How to Identify and Improve Poor Tokenomics Techniques
Poor tokenomics are a primary reason projects fail, often due to unfair distribution, unsustainable rewards, or misaligned incentives. This guide outlines common flawed techniques and provides a structured approach to redesigning your token's economic model for long-term viability. A well-designed system prioritizes creator sustainability, fair holder rewards, and clear utility.
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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 on Fixing Tokenomics
Can flawed tokenomics be fixed? Absolutely, but it requires a fundamental rebuild.
Ignoring poor tokenomics techniques guarantees project failure. The solution isn't just tweaking numbers; it's adopting a foundational framework that aligns creator revenue, holder rewards, and long-term development from day one. Platforms that enforce better standards, like Spawned with its dual 0.30% fee structure and integrated Token-2022 program for post-graduation fees, provide the necessary guardrails. For creators serious about building a lasting community, rebuilding on a foundation of sustainable economics is non-negotiable.
5 Common Poor Tokenomics Techniques (And Why They Fail)
These techniques create short-term pumps but lead to long-term collapse by destroying trust and draining value.
- Zero-Fee or 'Fair Launch' Models: Models like pump.fun charge 0% fees, which starves the creator treasury. This forces creators to hold a large portion of the supply, creating massive sell pressure later. Sustainable projects need ongoing revenue for development and marketing.
- Uncapped or Hyper-Inflationary Supply: Minting unlimited tokens or releasing large, unpredictable amounts dilutes holder value to zero. It signals a lack of long-term planning and scares away serious investors.
- Reflection Rewards with No Utility: Paying out 5-8% in reflections sounds good but becomes a ponzi if the token has no real use. It drains liquidity and rewards early dumpers at the expense of loyal holders.
- Excessive Initial Dumps (Team/VC Allocation): Allocating 40% or more to the team and investors with short unlock schedules floods the market, crushing price and community morale immediately after launch.
- No Post-Launch Revenue Plan: Launching without a plan for how the project will fund itself after the initial liquidity is spent leads to abandonment. The 1% perpetual fee enabled by Solana's Token-2022 program on Spawned is a built-in solution.
Poor vs. Sustainable Tokenomics: A Direct Comparison
| Technique | Poor Implementation | Sustainable Improvement (Using Spawned) |
|---|---|---|
| Creator Revenue | 0% fee (pump.fun model). Creator must sell tokens to fund work. | 0.30% fee on every trade. Provides steady, sustainable funding without forced selling. |
| Holder Incentives | None, or high reflections that drain liquidity. | 0.30% fee distributed to loyal holders. Rewards are sustainable and tied to volume. |
| Supply Control | Uncapped, or large, sudden unlocks. | Capped supply with transparent, gradual vesting schedules managed on-chain. |
| Post-Launch Future | No plan; project often abandoned. | Automatic graduation to Token-2022 for 1% perpetual fees, funding ongoing development. |
| Cost Structure | 'Free' launch but hidden costs like website hosting ($29-99/month). | 0.1 SOL (~$20) launch fee includes an AI website builder, eliminating recurring costs. |
Step-by-Step: How to Improve Your Token's Economics
Follow this process to audit and rebuild your token's economic model.
How Spawned's Design Prevents Poor Tokenomics
The best way to fix poor tokenomics is to use a system that makes them impossible from the start.
Spawned is architected to make sustainable tokenomics the default, not an afterthought. The platform's core fee structure—0.30% to the creator and 0.30% to holders on every trade—solves the two biggest flaws: creator starvation and holder apathy. This isn't an optional feature; it's the foundation.
Furthermore, by planning for graduation to Solana's Token-2022 program, Spawned projects automatically have a path to a 1% perpetual fee standard, securing long-term development funds. The included AI website builder also removes the need for creators to sell tokens to pay for basic infrastructure, reducing early sell pressure. This integrated approach turns complex economic design into a streamlined launch process.
Ready to Launch with Sustainable Tokenomics?
Don't let poor tokenomics techniques doom your project before it starts. Spawned provides the framework for balanced, sustainable economic design from the moment you create your token.
- Launch with built-in sustainable fees: 0.30% creator revenue + 0.30% holder rewards.
- Secure your project's future: Automatic path to 1% fees via Token-2022.
- Save on hidden costs: AI website builder included (save $29-99/month).
Launch Your Token on Spawned today for just 0.1 SOL and build on an economic foundation made to last.
Related Topics
Frequently Asked Questions
The biggest red flag is a model that cannot fund the creator or project development sustainably. This includes zero-fee launches or models where the only way for creators to earn is by selling their own token allocation, which creates massive, predictable sell pressure and destroys holder confidence.
It is extremely difficult and often requires a full migration or relaunch, which can erode trust. Changing core parameters like fees or supply after launch can be seen as a breach of the original social contract. It's far better to launch with the right structure from the beginning using a platform with built-in best practices.
0% fees (like on pump.fun) starve the project. High fees (8-10%) discourage trading and are often associated with ponzi schemes. A 0.30% fee is a sustainable middle ground—low enough to not impede trading volume but consistent enough to generate meaningful revenue for creators and rewards for holders over time.
Spawned's 0.30% holder reward is tied directly to trading volume, not token inflation. This means rewards are funded by a small slice of market activity, not by printing new tokens that dilute everyone. It incentivizes holding without draining the project's treasury or liquidity, which is a common flaw in reflection-based systems.
Token-2022 is an upgraded token program on Solana that allows for built-in, transfer fees. Spawned uses this so projects can 'graduate' to have a perpetual 1% fee on all transfers. This provides a permanent, decentralized revenue stream for mature projects, solving the 'no post-launch plan' flaw common in poor tokenomics.
Absolutely. Gaming tokens need sustainable economics more than most. You need funds to pay developers, run servers, and create new content. A model with small, continuous fees is far more stable than relying on token sales. For specific guidance, see our guide on [how to create a gaming token on Solana](/use-cases/token/how-to-create-gaming-token-on-solana).
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