In the blockchain industry, many practitioners believe that blockchain projects without tokens have no soul. The "tokens" here usually refer to tokens issued on the public chain, which users can withdraw to decentralized wallets and trade on the chain or in centralized exchanges. But in fact, for the vast majority of blockchain projects, whether it is token economics design, exchange operation, or the combination of technology and public chains, they have not yet reached a sufficiently professional and mature level.
More importantly, the issuance and application of tokens face a complex regulatory environment worldwide. The direct issuance of tokens by start-up teams not only brings huge compliance pressure, but may also lead to operational out-of-control. Therefore, a safer option is to first motivate users through a points system, and then gradually convert points into tokens after the ecosystem is stable, and migrate them to the blockchain to complete assetization.
The value of points: from motivation to transition
The advantage of the points system is that it provides a low-cost tool for projects to verify the market, while avoiding the legal risks in the early stages of token issuance. Through points, the team can provide rewards to users within the application to enhance user stickiness and activity. When the points mechanism gradually matures, it can be tokenized, given more value, and circulated on the chain.
This model not only improves the operational flexibility of the team, but also builds user trust and ecological foundation through points, laying the foundation for the future token economy. For example, a blockchain platform that focuses on community autonomy uses points to encourage users to vote and participate in governance tasks, and introduces on-chain tokens after the points system is stable, allowing users to more intuitively feel the value and role of tokens.
Take HashKey Group, which recently issued a token, as an example. Founded in 2018, HashKey Group is a leader in digital asset financial services in Asia. HashKey Group is known for its comprehensive Web3 ecosystem layout, covering multiple core areas such as trading, investment, tokenization services and infrastructure. Its main businesses include two trading platforms, HashKey Exchange and HashKey Global. Among them, HashKey Exchange, as the first licensed virtual asset exchange in Hong Kong, provides users with compliant and secure trading services; while HashKey Global provides diversified digital asset trading services to global users and holds a Class F license from the Bermuda Monetary Authority.
HSK is the core token of the HashKey ecosystem, designed to support its vast business network and enhance user engagement. With a fixed total supply of 1 billion, HSK was launched through a private distribution, avoiding the legal and compliance risks that may be involved in a public sale. This distribution method directly links the value of the token to the activity of the ecosystem, making it more sustainable. In actual application scenarios, HSK is endowed with multiple functions. In exchanges, HSK can be used to pay platform fees and provide holders with transaction fee discounts, significantly reducing transaction costs. In addition, as a core tool for community incentives, HSK promotes user participation in ecosystem construction and increases community activity through various reward programs. Users holding HSK can also get priority access to new products and services launched by HashKey, further enhancing the user experience. This diversified application design makes HSK not only a functional token, but also a key driving force for the coordinated development of the ecosystem.
The HASHKEY token issuance model and application scenarios provide valuable experience reference for the startup team. In the process of HASHKEY token issuance and promotion, they adopted the following strategies:
1. Ecosystem incentives and distribution
HASHKEY tokens are not sold publicly, but distributed through internal ecological incentives. This model avoids the risk of violating securities regulations and effectively expands the base of token holders through the reward mechanism.
2. Mission-driven airdrops
Users receive token rewards by completing specific tasks. This approach not only enhances users’ sense of participation in the ecosystem, but also promotes community activity and brand communication. For example, HASHKEY once rewarded tokens through ecological activities to encourage users to share and promote ecological content.
3. Combining business and technology
HASHKEY tokens incorporate multiple functions in practical applications, such as participating in governance, paying handling fees, and exchanging ecological services. This token economic design is both in line with business logic and promotes the in-depth application of blockchain technology in the financial field.
This progressive model from points to tokens not only allows HASHKEY to avoid unnecessary compliance risks, but also enhances users' trust and stickiness to the project.
A win-win path for compliance and commercial verification
The path from points to tokens is not only the key to project legalization, but also a necessary link for business verification. As a Web3 entrepreneur, if token issuance is also in your future roadmap, perhaps starting with points is a more appropriate development path. We can conduct a specific analysis from the following four aspects:
1. Market verification of user incentives
Whether it is traditional centralized points or decentralized project tokens for the future, the core issue to be solved is user acceptance. The core value of the early points system is that it provides project owners with a low-cost tool to test the market. Through the points reward mechanism, the team can observe the user's acceptance and stickiness to the project. For example, an application that focuses on decentralized knowledge sharing can design points reward rules: users get points for uploading high-quality content, and additional points can be awarded when the content is liked or collected. On the one hand, this form attracts early user participation, and on the other hand, it accumulates project data, providing a real basis for the subsequent tokenized economic model. The points consumption data also reflects the user's demand preferences for different payment services. This market verification not only improves the initial operational efficiency of the project, but also points out the direction for subsequent tokenization design.
2. Timing of tokenization
Pragmatically speaking, tokenization is a natural extension of the development of the points system, but its timing needs to be combined with user base, ecological construction and technical preparation. Initially, users were encouraged to participate in minting and trading in the form of points, and then gradually transitioned to tokenization after the points system matured. This strategy effectively avoided the problem of unsalable tokens or user loss caused by "imperfect technology and imperfect ecology". For example, a certain NFT project achieved a daily transaction volume of over one million US dollars on the first day of the token launch after its points system was running for one year. This grasp of the timing of tokenization provides an important reference for start-up projects.
3. Balance between compliance and financing
Many teams mistakenly believe that tokens are the only tool to attract investment. But in fact, the financing model can be more flexible. For the vast majority of blockchain startup teams, equity financing can be used to obtain funds in the early stage. On this basis, if the project has the need to issue tokens in the future, the two parties can clearly stipulate in the shareholder agreement that when the project develops to a certain stage, a certain proportion of tokens will be allocated to investors. This method not only meets the funding needs of the team, but also avoids the compliance risks of direct token sales. In addition, many start-up projects introduce qualified investors or investment funds by setting up overseas companies (such as Hong Kong or Singapore), and at the same time increase user stickiness by combining a points reward mechanism. This can not only ensure financing compliance, but also improve project valuation through verification of user data and business scenarios. This method meets funding needs and avoids the compliance risks of initial token sales.
4. Linkage verification of technology and application
The linkage verification of technology and business scenarios is the key to the success of project tokenization. For example, a blockchain project focusing on green energy trading initially used points to incentivize household users to upload electricity consumption data and energy-saving measures, and accumulated a huge energy data pool. In the technical verification stage, the platform exchanged points for environmental protection tokens, combined off-chain energy data with on-chain smart contracts, and completed the transition from points to tokens. The advantage of this model is that points are not only a user incentive tool, but also provide real-world scenario data in technology application testing, helping the team to identify problems and adjust strategies. After the model has been adjusted for multiple rounds, a public risk pool is officially established through tokens. This strategy greatly reduces the risk of failure after going online.
Through the above strategies, the team can not only steadily advance the compliance of the project, but also effectively verify its commercial value and user needs, laying a solid foundation for the future token economy.
Attorney Mankiw's Summary
From points to tokens, it is not only an evolution of a business model, but also an entrepreneurial path that combines market verification and compliance innovation. In the context of an increasingly complex global regulatory environment, start-up teams should abandon the fantasy of issuing tokens in one go and adopt a step-by-step strategy, starting with points, accumulating data and optimizing mechanisms through market verification, and then transforming successful experiences into asset applications on the blockchain.
This "progressive tokenization" model not only reduces the legal risks in the early stages of the project, but also makes the verification process of commercial value more natural and efficient. Only by constantly experimenting and optimizing within the framework of compliance can blockchain entrepreneurs find their own breakthroughs in a complex and changing market environment. Internet entrepreneurship emphasizes small steps and fast running, but in the exploration of the blockchain field, steady and solid progress may be the real "fast".
