Lean Token Design

A token framework for communities with minimum viable utility

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The explosion of long-tail of tokens might upend the crypto narratives as we know it. Markets are manufacturing headlines faster than our mental models. 

Bitcoin is the purest form of decentralization (and always will be!) But there are new communities blossoming on Ethereum, appealing to the same ethos as Bitcoiners believe. Communities that don’t have a premine, didn’t take any venture capital, and are looking to build sustainable communities with a real product. 

Currently, many projects like Compound are following the “progressive decentralization” playbook. While this may be the best approach for infrastructure and crypto primitives, creators and communities are searching for alternatives that can help gain early supporters while aligning long-term incentives without taking on investment.

Lean Token Design

Unlike progressive decentralization, The Lean Token Design framework suggests that tokens shouldn’t have any complexity, but have some minimal viable utility to rally an early community. These tokens would be introduced early on in a community’s lifecycle along with an initial use case for the token to drive early demand. The framework also introduces a deliberately nebulous relationship amongst the community. As the community grows, the economics, contributions, and values become more defined, leading for the token to evolve and capture those contributions. 

Minimum Viable Utility

$YFI (Yearn.Finance) is one example of a network that started off with minimum utility and grew alongside its community.