Tokenomics' Launch (e.g., basic pump platforms) | Launching for Sustainability (Spawned Model) |
|---|---|---|
| Creator Revenue | One-time fee, then zero. No ongoing support. | 0.30% of every trade, forever. Continuous funding. |
| Holder Incentives | None. Holders rely solely on price speculation. | 0.30% of every trade redistributed to holders. Rewards loyalty. |
| Supply Control | Often mutable; risk of infinite mint. | Encourages capped supply as a best practice. |
| Post-Launch Path | Dead-end. No upgrade path for serious projects. | Graduation to Token-2022 for 1% perpetual fees and advanced features. |
| Cost to Launch | Sometimes 'free,' but offers no tools or website. | 0.1 SOL (~$20) includes full AI website builder (saves $29-99/month). |
| Result | Extractive, short-term, high risk of abandonment. | Sustainable, aligned, built for long-term development. |
The key difference is alignment. Poor models pit creators against holders. Sustainable models unite them through shared, ongoing rewards.
Beyond Speculation: Examples of Real Token Utility
Give your token a purpose that lasts longer than the first hype cycle.
A token needs a job. Here are concrete examples of utility you can build, especially relevant for gaming and creator projects on Solana.
- Governance & Voting: Token holders vote on treasury spending, feature roadmaps, or in-game balance changes. 1 token = 1 vote.
- Fee Sharing & Revenue: Direct a percentage of protocol or marketplace fees to buy back and burn tokens, or distribute them to stakers.
- Access & Membership: Tokens act as a key. Hold X tokens to access a private Discord, exclusive content, alpha releases, or premium AI tool features.
- In-Game Currency & Crafting: Use tokens to purchase NFTs, craft items, unlock characters, or enter competitive tournaments. This creates constant, utility-driven demand.
- Staking for Rewards: Lock tokens to earn other valuable assets—new NFTs, a share of revenue, or even points in a loyalty program.
Integrating even one of these utilities transforms your token from a speculative asset into a functional component of your ecosystem.
The Sustainable Rewards Model: How 0.30% Changes Behavior
A small, perpetual fee structure fundamentally alters project incentives. Let's break down the math and psychology.
On Spawned, every trade has a 0.30% fee. This fee is split evenly:
- 0.15% to the Creator: This isn't a one-time launch fee. It's a continuous revenue stream that funds development, marketing, and community management. If your token has $1M in daily volume, that's $1,500 daily or ~$45,000 monthly for your project.
- 0.15% to a Holder Reward Pool: This pool is distributed to users who have held the token for a set period. This directly rewards loyalty and discourages rapid flipping. It makes holding the token financially rational, even in sideways markets.
Why This Works: It aligns success. The creator is motivated to build utility and attract volume to increase their revenue. Holders are motivated to support the project and hold to earn rewards. This creates a positive feedback loop, unlike models where the creator's incentive ends at launch.
For a deeper dive on launching with this model, see our guide on how to launch a gaming token on Solana.
Ready to Launch with Better Tokenomics?
Build a project that rewards building, not just launching.
Improving tokenomics starts with choosing the right foundation. Spawned is built for creators who want to build lasting projects, not just launch tokens.
- Launch with Aligned Incentives: Get 0.30% perpetual creator fees and provide 0.30% holder rewards from day one.
- Build Your Hub: Use the integrated AI website builder to create your project's home page instantly—no extra cost.
- Plan for Growth: Graduate seamlessly to Solana's Token-2022 standard to manage 1% transfer fees and other advanced features.
Stop planning for a pump. Start building an economy. Launch your token with a structure designed for long-term success.
Launch Fee: 0.1 SOL (≈$20). Includes your token, liquidity pool, and AI-generated website.
Related Topics
Frequently Asked Questions
Yes, but it's challenging. The most common method is to launch a 'V2' token with improved economics and a migration plan for V1 holders. This requires strong community trust. It's far better to design robust tokenomics from the start using a platform that enforces good practices, like capped supply and aligned fee structures.
There's no single answer, but it should match your token's utility. For a meme or community token with micro-transactions, 1 billion (1,000,000,000) with 6-9 decimals is common. For a more exclusive membership or governance token, 10 million to 100 million can work. The critical point is to set a hard cap and make the mint authority immutable.
On Spawned, 0.15% of every trade fee is allocated to a reward pool for that specific token. This pool is distributed pro-rata to wallets that have held the token for a minimum qualifying period (e.g., 7 days). This mechanism directly rewards loyal holders, creating an ongoing incentive to hold rather than immediately sell.
Token-2022 is an upgraded token program on Solana. It allows for native features that were previously impossible or required complex workarounds, such as permanent transfer fees (e.g., 1%), interest-bearing tokens, and confidential transfers. For tokenomics, the transfer fee is key—it provides a perpetual, decentralized revenue stream for a project's treasury post-launch.
No. This fee is standard and competitive. Major decentralized exchanges (DEXs) often have a 0.30% trading fee. The difference is where the fee goes. On Spawned, it's shared between the project and its holders, funding growth and rewarding the community, rather than going solely to liquidity providers or the platform.
The biggest mistake is allocating too much to the team and early investors without a clear, long-term vesting schedule. A large, unlocked team allocation creates massive sell pressure and destroys holder confidence. Best practice is to keep the team/advisor allocation below 25% total and lock it with a multi-year vesting schedule (e.g., 1-year cliff, then 24-month linear release).
Currently, Spawned is focused on the Solana ecosystem due to its low fees and high speed, which are ideal for community-driven tokens and gaming projects. For chains like Ethereum or Base, the economic models and fee structures would differ significantly. You can explore our thoughts on [Ethereum gaming tokens](/use-cases/token/how-to-create-gaming-token-on-ethereum) for broader context.
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