Hey everyone it's really great to be here um as Anna mentioned I'm Shane midor I'm the CEO and founder of forged and today we're going to be talking about a uh pretty controversial topic within cryptocurrency sectors and that's that uh price matters it's one of these things that uh project Founders tend toBe really reluctant to talk about it's sort of this internal taboo within Circles of we want the price to perform well because we know that that's a positive aspect of user experience but we're only allowed to talk about the technology today we're going to be talking about compliance strategies thatYou can utilize as token issuers in order to optimize both token and protocol performance all while continuing to eat glass you can still ship the tuck you can still ship good product while focusing on optimizing for Price performance so I'd love to give the the the tldr the the too long didn'tRead you know if you don't want to listen to me ramble here up on stage um ultimately we'll dive into some of the common pitfalls that token issuers found uh find themselves in when they're launching uh going through a token generation event or post tge and some ofThe common pitfalls are botch tokenomics designs um aggressive supply side inflationary Tendencies following tge botched relationships with market makers that can turn the relationship sour and even predatory or parasitic and finally we'll talk about issuance mechanisms so how are you supposed to work with a centralized exchange or a decentralizedProtocol in order to put your project in the best position to succeed um ultimately we'll talk about some ways that Forge can help we can offer best practices we have a blueprint we have a framework for optimizing all of these Niche Concepts optimizing your tokenomics optimizing the way that youWork with market makers and helping you find strategic Partners whether they're centralized exchanges or decentralized protocols all to put the token in the best position to perform well because that's what we all want at the end of the day sometimes we're just a little too scared to talk about it out loud soWhy am I here and why does forged exist um we're a freeo use platform we a public good for anyone building on salana we're already working with a handful of projects within the ecosystem our goal is to allow these talented entrepreneurs that have innovative ideas and groundbreaking technology to putTheir head down and continue shipping good product while we handle the rest we like the esoteric stuff we've done it plenty of times before there is a blueprint for Success we want to help optimize your future performance while we focus on that more esoteric stuff so get the ball rolling with anUnpleasant and a somewhat controversial truth within the ecosystem that is that I truly believe that token price performance is actually more important than any underlying technology or any fundamental value that a decentralized application or a protocol can build see tokens are the ultimate way to convert our customers into ourShareholders right there are incentives that we utilize to really encourage users to allocate time energy and resources to our decentralized protocol so that we can accomplish our end goals um we have to remember every now and then that these individuals are rational actors if you have down only pricePerformance for your token that incentive is going to be effectively meaningless for them it's a really poor source of motivation in order to get them to do things that you need in order to scale your protocol ultimately that poor token perform performance is going to catalyze a negative feedback loop that isUltimately net negative for you as the protocol founder so it all starts with poor token price performance when you have a downon pricing Trend that means whatever incentives that you offer to the end users are going to be Hollow there's no monetary value if the price continues to decline regardless of theQuantity of tokens that you're receiving if you have hollow incentives you are unlikely to be able to attract customers to your protocol and if you can't attract customers you're not going to have a lot of protocol activity low protocol activity means that you won't generate lots of Revenue at the protocolLevel and if you're not able to generate any sort of Revenue due to low protocol activity there's no value that you're capturing and therefore no value that you can pass back to token holders and thus we've got this negative feedback loop it all starts with poor token pricePerformance as as a result you're getting Hollow incentives with no incentives you won't have any users with no users you're not going to have any sort of onchain activity nor will you have revenue and as a result you're not going to have any sort of value to passBack to token holders there the speculative demand for your token will diminish even further thus further exacerbating this poor token price performance when I hear claims in the ecosystem like token price doesn't matter as long as you're shipping good technology not only do I find them unproductive but I actually find them toBe very uninformed and they display a fundamental misunderstanding of why tokens exist in the first place right tokens exist in order to catalyze individuals and end users in order to perform activities that we need in order to scale the network the tokens need to have monetary value right of course ofCourse the technology is important I'm not denying that we're all building groundbreaking stuff here you need to build Innovative technology the product has to have good product Market fit but if you're not putting your token in a position to succeed why would you even bother issuing one in the firstPlace when I talk to projects about the importance of price matters often times I've met I've been met with the push back of yeah Shane like I get it the token price matters but once I launch things are kind of out of my hands right I'm building good Tech but maybe theyDon't recognize things what do you expect me to do like manipulate the market post tge that's not what I'm suggesting here I want to be clear and we talked about compliant measures by no means am I suggesting that we engage in price influencing trade activity what I amSuggesting is that unbeknown to many token issuers you actually are in control of your own destiny it comes down to something really quite simple right what influences token price well as you transition from the primary Market to the secondary market via tge your price is going to be determined by theIntersection between supply and demand through a process that we call Price Discovery right buyers and sellers are going to interact with one another as they assess what they deem to be fair value of your asset by extension your protocol as a whole so welcome back to econ 101 things are really quite simpleIntersection of supply and demand and what is supply and demand influenced by well three major things all of which you have complete control over the first are your tokenomics the second is the manner in which you collaborate with a market maker and the third are the mechanisms that you employIn order to list and facilitate a token generation event for your project contrary to popular belief tokenomics are more than just supply side graphs right often times when I speak with a project and I ask them to walk me through their tokenomics they'll hand me a pie chart an emissions curveAnd essentially wipe their hands with it tokenomics are a hell of a lot more than supply side and understanding what tokenomics are will really start opening up Your Arsenal of tools and allow you to have more control over post tge price performance at forged when we think ofTokenomics uh we like to think of it as the study and the manner at which value is shared and distributed amongst Network participants right when we solve a problem value is created so tokenomics dictate and they set a rules as to how we share and distribute that value amongst Network participants soTokenomics are you know really encapsulated by much much more than how your cap table evolves over time we need to think through things like the token utility what are our demand drivers why do people actually want this token how do we capture value and distribute that back to network participants uh what isThe business model and what are the incentive structures and then last but not least what are the supply side Tendencies for this uh project so let's move on let's talk about some common pitfalls and how we navigate them properly I'll start with one that most of us are very familiarWith at least at a superficial level and that's low float High fdv we heard a lot about this after uh serum took the world by storm in August of 2020 and a lot of salana projects followed that Trend throughout 2021 and into 2022 but what does it actually mean whyIs it bad and how do we mitigate the risks associated with that lowf float High fdv means that a project is going to transition into the secondary market via tge with only a small percentage of their total token Supply unlocked and in circulation there's going to be aMassive influx in demand in the secondary Market as individuals that are speculating perceive the market capitalization of this project as undervalued relative to competitors so essentially what we're doing is we're constraining the supply side but we're aggressively Shifting the demand side outward which will result in aggressive price appreciation implying a marketCapitalization that makes sense based on what the project is doing relative to its competitors but an absolutely egregious fully diluted valuation at that point thereafter you're going to have a programmatic release and massive inflation as tokens are unlocked and enter the circulating Supply so as we shift that supply curve outward we'reGoing to see down only price action so we actually did a study of projects issuing tokens in the salon ecosystem following the rise of the serum ecosystem and into early 2022 and we found that on average projects were tge eing with roughly 5% of their total token Supply in circulation and theAverage duration of their emissions thereafter was a little over 5 years so essentially what you need to think about based on that emission curve is that the project is communicating outwards that they intend to increase Demand by 1,9% in that 5-year span just to keep Pace with the supply side shiftI don't know about you but as an early stage investor I might be hesitant to allocate Capital to a project that has such aggressive projections in Revenue growth you should be thinking the same way when designing an emissions model another example of lowf flat high fdv isWorldcoin uh issued by Sam mman open AI chat gbt just early this year they launched with 1% of their total token Supply in circulation and over the next 3 years they they've communicated that there will be a 60x in Supply right that implies a week-over-week increase of 40% at the current market capitalizationWhat that project is telling the outside world is that they intend to acquire $80 million worth of net new buyers all of which that will have Diamond hands every week for the next 150 weeks just to keep the price stable based on the supply side Tendencies that's veryAggressive so what can we do as Founders in order to mitigate these risks well we should stop thinking of token emissions in the supply side of our tokenomics as just afterthoughts programmatic ways at which we distribute incentives to network participants instead we should shift the perspective and think aboutHow much demand are we likely to have in the secondary Market we need to be able to have that demand meet or exceed the supply if we want to optimize for token performance as as a result you might be more conservative with your emissions curve and you might be more conservativeWith the manner in which you distribute these tokens to the market you should also be thinking about more conservative emission unlock durations and even Milestone based emissions next I want to talk briefly about predatory Market making a lot of projects know that they need to workWith a market maker but don't know the best way to structure a relationship with a market maker and a lot of projects will put themselves in a position to fail by engaging market makers through a relationship called a loan plus call option structure essentially a market maker will getAccess to a large percentage of a Project's total token Supply and that loan will carry With It Strike prices granting the market maker the option but not the obligation to purchase these tokens at some point in the future essentially without going into too many gory details of what's going on theProject is always putting the market maker in a position where they are incentivized to short sell the token there are different ways that they are incentivized to short sell the token perhaps it's to influence the price in order to lock in a more favorable strike price or perhaps it's too short receiveLots of proceeds immediately after tge influence the price downward and then repurchase the tokens at a favorable price thereafter and capture the spread regardless of the manner in which the market maker chooses to profit unless you taper the Market maker through intelligent contract structuring and monitoring they are likely to engage inThis predatory behavior essentially you are changing the appetite and the disposition of your supply and inducing lots of downward sell pressure into the market at a really critical time for your project immediately following tge so how do you mitigate the risk with this first you need to monitor yourMarket maker you should have insights into fill order volume the direction and disposition are they they buying are they selling are they a maker are they a taker you should have real time monitoring for this you should also taper the amount the quantity of tokens that you're loaning out to these marketMakers don't give them as much influence in the secondary Market following your tge you also need to have flexible loan structures it should not be a threeyear fixed loan duration you should have the ability to cancel or call back these loans at any point in time that you mayBe suspecting the market maker to aggressively short therefore catalyzing them to cover that short and therefore recovering the price as a result it needs to be a balanced relationship uh the market maker needs to be incentivized in order to work with a project but it shouldn't be so one-sided andPredatory last topic that I want to discuss is mispriced opening prints and the mechanisms that projects use to transition from primary to secondary markets uh misprice prints refers to mechanisms that either centralized or decentralized platforms will use to their own benefit when supporting a project at their tge so for exampleCentralized exchanges will facilitate a direct listing or an initial exchange offering and list you thereafter many Dex protocols instead of just allowing you to see a liquidity pool will allow you to engage in a liquidity balancer pool or Dutch auction in order to facilitate a small fund raise before listing youThereafter the issue with most of these mechanisms is is that they're introducing a lot of imbalance in terms of supply and demand once you hit the secondary market so I want to use the example really quick of duck Dutch auctions and lbps what Dutch auctions will allowUsers to do is potentially purchase and invest in a project in the primary market during a phase of what they refer to as elevated price Discovery because there's elevated price Discovery uh these are usually marketed as Fair launches the unintended consequence of fair launches and Dutch auctions is thatThey're essentially sucking the demand out of the secondary Market by satisfying those buyers in the primary market now once the project lists on a decentralized or centralized exchange the opening print implies a fair value what a lot of buyers and sellers agreed upon however the tokens in circulationDon't have any demand to interact with therefore people attempt to take profit they have significant price impact and the price goes down only why because you've introduced an imbalance in the supply and demand you've allowed the buyers to buy in the primary Market when people are accustomed to them buying inThe secondary market and what's the consequence of this well people are going to see a lot of red candles following your listing and they're going to take that as an indication of deteriorating fundamentals they're going to say something's broken maybe the tech was overvalued maybe the team rugged usBecause why else would the price go down which is going to cause further price capitulation which is again a poor user experience for us all how do we mitigate these risks well I don't suggest going live with Fair launches or lbps and when you list on centralized exchanges youHave to understand how they intend to prey on you in order to structure what's called opening order books properly with your Market man maker to prevent against large green candles followed by consistent red candles as the price declines so just a quick summary here uh first and foremost you need to careAbout your token price it needs to be a priority um that price is of reflection of supply and demand and supply and demand is influenced by things that are very much within your control as token issuers and project Founders specifically Your tokenomics Design the manner in which you collaborate withMarket makers which for the avoidance of doubt you need to do you should but you need to structure the right relationships with them and lastly the manner at which you transition from the primary to the secondary Market with centralized or decentralized exchanges um best part is you don't have to doThis alone that's what forged is here that's why we're a public good operating in the salana ecosystem we want to work with project Founders in order to help optimize that strategy so we like to think of forged as the ultimate toolkit to optimize toen in protocol performanceAgain we're free to use public good you can deploy Advanced Market Mak strategies on various centralized and decentralized exchanges and non-custodial capacity you can optimize your tokenomics with us you can automate your token distribution via Smart contracts you can monitor your performance in the secondary Market with automated reports to keep your marketMakers honest and you can learn about fundraising in a fully compliant capacity to help scale up that growth Capital we're working with a lot of projects in the ecosystem right now we'd love to work with more Founders that are learning more about this very esoteric process to prepare for tge and how toOptimize your per performance thereafter I'm here with my team uh the rest of this week we'd love to talk with anyone you know that's contemplating issuing a token or is currently preparing for tge really appreciate you guys taking the time thanks for listening