How to Improve Poor Tokenomics: A Creator's Action Plan
Poor tokenomics can sink a project before it starts. This guide provides concrete steps to diagnose and repair flawed token design, focusing on supply, utility, and distribution. We'll show how platforms like Spawned provide tools to build better token models from the start.
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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.
What Does 'Poor Tokenomics' Actually Mean?
It's more than just a sinking chart.
Poor tokenomics refers to a token's economic design that fails to create or sustain value for holders. It's not just about a low price; it's about structural flaws that lead to rapid decline. Common signs include:
- Hyperinflationary Supply: An unlimited or excessively large token supply that constantly dilutes holder value.
- Zero Utility: A token that serves no purpose within its ecosystem—no governance, no access, no fees.
- Concentrated Ownership: A large percentage (e.g., 40%+) held by founders or early investors with no lock-up, creating massive sell pressure.
- No Revenue Sharing: The project generates fees but offers no mechanism to distribute them back to token holders.
Projects launched without planning often face these issues. A platform like Spawned addresses some of these by default, integrating a 0.30% ongoing holder reward from every trade, creating immediate, built-in utility.
The Verdict: Most Poor Tokenomics Are Fixable
You can repair poor tokenomics, but it requires honest assessment and decisive action. The best approach is a combination of transparent communication with your community and implementing technical corrections. While a total reboot is sometimes needed, many projects can be stabilized by adjusting key parameters. The worst action is inaction. Using a launchpad with sustainable features built-in, like Spawned, prevents these issues from arising in the first place.
7 Actionable Steps to Improve Your Tokenomics
Follow this sequence to diagnose and address the core issues.
Building Right: Spawned vs. A Generic Launch
Prevention is better than repair.
How starting with the right tools prevents poor tokenomics.
| Feature | Generic Solana Launch (e.g., manual SPL token) | Launching with Spawned |
|---|---|---|
| Initial Holder Incentive | None by default. You must code it later. | 0.30% of every trade is automatically distributed to holders from day one. |
| Creator Revenue | Must be manually coded, often added later as a tax. | 0.30% fee per trade for creators, sustainable from launch. |
| Post-Launch Upgrade Path | Complex, requires custom development and migration. | Smooth graduation to Token-2022 with 1% perpetual fees managed by the platform. |
| Project Foundation | Just a token contract. Website/community tools cost extra. | AI website builder included, saving $29-99/month on essential tools. |
| Cost | Variable gas + dev costs for features. | Fixed 0.1 SOL launch fee (~$20) for full suite. |
The key difference is built-in sustainability. Spawned integrates holder rewards and creator fees into the core model, aligning incentives from the start and avoiding the 'zero-utility token' pitfall.
Case Study: Fixing a Gaming Token's Economics
Imagine a gaming token launched on Solana with 1 billion supply, no utility, and 30% held by the devs unlocked. The price spiked and crashed. Here's a realistic recovery plan:
- Transparency Post: The team announces a "Tokenomics V2" plan, locking their 30% for 2 years with a 6-month cliff.
- Utility Creation: They announce that the token will be the exclusive currency for purchasing NFT character skins in their upcoming game demo, creating tangible demand.
- Supply Shock: They use 50% of the initial launch funds (held in SOL) to buy back and burn 200 million tokens (20% of supply).
- Reward Loyalty: They set up a staking pool where stakers earn a share of the 5% marketplace fee from future skin sales.
- Platform Advantage: Had they used Spawned, the 0.30% holder reward would have been running from day one, retaining holders during the dip.
This multi-step approach attacks supply, utility, and distribution simultaneously. Learn more about creating a gaming token on Solana.
Essential Tools to Analyze & Improve Tokenomics
You can't fix what you can't measure. Use these tools:
- Birdeye or DexScreener: Track holder distribution, concentration, and liquidity pool health in real-time.
- Solscan: The explorer to verify token contracts, mint authority status, and transaction history.
- Spawned Dashboard: For projects launched on Spawned, monitor the accumulated holder rewards and creator fees directly.
- Token-2022 Documentation: Study the new features like transfer hooks and permanent fees to plan your upgrade.
- Community Polls (Discord/Twitter): Gauge holder sentiment directly. What changes would they support?
Build Sustainable Tokenomics from the Start
Repairing tokenomics is hard work. The smarter strategy is to build them correctly from your first line of code. Spawned is designed for creators who want a fair, sustainable model that rewards both them and their community long-term.
Why launch your next project with Spawned?
- Automatic Holder Rewards: 0.30% of every trade goes to your community, building loyalty.
- Fair Creator Revenue: 0.30% fee supports your ongoing development.
- Clear Upgrade Path: Graduate to a sustainable 1% fee model with Token-2022.
- All-in-One Launch: Includes an AI-powered website builder, saving you time and money.
Stop planning for a fix. Start building for success. Launch your token on Spawned today for just 0.1 SOL.
Related Topics
Frequently Asked Questions
On Solana, you cannot modify an existing SPL token's core properties like total supply. However, you can create a new, improved token and execute a migration or swap for holders. This is complex and requires near-universal community support. A better approach is to add new features (staking, utility) and use mechanisms like buybacks to alter the effective supply and value of the existing token.
Transparent communication with your community is the most critical first step. Without trust, no technical fix will work. Clearly explain what went wrong, take accountability, and present a detailed, actionable plan for improvement. Building this trust is foundational before implementing token burns, new utility, or staking programs.
Spawned integrates a 0.30% fee from every trade that is automatically distributed to all token holders. This creates immediate, passive utility for holding the token, aligning long-term incentives between creators and the community from day one. It prevents the 'no utility' trap and encourages holding over quick flipping, which stabilizes price action.
Not inherently, but it is a major risk factor. A large supply (e.g., in the billions) often leads to very low unit prices, which can attract speculative 'penny stock' mentality. The real issue is when a large supply is paired with no mechanisms to create scarcity (burns, staking) or massive, unlocked allocations. It's about the balance of supply, demand, and distribution.
A token burn reduces total supply, which can increase the relative value of remaining tokens. The main risks are: 1) It can be seen as a one-time gimmick if not paired with lasting utility. 2) If the burn is too small, it has no noticeable effect. 3) It uses project treasury funds that could be spent on development. It should be part of a broader plan, not the only action.
Solana's Token-2022 program introduces native features like transfer fees and permanent delegate authority. This allows projects to encode a small, perpetual fee on all transfers (e.g., 1%), which can be directed to a treasury, burn mechanism, or reward pool automatically. Spawned uses this for its graduation model, creating a sustainable fee structure without relying on custom, unaudited tax code.
Low liquidity and poor tokenomics are deeply linked. Extreme volatility from low liquidity exacerbates sell pressure from bad tokenomics. Focus on securing deeper liquidity (via LP incentives or partnerships) in parallel with your tokenomics reforms. A tokenomics fix will have limited impact if holders cannot trade efficiently. Consider locking LP tokens to build confidence.
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