Original Article Title: "Fair Release: A New Tokenomic Paradigm of Demand-Driven Token Unlocks"

Original Article Author: Dr. Daoist

Fair Release: A New Tokenomic Paradigm

As revealed in the article "Time-Scheduled Token Unlocks: An Elephant in the Room," time-based token unlocks are the root cause of the "low float, high FDV" issue. The economically sound practice is to abandon time-based token unlocks and instead transition to demand-driven releases.

Time-based unlocking not only goes against basic economic principles but is also unfair. While seemingly prioritizing community token unlocks (e.g., through airdrops), it effectively ensures that project teams and VCs can exit "on schedule" at unlock, regardless of the actual market demand for the token—inevitably leading to sell pressure. Worse yet, under the guise of "community-first unlocks," often lie undisclosed interests of project teams and VCs (e.g., through bonus airdrops or dumping from the treasury/ecosystem fund), enabling them to opportunistically and stealthily exit at token issuance well ahead of the first unlock—by which time the token price may have plummeted.

This shady practice has become an open secret, and the community and retail investors have expressed their dissatisfaction through actions—whether from the underperformance of VC coins post-listing on centralized exchanges (CEX) or from meme coins overwhelmingly dominating the current market. Why have meme coins risen? Because they had a fair launch—at least considered fairer than the "project team + VC + CEX alliance" dynamics. However, we all know that a fair launch is impossible for VC coins as the VCs have already funded the project at a lower price pre-TGE.

So, is there a solution to this problem?

The answer lies in "Fair Release": a new tokenomic paradigm—where new tokens are only released when demand increases and are fairly distributed to all stakeholders with each release. Moreover, it also features anti-inflationary properties. Based on whether the project produces positive externalities (such as revenue), Fair Release has three versions:

1. Ponzi Version (No Income): Whenever a circulating token is consumed and destroyed, an equivalent amount of new tokens is released (distributed proportionally to the team/VC/community/treasury, etc.) to maintain the circulating supply constant;

2. HODL Version (With Income): Similar to the Ponzi Version, but new tokens are released through inflation, and part of the inflation is immediately bought back and burned through income to maintain the circulating supply constant;

3. Moonshot Version (With Income): Similar to the HODL Version, but the income is not entirely used to buy back the inflation-released tokens; it is also used for pumpamentals, creating a potential "only-upwards" effect.

Below are analyses of the three models.

Fair Launch 1.0: Ponzi Version (Applicable to projects with no income)

Even two years after the collapse of the "X-to-Earn" narrative, the Web3 industry still faces a harsh reality: most projects still lack positive externalities—meaning these projects have not yet generated income valuated in foreign exchange. The tokenomics of these projects inevitably become "Ponzi"—similar to the Fed and the U.S. Treasury supporting the economy through money printing + "robbing Peter to pay Paul"—until the bubble bursts, token credibility goes to zero, and the project team no longer has minting tax to collect.

Nevertheless, for these projects, the fair launch of a Ponzi Version remains feasible—at least it can achieve a relatively fair and anti-inflationary purpose at the time of token unlocking. The key to this version lies in no inflationary release, and its operation is as follows:

· Time T₀: Assume the initial liquidity pool contains $TOKEN and $USDT, giving $TOKEN an initial price;

· Between Time T₀ and T₁: A certain amount of $TOKEN is consumed (e.g., through community interaction) and destroyed, reducing the circulating supply, driving up the price;

· Time T₂: An equivalent amount of $TOKEN is released to restore the destroyed supply, causing the $TOKEN price to return to the initial pricing level, while distributing tokens proportionally to various parties.

The Net Impact is when a token's circulating supply and price remain unchanged, while completing a round of fair token unlocking.

Fair Release 1.0: Ponzi Version (No Income)

However, due to the nature of a Ponzi economy, this is actually a castrated version of a fair release, as each release round dilutes the community's share of the circulating tokens. The token's consumption originates mainly from the community, but only a portion of the new tokens unlocked to replenish these consumed tokens is allocated to the community. While more reasonable in mechanism than a time-based unlock, this version still benefits the project team/VC at the expense of the community.

This is why we need Fair Release 2.0.

Fair Release 2.0: HODL Version (For Income-Generating Projects)

A version that can achieve a truly fair release must unlock through 「inflationary release」 followed by buyback and burn to offset that inflation. This requires the project to generate revenue priced in a stable currency.

I refer to this as the fair release 「HODL Version」 because the ability to generate income provides support for a sustainable token price. It operates as follows:

· Time T₀: Assuming the initial liquidity pool contains $TOKEN and $USDT, giving $TOKEN an initial price (similar to the Ponzi version);

· Between T₀ and T₁: A certain amount of $TOKEN is consumed and burned, reducing the circulation and boosting the price, while the project generates income priced in $USDT;

· Time T₂: Unlocking a certain amount of $TOKEN in an inflationary manner, exceeding the previously consumed and burned circulation — the inflation part is used for unlock distribution to various parties — bringing the $TOKEN price below the initial price level;

· Time T₃: All income is used for buyback and burning the inflationary issuance of $TOKEN, restoring circulation and token price to the initial level.

In this version, after each round of fair unlocking and distribution, the net impact on token supply and price is zero.

Fair Launch 2.0: HODL Version (with revenue)

Fair Launch 2.0 addresses the issues of the Ponzi version because token unlocking only occurs within the inflation portion of each release. The community is essentially able to maintain its circulating share in each token consumption-release cycle, enabling continuous incentive and participation without worrying about dilution. This also maintains the stability of stakeholder share throughout the token's lifecycle.

But the story doesn't end there... If a project can generate revenue, why not use a portion of the revenue to buy back released tokens and use another part for price support? This is entirely feasible—this is why we have Fair Launch 3.0, a magical "only-up" model.

Fair Launch 3.0: Moonshot Version (for projects with revenue and pursuing the "only-up" ethos)

While the HODL version has already achieved our core goal of on-demand token unlocking and fair distribution, its impact on token price remains neutral. The advanced version of Fair Launch introduces a positive feedback loop that drives sustained token price growth: in each Fair Launch round, some of the revenue is used to boost the token price, further incentivizing community holding and participation. I call it the "Moonshot Version" of Fair Launch because once the flywheel spins, it keeps getting bigger like a snowball rolling downhill!

The specific operations are as follows:

· Time T₀: Assume the initial liquidity pool contains $TOKEN and $USDT, giving $TOKEN an initial price (similar to the Ponzi version and HODL version);

· Between Time T₀ and T₁: A certain amount of $TOKEN is consumed and burned, reducing the circulating supply and boosting the price, while the project generates revenue priced in $USDT (similar to the HODL version);

· T₂ Moment: Release a certain amount of $TOKEN in an inflationary manner, exceeding the previously consumed and burned circulating supply—where the inflation part is used to unlock allocations to various parties—driving the $TOKEN price below the initial pricing level (similar to the HODL version);

· T₃ Moment: Allocate some revenue to buy back and burn the inflationary issuance of $TOKEN, restoring the circulating supply and token price to the initial level, while using the remaining revenue to boost the $TOKEN price.

Through this model, each fair release round will have a net positive impact on the token price. The more unlocked, the higher the token price—doesn't this sound like magic?

Fair Release 3.0: Moonshot Version (with revenue)

Compared to the HODL version, the Moonshot version only requires more precise mathematical calculations: setting the optimal inflation release rate and determining the ideal revenue allocation ratio—ensuring that a part of the revenue covers the inflation buyback, while another part is used for effective price support. Other than that, it's all about execution.

Final Thoughts

Many attribute the poor performance of the crypto market to insufficient liquidity, stagnant innovation, or narrative fatigue, but few realize that the real issue lies in unfair wealth redistribution—which exacerbates the divide between grassroots (community/retail) and institutions (project teams/VCs).

The ideology of decentralization aims to achieve a more equitable distribution of power and wealth. If unable to break free from the centralized shackles of traditional finance in terms of production relations, even with ample liquidity, technological breakthroughs, or narrative hype, Web3 cannot truly flourish.

One of the simplest steps toward a more equitable wealth redistribution is to revise the tokenomics model.

Fair Release is the simplest solution to address the prevalent issue of time-based unlocks. It follows basic economic principles, resolving the root cause of the "low circulating supply, high FDV" issue. This is not a highly profound subject but rather a practical solution. Through liquidity pools as leverage, it can create a flywheel effect for projects with positive externalities.

It may be the most fair and sustainable tokenomics model for VC coins. Join this paradigm shift and be part of this revolution!

Gabby World's Fair Launch 3.0 Practice

I have already implemented Fair Launch 3.0 (Moonshot Version) in the TGE of my project Gabby World on a decentralized exchange (DEX).

Stay tuned and let's witness its performance together!

「Original Source」

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