Use Case

How to Optimize Poor Tokenomics: A Step-by-Step Guide

Poor tokenomics can sink a project before it starts. This guide provides specific, actionable steps to diagnose and fix common tokenomics flaws like excessive supply, poor distribution, and weak utility. We cover concrete solutions to build sustainable token value and align with community expectations.

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Key Benefits

Poor tokenomics often stems from unrealistic supply, misaligned distribution, and missing utility.

A phased approach is key: audit your structure, prioritize fixes, communicate changes, and rebuild trust.

Platforms like Spawned offer built-in tools for fair launches and ongoing holder rewards to support a healthy token economy.

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.

How to Diagnose Poor Tokenomics

Before you can fix tokenomics, you need to identify the specific problems. Here are the most common culprits.

Most tokenomics issues fall into a few key categories. Pinpointing yours is the first step toward a solution.

Excessive or Unrealistic Supply: A total supply in the trillions with no burn mechanism signals low per-token value. Ask: Is the supply justified by the project's scale?
Concentrated Ownership & Poor Distribution: If over 40% of tokens are held by the team or early investors without a clear vesting schedule, it creates sell pressure and distrust.
Weak or Nonexistent Utility: The token only functions for governance on a dormant DAO or has no connection to your platform's core use. Utility drives demand.
Misaligned Incentives & High Taxes: Transaction taxes above 5-8% can discourage trading. Fees should fund specific initiatives like rewards or liquidity, not just the treasury.
Lack of a Clear Value Accrual Model: There's no defined path for the token to capture value from the project's growth or revenue.

Step-by-Step Plan to Optimize Your Tokenomics

A reactive, haphazard fix can do more harm than good. Follow this ordered process.

Fixing tokenomics requires a structured approach to avoid further community backlash.

Conduct a Transparent Audit: Publicly acknowledge the issues. Use a simple blog post or community post to list the identified problems (e.g., 'Our 10% transaction tax is too high, and 50% of supply is unlocked at launch').
Prioritize and Propose Changes: Don't try to fix everything at once. Start with the most damaging issue. Example: Propose reducing the transaction tax from 10% to 3%, with 2% going to holder rewards and 1% to liquidity.
Engage the Community for Feedback: Use a Snapshot vote or structured forum discussion to get holder input on the proposed changes. This builds buy-in.
Implement Changes with Clear Communication: Once agreed, execute the changes via a contract upgrade or new deployment. Document every step and explain the why behind each change.
Introduce New Value Mechanisms: Address utility gaps. For a gaming token, this could mean creating a gaming token on Solana that's used for in-game purchases, staking for NFTs, or tournament entry fees.

How Spawned's Model Prevents Poor Tokenomics

The right launch environment sets the stage for sustainable tokenomics.

Building a token with poor structure is often easier than building one with a strong foundation. Spawned is designed to encourage better practices from the start.

Feature	Typical Poor Tokenomics	Spawned's Approach
Creator Revenue	Often 0%, leading to quick cash-out via pumps.	Sustainable 0.30% fee on every trade, aligning long-term success.
Holder Incentives	Rarely exists, no reason to hold.	0.30% of every trade is distributed to all token holders automatically.
Post-Launch Fees	Unclear or excessive (5-10% tax).	Transparent 1% fee after graduation, using Solana's Token-2022 program for compliance.
Launch Cost	Can be high, forcing creators to recoup costs.	Fixed 0.1 SOL (~$20) launch fee reduces pressure for an immediate pump-and-dump.

This structure incentivizes creators to focus on building a lasting community and project, not just a quick flip. The ongoing 0.30% holder reward directly addresses the 'weak utility' problem by giving everyone a stake in trading activity.

Building Real Utility: From Theory to Practice

"Governance" is not enough. Utility must be actionable and desirable.

Let's move beyond 'governance token' as the only utility. Here are concrete examples based on project type:

Gaming Project: Your token is used to mint character NFTs, purchase power-ups, enter competitive leagues, and stake to earn rare loot boxes. The token becomes the lifeblood of the in-game economy. For a deeper dive, see our guide on how to launch a gaming token on Solana.
Content Creator / Community Token: Holders get access to exclusive Discord channels, early video releases, monthly AMAs, and voting power on content topics. A percentage of your platform revenue (e.g., from YouTube or subscriptions) could be used to buy back and burn the token.
Tooling or SaaS Project: The token acts as a credit for API calls, premium feature access, or a discount mechanism for high-volume users. This directly ties project usage to token demand.

The key is to make the utility integral, not an afterthought. It should be something users actively need or strongly desire.

Verdict: Optimization is a Process, Not a One-Time Fix

Can you recover from poor tokenomics? Yes, but it requires a strategic and transparent approach.

Optimizing poor tokenomics is difficult but necessary for survival. The most effective path involves honest auditing, community-involved changes, and integrating real, demand-driven utility.

For creators launching a new token, starting with a structure that promotes health is crucial. A platform like Spawned, with its built-in holder rewards and sustainable fee model, provides a foundation that discourages the short-term thinking that leads to poor tokenomics. It aligns the success of the creator with the success of every holder.

If you're recovering from a poor start, focus on one major fix at a time, communicate relentlessly, and use tools that support long-term growth over short-term gains.

Ready to Build Better Tokenomics?

Turn these tips into action.

Whether you're looking to fix an existing token or launch a new one with a strong foundation from day one, the right tools make a difference.

Spawned provides the framework for sustainable token economics with automatic holder rewards and a clear value accrual model. Build your token and your project's website with our AI builder, all in one place.

Start building a token designed to last.

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Frequently Asked Questions

Yes, but it's challenging and requires extreme transparency. The process involves proposing clear changes (like reducing supply via a burn or adjusting tax rates), getting community approval through a vote, and then executing a contract migration or upgrade. The key is to communicate the 'why' behind every change to rebuild trust.

Creating a token with no fundamental utility or reason to hold beyond speculation. Many projects launch a token simply because it's expected, without integrating it into the core product. This leads to immediate sell pressure after launch hype fades. Utility should be planned before the first token is ever minted.

They directly address the 'why hold?' problem. Instead of hoping for price appreciation, holders earn a share of trading activity just for keeping tokens in their wallet. This encourages holding, reduces volatile sell pressure, and creates a baseline level of demand, which stabilizes the token's economy and aligns holders with the project's long-term health.

Not always, but it's often a red flag. A supply in the trillions is usually an attempt to make the token *feel* cheap (e.g., $0.00001). The problem is psychological and practical—it suggests low per-unit value. A better approach is a smaller supply with higher per-token value and clear mechanisms (like burns or staking) to manage inflation.

Introduce a transparent, long-term vesting schedule for team and advisor tokens (e.g., 24-month linear release). Consider a token lock-up contract that makes these funds publicly visible and inaccessible. For already launched tokens, you can propose a voluntary lock-up extension and create initiatives to distribute more tokens to the active community through rewards or engagement programs.

A high launch cost pressures creators to 'make their money back' quickly, often leading to pump-and-dump schemes or excessive initial token allocations. A low, fixed fee like 0.1 SOL (~$20) removes this pressure, allowing creators to focus on fair distribution, community building, and long-term project value instead of short-term financial recovery.

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