Written by: hitesh.eth
Compiled by: Block unicorn
In the world of utility tokens, tokenomics are carefully designed to incentivize users, and many projects also employ governance systems to keep the community involved. However, the main challenge remains: how to build a loyal, sustainable community that can drive organic growth and translate into long-term token performance.
Many projects, especially those backed by venture capital, rely heavily on airdrops and point farming strategies to create short-term hype. However, these strategies often lose their effectiveness quickly after the token is launched, especially when the airdrops reach a large audience and fail to meet expectations.
The problem is twofold: 1) while airdrops attract users eager for immediate returns, these users tend not to stick around for the long term, and 2) their unmet expectations can lead to negative emotions toward the project.
Instead of fostering loyalty, airdrops often dilute community participation, and the community that should have been the backbone of the project's growth becomes a source of depressing token prices.
Still, the entire crypto space is filled with users who crave incentives but aren’t deeply tied to a utility token. The key missing ingredient is the “fanatic” loyalty exhibited in certain meme coins. These communities, driven by entertainment and collective energy, tend to form stronger emotional bonds with their tokens.
Solution: Community Network
What if we can combine the advantages of utility tokens and meme coins? The idea is to create a "community network", where a popular meme coin project establishes partnerships with multiple utility token projects to generate passive income for community members. Here's how it works:
1. Meme coin staking contract: A well-known meme coin project sets up a staking contract to allow its community members to stake their meme coins. In return, the utility token project promises staking rewards to the meme coin project.
2. Partnerships with utility tokens: The meme coin project establishes partnerships with up to three utility token projects. Community members only need to stake their meme coins for at least 30 days to receive staking rewards from these three utility tokens.
3. ROI from driving attention for utility tokens: Utility token projects benefit by driving attention in the meme coin community. The more engagement and buzz a utility token gets, the more effectively its incentives can be delivered to the right audience.
4. Incentive flexibility: Utility token projects can choose to issue incentives over any time period, ranging from one month to twelve months, based on the observed return on investment in community engagement and brand awareness.
Social Media Farming and Proof of Contribution
For the meme coin side, simply staking meme coins is not enough, community members must also actively contribute to the ecosystem through social media interactions. A data module can be created where community members can submit proof of their contributions, whether it is tweets, blog posts, videos, or any other form of content, to promote the cooperative utility token. This "social media farming" creates a gamified environment that encourages community members to continuously create exposure and engagement for utility tokens (farming is a term that means long-term labor to obtain sustainable benefits. It is used here in the hope that meme holders can farm for a long time and continue to gain benefits).
Similar approaches have been used in projects such as Portal, which gained widespread attention through social media farming on platforms such as Twitter. The same strategy can be applied to utility tokens with strong innovation and token economics to get them the attention they deserve while incentivizing long-term participation in the meme coin community.
Benefits for utility tokens and meme coins
Utility tokens: These projects benefit from ongoing community-driven farming. Unlike airdrop marketing, which often attracts short-term participants, community networks focus on generating real, long-term participants. Engaged utility tokens gain a steady stream of attention from meme coin holders, thereby cultivating brand loyalty and ensuring that their token economics serve a larger, more engaged audience.
Meme Coins: Meme coin communities often thrive on energy, entertainment, and the excitement of collectively earning money. By offering their members the opportunity to earn rewards in utility tokens, meme coin projects are more than just a passing trend, they become gateways to multiple revenue streams and drive innovation in the industry.
Community participation: For the community, this model introduces a multi-level incentive system. Not only can members receive staking rewards, but their contributions on social media are also directly tied to the success of the project. This mechanism makes the connection between the community and the project closer, encouraging members to be more committed to the growth of utility tokens.
Long-term vision
In the long run, community clusters could become a blueprint for crypto community structure. By combining the entertainment and fanaticism of meme coin communities with the innovation and functionality of real-world projects, these community networks can help align incentives across the broader crypto ecosystem.
As more projects join these community networks, community-driven ecosystems are likely to expand, creating a network effect where utility tokens get the engagement they need, while meme coin holders continue to benefit from increased incentives. The end result will be a thriving community ecosystem that supports innovation, sustains long-term growth, and fosters lasting loyalty between different types of tokens.
