"Pencils Protocol is becoming the most powerful tool for crypto projects to establish consensus in this market cycle!"
For crypto projects, the Token Generation Event (TGE) is a very important matter. It not only signifies the full launch of the economic system within the ecosystem but also means the complete opening of the project ecosystem market. Of course, the TGE of the token is just the beginning; the key is what strategy to adopt for empowering the token after it faces the market. A token with a good performance can continuously provide momentum for the project's development and attract investors.
In fact, the stock prices and market capitalization of tech companies represent investors' imagination about these companies. For instance, super companies like Tesla and Nvidia, which continuously create in the tech field, can maintain high market capitalizations for years. In the crypto market, the rise of tokens and their market capitalization depends on consensus.
The resilience of Bitcoin and Ethereum, as well as the success of ShiB and Doge, stems from the market's consensus and confidence in these leading assets. Therefore, whether other projects or crypto assets can perform well in the market after their TGE also depends on whether they possess strong consensus.
Where should consensus be sought?
Many top projects prefer to seek consensus in the secondary market, that is, after obtaining investments from well-known VCs in early private rounds, they directly list their tokens on leading centralized exchanges (CEX) like Binance and OKX. They hope to capture consensus through the brand endorsement of leading CEX, a larger trading market, a broader investor base, and the narrative and financing aspects of their own projects.
However, in reality, these projects overestimate their influence, especially as the industry develops into a new stage. The industry is changing, the mindset of users (ordinary investors) is changing, and exchanges are also changing. When a project itself has not garnered enough consensus, no one is willing to be the "bag holder." The representative projects we mentioned above, such as LayerZero and zkSync, illustrate this.
After the airdrop, LayerZero's ZRO token remained stagnant and even slightly declined under market pressure, while zkSync's ZK token fared even worse, plummeting significantly.
In fact, these projects did not have community rounds, such as IDOs. They directly listed their tokens on exchanges like Binance after the VC round, meaning the community itself had no chips and no bargaining power. In other words, the community's voice is extremely weak. Although LayerZero and zkSync both hoped to establish community consensus through airdrop rounds, the effects have been evident; heavy witch hunts and unreasonable airdrop rules have caused these projects to deviate from the community. With large whales and VCs holding significant amounts of tokens, the market lacks reliable consensus to support buying, making token price fluctuations and significant declines inevitable.
Thus, we seem to arrive at some conclusions: the consensus of a project sourced from the secondary market is usually unreliable and unreasonable; it resembles a "pulling seedlings to help them grow" behavior.
Accumulating community consensus is the key.
Chris Anderson's long-tail theory reveals the importance of capturing long-tail users in commercial marketing, and in the crypto field, capturing niche long-tail groups remains a crucial aspect. In fact, the influence of individual investors within the long-tail user group in the crypto market is limited, but the cumulative influence of numerous long-tail users in the market cannot be ignored. They often participate in various activities such as trading, community discussions, and airdrops, contributing significantly to market activity. Communities are typically a collection of long-tail users, so winning the hearts of the people is essential to building a strong community. Providing the community with some bargaining power and better early market participation opportunities is key to establishing consensus in the early stages of a project.
In fact, in the early stages of the industry, such as in 2017, 2019, and 2021, many top projects had their own public rounds after the VC round, typically through ICOs or IDOs. When users genuinely participate in the early market, they become part of the project's development. They are early investors and builders, and as genuine early users holding these tokens, their willingness to hold long-term remains strong even after the tokens are listed on exchanges.
We have observed some quality projects backed by communities, such as Ethereum, Polygon, and Avalanche. We need not say much about Ethereum. Polygon and Avalanche performed exceptionally well in the last market cycle, with Matic (through Coinlist IDO) reaching a peak price of $2.68, over 1000 times the price at TGE, while AVAX (through Tokensoft IDO) peaked at $146.22, about 300 times the price at TGE.
Thus, these projects that closely embrace their communities can unleash astonishing energy in subsequent markets, demonstrating that embracing the community in the early stages is the way to go. In fact, many projects in this market cycle have overlooked the importance of community consensus, such as LayerZero and zkSync, which also indirectly confirms that launch methods like ICOs and IDOs have long been deeply ingrained in the DNA of crypto.
We can conclude that projects that better embrace their communities will likely have promising market performances in the future. Conversely, ecosystems that can better establish deep connections between projects and communities will also become important value niches in this market cycle. The reason Pencils Protocol has gained high recognition in the market and continues to secure funding under current market conditions is partly due to its product innovation and profit expectations. On the other hand, its LaunchPad section has a higher degree of openness, granting the community greater voice.
The community consensus aggregator of this market cycle: Pencils Protocol.
Pencils Protocol is a comprehensive DeFi platform on Scroll, offering a series of products including LaunchPad, Farming, Vault, and Shop. As a leading DeFi ecosystem on Scroll, it achieved a TVL of $300 million and over 200,000 active users with just the Farming section (supporting LRT token staking) open, making it the project with the highest TVL on Scroll (TVL data accounts for about 50% of Scroll's total TVL). Currently, Pencils' single-chain staking volume has surpassed that of Binance's Farming project Altlayer by more than double, indicating its market recognition.
From the perspective of the LaunchPad section, Pencils Protocol has the potential to become the community consensus aggregator of this market cycle.
In fact, the vast majority of LaunchPad ecosystems can provide the community with opportunities to participate in some quality projects early on but lack a certain degree of freedom. The community usually does not have a voice and can only participate passively. Pencils Protocol's LaunchPad section further decentralizes power to the community, bringing more choices and initiative to community users. Users can participate in the early exploration of listed projects in a DAO manner and are also granted bargaining power, allowing them to continuously lower the cost of participating in new projects, enabling the community to recognize good and quality projects earlier and join these ecosystems.
In this market cycle, there is a lack of deep links between users and quality projects; simple airdrop actions cannot avoid the potential threats posed by non-loyal speculators, and unreasonable airdrop rules further diminish the effectiveness of airdrops. In this paradigm, users are merely early participants and contributors to the project.
Through Pencils Protocol's LaunchPad, it not only helps good and quality projects gain early recognition from the community but also makes users early followers, participants, co-builders, and contributors to the projects. By empowering community users with bargaining power, users also become loyal investors in the project (which is a result that most LaunchPad ecosystems find difficult to achieve). Users, having participated in early construction and obtained tokens at the base price, are more deeply bound to the project and hope for its better growth and development, while also looking to participate deeply and long-term in the project's construction, becoming long-term holders. It is evident that Pencils Protocol's LaunchPad model is expected to bring unexpected results for the long-term development of projects.
On another level, Pencils Protocol is not just a LaunchPad platform; it also includes Farming (Staking), leveraged liquidity mining Vault, and Shop functions. After the LaunchPad, the token can further bring a series of new benefits to users within the Pencils Protocol ecosystem while continuously capturing liquidity from the ecosystem. From the token's LaunchPad to its market-facing phase, Pencils Protocol can continuously empower it and create a win-win situation for users, project parties, and the Pencils Protocol platform.
Thus, Pencils Protocol is becoming the most powerful tool for crypto projects to establish consensus in this market cycle. As the ecosystem launches, it will also be a new value niche in the on-chain world.
Pencils Protocol's upcoming market IDO.
Pencils Protocol has also announced the sale plan for its ecological token DAPP, which will launch its IDO on the Tokensoft platform on September 18. The total supply of DAPP tokens is 100 million, of which 20%, or 20 million DAPP tokens, will be used for this sale.
This IDO sets a tiered pricing structure, including $0.8 (12 months linear unlocking, no unlocking at TGE) / $1 (9 months linear unlocking, 20% unlocked at TGE) / $1.5 (6 months linear unlocking, 40% unlocked at TGE). The lower the price, the longer the lock-up period, giving users more choices. Additionally, users holding Scroll Canvas badges (including Scroll, Scroll ecosystem, Pencils S&P badges, etc.), Pencils SOUL NFTs, and Pencils Season 1 Cards will not only receive additional quotas but also gain staking yield bonuses after completing Tokensoft KYC and subscriptions. The priority of community rights will help Pencils Protocol consolidate deeper consensus.
On the other hand, among the series of unlocking events for the DAPP token, the unlocking period for the IDO is the shortest, while other events generally range from 12 to 18 months. With the launch of Pencils Protocol's series of functions in the short term, it will not only accelerate the adoption of DAPP tokens (staking, holding to gain a series of benefits) but also speed up their destruction (for example, the Vault will use 30% of its revenue to buy back and destroy DAPP tokens). From this perspective, DAPP tokens will continuously achieve deflation during the unlocking window and form a rising value cycle.
As an ecosystem that prioritizes consolidating community consensus, we have witnessed the market performance of Polygon and Avalanche in the last cycle, especially since AVAX also conducted its IDO on Tokensoft. Therefore, the DAPP token will have a large number of long-term supporters, and the market expectations for the DAPP token after the IDO will also be quite evident.
For registration and verification on Tokensoft, please refer to: medium.com/@PencilsProtocol/tokensoft-registration-verification-tutorial-a0fcbc160bb9; to learn more: official website: pencilsprotocol.io/; official Twitter: x.com/pencilsprotocol.