Uniswap founder Hayden Adams commented on the popular trend of “tokens.” While he did not specifically mention which projects, he is closely related to teams that implement a “point-based” issuance system. He also expressed his views on “good token distribution.”
Eight principles of “good token distribution” are as follows:
1. “Tokens, not points.”
2. “Avoid farming those farmers.”
3. Achieve real liquidity on the first day.
4. Avoid using a high token supply to exploit unit bias.
5. Tokens should be distributed generously.
6. Do not market token prices.
7. Keep it simple.
8. Make thoughtful and responsible decision-making.
Different opinions: Defending the point system
Uniswap founder Hayden Adams’ thoughts are as follows:
Hayden Adams may be emphasizing the distribution of real tokens rather than points that may lack intrinsic value or blockchain verifiability.
Hayden Adams believes that token distribution should be transparent and honest, and that vague or enticing implications may unfairly raise the expectations of farmers.
Hayden Adams emphasizes avoiding artificially low supply (low float) to manipulate token prices. Instead, it is suggested to distribute a sufficient amount of tokens openly and achieve true price discovery on decentralized exchanges (DEX) considering the fully diluted valuation (FDV) rather than just market capitalization (mcap).
Although some tokens have seen rapid price increases and high market capitalization, their actual circulating supply is very low and the chips are quite concentrated. This easily leads to a situation where a few individuals manipulate the price, without any actual token utility.
(This can be checked on price websites such as CoinMarketCap, which display “circulating supply,” “total supply,” “max supply,” and “fully diluted valuation.”)
This point touches upon the use of a high token quantity to create an illusion that makes investors feel the price is affordable or valuable, which can be misleading for less experienced investors. This is also a common approach used by meme coins.
Hayden Adams believes that a large number of tokens should be distributed to the community, reflecting a commitment to community interests rather than just pursuing profit.
He warns against marketing tokens as opportunities for quick profits, as this may damage their legitimacy and long-term value.
This is a call for simplification of token economics, avoiding unnecessary complexity that may confuse or alienate potential users.
Hayden Adams encourages entrepreneurs to make defendable and thoughtful decisions with the goal of building something lasting and valuable, rather than simply pleasing or manipulating public sentiment.
Overall, each point emphasizes the practice of ethics and sustainability. Focusing on real value, community interests, and transparent operations can help build trust and promote a healthier ecosystem.
Gnosis founder believes that the emergence of the point system is precisely to address the second point of “avoid farming those farmers.”
Meanwhile, dForce founder Yang Mindao believes that “points are just derivatives of tokens used to create pre-market for tokens, similar to call options with set exercise prices. The invention of points is to compete with existing companies like Uniswap. Points can freely create new dimensions for speculation, thereby reducing the overall cost of Total Value Locked (TVL).” This is a response to Uniswap, as these new protocols also need a point system to enhance the market.
(On-chain points provide teams with more flexibility and room for adjustments compared to token rewards.)
Uniswap tokens
Points
Further reading:
Optimism announces the third round of airdrops, giving away nearly $30 million worth of OP tokens.
ChatGPT analyzes the dollar token economy: buying bonds can earn pledge rewards, flexible supply limits.