How to Identify and Fix a Poor Tokenomics Strategy
A flawed tokenomics model can cripple your project before it gains traction. This guide shows you how to spot the warning signs of poor tokenomics, from hyperinflation to misaligned incentives, and provides a clear path to correct them. Rebuilding your token's economic foundation can restore community trust and create a sustainable value cycle.
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The Problem
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The Solution
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What Does 'Poor Tokenomics' Actually Look Like?
Before you can fix a problem, you need to know you have one. Here are the unmistakable signs.
A token with poor economic design often fails shortly after launch. The symptoms are visible in on-chain data and community sentiment. The most common failure points include an uncontrolled or opaque token supply that leads to rapid devaluation. Without a clear use case or 'utility,' the token becomes a speculative asset with no floor. Perhaps the most critical flaw is a structure that only benefits early creators or 'insiders,' leaving long-term holders with no reason to stay. This misalignment scares off serious investors and turns your community into a pump-and-dump group.
For example, a token with a 10% daily emission rate to 'reward' holders actually dilutes everyone's share so quickly that the price collapses. Another classic error is launching with 90% of tokens held by the team with no vesting schedule, signaling an imminent rug pull. These models are not sustainable. A better approach, as seen with platforms like Spawned, embeds fairness into the code: creators earn 0.30% from every trade, and holders earn a matching 0.30% directly, creating a shared incentive for the token's health.
Common Poor Tokenomics vs. A Sustainable Model
The difference between a failed token and a thriving one is often in a few key design choices.
Let's compare the attributes of a failing token against the framework provided by a structured launchpad.
| Problem Area | Typical Poor Tokenomics | Spawned's Recommended Framework |
|---|---|---|
| Creator Revenue | One-time launch profit; often a 'rug pull' scenario. | 0.30% fee on every trade, creating continuous, aligned revenue. |
| Holder Incentives | None, or unsustainable high-yield staking that inflates supply. | 0.30% reward on every trade distributed to holders, no inflation needed. |
| Post-Launch Funding | Relies on draining liquidity or issuing new tokens. | 1% perpetual fee after graduation to Token-2022, funding ongoing development. |
| Token Utility | Vague promises or 'governance' with no real power. | Built-in AI website builder provides immediate utility and saves $29-99/month for creators. |
| Cost Structure | High initial mint cost or hidden fees. | Transparent 0.1 SOL (~$20) launch fee, with clear value provided. |
This comparison shows that poor tokenomics is often about short-term extraction, while a sustainable model builds mechanisms for long-term, shared growth. The 0.30%/0.30% split is a core differentiator—it means the creator's success is directly tied to trading volume, which is boosted by holder rewards.
A 4-Step Process to Repair Your Tokenomics
If your token is showing signs of poor economic health, a strategic rebuild is possible. Follow these steps to correct course.
Step 1: Conduct a Transparent Audit Halt any new token emissions. Use a block explorer to publicly document the total supply, distribution, and wallet holdings. Acknowledge the current flaws to your community. Honesty here is the first step to regaining trust.
Step 2: Recalibrate Supply and Distribution For an excessively inflationary token, propose a vote to reduce or halt emissions. For a token overly concentrated in team wallets, propose a vesting schedule that locks funds for 12-24 months. Consider a token burn of unallocated supply to reduce sell pressure.
Step 3: Introduce Real Utility and Shared Value This is the most critical step. Integrate a feature that provides real use. For instance, using a platform with a built-in AI website builder turns your token into an access key for tools. Then, implement a fair revenue model. Adopting a standard where 0.30% of trades go to the creator treasury and 0.30% are redistributed to holders creates a virtuous cycle.
Step 4: Plan for the Long Term with Token-2022 Plan your migration to Solana's Token-2022 program. This allows you to encode a sustainable 1% transfer fee that funds ongoing development in perpetuity, moving beyond one-time launch fees. This provides a clear roadmap from launch to maturity.
The Power of Aligned Incentives: Creator & Holder Rewards
Sustainable tokenomics aligns everyone's success. Here's how shared rewards build a stronger project.
The 0.30% creator fee and 0.30% holder reward model isn't just a feature; it's a fundamental correction to poor tokenomics. Most failed tokens have a 'winner-takes-all' dynamic. Creators cash out early, holders are left with worthless bags, and the project dies.
This model changes the game. The creator's 0.30% fee provides a continuous revenue stream tied directly to the token's trading health. This incentivizes the creator to build utility, market the project, and foster a healthy community—because their income depends on it. Simultaneously, the 0.30% holder reward gives people a real reason to buy and hold beyond speculation. They earn a share of the activity they help create. This dual-reward structure turns traders and holders into active participants in the token's ecosystem.
Contrast this with a platform that offers '0% fees' like pump.fun. While attractive upfront, it provides zero built-in mechanism for the creator to earn after launch, often pushing them towards extractive behaviors. The small, sustainable fees on Spawned create a long-term business model for your token.
Final Recommendation: Rebuild on a Sustainable Foundation
The most efficient way to fix poor tokenomics is to relaunch with a structure that prevents them.
If your tokenomics are failing, a piecemeal fix is rarely enough. The most effective path is to use a launchpad designed to prevent these issues from the start. For creators looking to optimize a) fix an existing poor tokenomics strategy or b) launch a new token correctly, using Spawned is the clear choice.
Why? It bakes the solutions into the launch process:
- It forces good design: The 0.30%/0.30% model isn't optional; it's how the platform works, ensuring aligned incentives from day one.
- It provides immediate utility: The included AI website builder gives your token a concrete use case, moving beyond vague promises.
- It plans for maturity: The path to a Token-2022 program with 1% fees solves the 'how do we fund development later?' problem that kills many projects.
Attempting to manually rebuild tokenomics on a bare-bones launchpad leaves room for error and often fails to solve the core incentive problem. Using a platform with these guardrails and value-adds gives your project the highest chance of long-term survival and growth.
Ready to Fix Your Token's Economics?
A better-designed token starts with a better launchpad.
Don't let poor tokenomics define your project's future. You can start fresh with an economic model designed for sustainability and shared success.
Launch your token on Spawned today and build with the advantages of aligned creator/holder rewards, built-in utility, and a clear path for long-term funding. The process is straightforward, and for a 0.1 SOL launch fee, you gain access to the AI website builder and a robust economic framework.
Explore the token creation process to see how easy it is to get started, or learn more about our platform's features to understand the full value proposition. Turn your token's economics from a liability into its greatest strength.
Related Topics
Frequently Asked Questions
It depends on the severity. For minor issues like slightly high inflation, you can propose governance changes to adjust parameters. For fundamental flaws like no utility, extreme concentration, or broken trust, launching a new token via a migration or fresh start on a platform like Spawned is often more successful. A fresh start with transparent, sustainable mechanics (like the built-in 0.30%/0.30% rewards) can rebuild community faith more effectively than trying to patch a broken system.
A 0% fee model offers no ongoing revenue for creators, which incentivizes them to profit solely from the initial launch, often leading to abandonment or a 'rug pull.' The 0.30% perpetual fee creates a continuous, aligned income stream. It motivates the creator to keep building utility and marketing the token to drive trading volume, as their success is directly tied to the token's long-term health. This aligns creator and holder interests for sustainable growth.
The reward is not minted new tokens, which would cause inflation and dilute value. Instead, it is taken from the 0.60% total fee applied to trades (0.30% to creator, 0.30% to holders). This 0.30% is automatically distributed proportionally to existing holders. It's a redistribution of existing value from traders to holders, creating a yield-like incentive without increasing the total token supply.
Token-2022 is an upgraded token program on Solana that enables advanced features like transfer fees. After your token 'graduates' from the initial launch phase on Spawned, you can upgrade it to Token-2022. This allows you to encode a 1% fee on every token transfer. This fee goes directly to a designated project treasury, providing a permanent, automated funding mechanism for development, marketing, and operations, solving the problem of how to finance a project long-term.
Yes, absolutely. Utility is a cornerstone of good tokenomics. A token with no use case is purely speculative. The integrated AI website builder provides immediate, tangible utility: it allows token holders or the community to create and manage a project website. This saves $29-99 per month on external services and embeds real functionality into the token's ecosystem. It transforms the token from a speculative asset into an access key for valuable tools, strengthening its fundamental value proposition.
Spawned is currently a Solana-native launchpad. If your project is committed to the Solana ecosystem, Spawned is an excellent choice to relaunch or launch a new token with superior economics. For projects staying on Ethereum or Base, the principles in this guide still apply—seek out platforms or implement custom smart contracts that enable shared revenue models, real utility, and sustainable fee structures. You can review our guides for [Ethereum](/use-cases/token/how-to-create-gaming-token-on-ethereum) and [Base](/use-cases/token/how-to-create-gaming-token-on-base) for chain-specific context.
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