Why (Not) to Launch a Token
If your product has real utility, the token is rarely the product.
1. The Myth of Necessary Tokens
For many teams, “launching a token” became a reflex — an assumed rite of passage rather than a technical necessity.
But 95 % of on-chain applications could function entirely in SOL or stablecoins, using ordinary fee models:
- DEXs can take swap fees in USDC.
- Games can use SOL for in-app economies.
- Creator platforms can charge a % of payouts.
In every case, a “native token” adds friction without adding physics.
2. What Tokens Actually Are
Tokens are not magic units of community.
They are bearer instruments representing promises — usually promises about future revenue, governance, or network effects.
They can:
- act as pre-sold coupons (fundraising);
- serve as collateral (risk buffer);
- or represent resource pricing (bandwidth, storage).
Everything else is cosmetic.
3. The Cost of a Token
| Category | Hidden Overhead |
|---|---|
| Design | Token supply curve, emissions schedule, and distribution fairness. |
| Liquidity | Market-maker contracts, exchange listings, and price stabilization. |
| Legal | Security classification, KYC/AML exposure, international compliance. |
| Accounting | Volatile balance sheets and unpredictable treasury valuations. |
| Focus | Engineering time spent modeling emissions instead of building product. |
Launching a token forces you to run a mini-central bank while you’re still proving product-market fit.
4. The Web 2 Parallel
Imagine a SaaS startup in 2012 deciding that instead of billing in USD, it will print its own currency and pay employees with it.
That’s what most Web3 projects did.
They confused funding mechanism with product mechanism.
A good product already has a token — it’s called customer attention.
5. When a Token Is Justified
There are valid cases:
- Resource Pricing — e.g., Filecoin’s FIL or Helium’s HNT directly meter scarce network resources.
- Security / Collateral — lending or derivatives protocols need a native risk-absorption layer.
- Cross-System Coordination — complex ecosystems needing unified accounting across sub-nets.
- Governance with Skin-in-the-Game — if decisions truly control on-chain funds or parameters.
If your project doesn’t fit one of those, you probably don’t need a token.
6. The Simpler Pattern
-
Build on Solana.
Use SOL or USDC for all monetary flows. -
Charge fees directly.
Take a small % of each transaction into a treasury wallet. -
Use equity for investors.
Keep tokenless until a genuine on-chain constraint demands otherwise. -
If governance is required, issue non-transferable access NFTs or soulbound badges instead of tradable tokens.
This model mirrors Web 2: revenue, retention, reinvestment — not speculative token velocity.
7. The User Alignment Problem
Low-float, high FDV (fully-diluted value) tokens look great on paper but punish real users:
- Users face volatility they never asked for.
- The protocol must manage token emissions forever.
- Speculators front-run actual customers.
In contrast, SOL or stablecoin-denominated apps keep users’ incentives clean and predictable.
8. The Solana Context
Solana already provides:
- native staking yield → baseline risk-free return,
- programmable blockspace → pricing and fee logic,
- built-in liquidity in SOL and stablecoin pairs.
Adding another token doesn’t expand capability — it fragments liquidity.
9. The Core Question
What problem does a native token solve that a normal fee model can’t?
If the answer is “funding,” it’s a security.
If it’s “community,” it’s marketing.
If it’s “utility,” test that with a SOL-denominated prototype first.
10. Closing Principle
Focus on building experiences, not economies.
If your product can sustain itself on cash-flow + retained users, the chain’s native token already provides all the monetary machinery you need.
You don’t need to reinvent money to make money.