"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 comprehensive opening of the project's ecological market. Of course, the TGE of the token is just the beginning; the key lies in what strategies are adopted to empower the token after it is introduced to the market. Tokens with 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 innovate in the tech field, can maintain high market capitalization 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. After receiving 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 top CEXs, a larger trading market, a broader investor base, and the narrative and financing aspects of their own projects.
However, in reality, these projects often overestimate their influence, especially as the industry evolves 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 earlier, 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 a community round, such as an IDO. 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 was extremely weak. Although LayerZero and zkSync both hoped to establish community consensus through airdrops, the effects were evident. Heavy witch hunts and unreasonable airdrop rules have caused these projects to deviate from the community. With whales and VCs holding large amounts of tokens, the market lacks reliable consensus to support buying pressure, making it inevitable for tokens to fluctuate or even significantly drop.
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 up 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 the field of business marketing. In the crypto space, capturing niche long-tail groups remains a crucial aspect. In fact, while the influence of individual long-tail users in the crypto market is limited, the cumulative impact 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 for building a strong community. Providing the community with some bargaining power and better early market participation opportunities is key to establishing consensus in the project's early stages.
In fact, during 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. Ethereum needs no further explanation. 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 higher than its TGE price, while AVAX (through Tokensoft IDO) peaked at $146.22, about 300 times higher than its TGE price.
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 this market cycle, many projects have overlooked the importance of community consensus, such as LayerZero and zkSync. This also indirectly confirms that launch methods like ICOs and IDOs have long been deeply ingrained in the DNA of crypto.
Therefore, we can conclude that projects that better embrace their communities are likely to perform well in the subsequent market. Conversely, ecosystems that establish deeper 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 the 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 (accounting for about 50% of the total TVL in the Scroll ecosystem). Currently, Pencils' single-chain staking volume has surpassed twice that of Binance's Farming project Altlayer, demonstrating 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 communities with opportunities to participate in some quality projects early on but lack a certain degree of freedom. Communities typically do not have a voice and can only passively participate. Pencils Protocol's LaunchPad section further decentralizes power to the community, bringing more choices and initiative to community users. Users can not only participate in the early listing of projects in a DAO manner but 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. Pure airdrop actions inevitably bring potential threats from non-loyal speculators, while 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 community recognition early but also allows users to become early followers, participants, co-builders, and contributors to the projects. By granting bargaining power to community users, they also become loyal investors in the projects (an effect that most LaunchPad ecosystems find difficult to achieve). Users, having participated in early construction and obtained tokens at a low price, are more deeply bound to the project and are more hopeful for its 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 effects to 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, tokens can further bring a series of new benefits to users within the Pencils Protocol ecosystem while continuously capturing liquidity from the ecosystem. From the time of the project's token LaunchPad to its market introduction, Pencils Protocol can continuously empower it, achieving a situation where users, project parties, and the Pencils Protocol platform all benefit.
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 become a new value niche in the on-chain world.
Pencils Protocol's upcoming IDO for the market
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% unlocking at TGE) / $1.5 (6 months linear unlocking, 40% unlocking 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 will 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 upcoming launch of Pencils Protocol's series of functions, 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/@PencilsP...
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