Social Token Guidelines: Before You Create a Token
Minting a personal or community owned token (ERC20 Token) on Coinvise works on a fixed supply by default (10,000,000 Tokens) and optionally minted on a linear bonding curve. In case of ERC721 Tokens or NFTs, Coinvise mints them as unique collections under $CVIS on Ethereum and Polygon.
Personal or Community owned Tokens
Social tokens on Coinvise can be minted either on Ethereum Mainnet (L1) or Polygon (Matic) Network (L2). We typically suggest creators or communities to create a token on L1 for higher value transactions, and migrate a portion of the tokens to L2 for airdrops, rewards or other high volume transactions to optimize for gas costs. By default, the creator or the community will be the owner of the token contract.
Understanding Tokeneconomics
Core utility of your token ✨
Before you create a token, it's important to understand core use cases that drive successful interaction around them. Social tokens are best used for when they scale or incentivize coordination and engagement between communities. Incentives are ideal when it's mutually beneficial to you and your community. Popular use cases that we've seen on Coinvise include but are not limited to:
- Earn X Tokens for contributing to the community (FF DAO, Global Coin Research are great examples)
- Crowdfunding or investment in public goods
- Tokens as a form of ownership in DAOs or through fractional ownership in NFTs
- tokenized access and many more! (Learn more on how communities utilize tokens on forefront.news)
Maintaining Treasury 🛠
Once you have a clear use case, founding member(s) of the community can create an account on Gnosis to store and distribute ownership. We also suggest using Llama for managing treasuries or Snapshot for governance mechanisms. It's helpful to understand allocations of how tokens will be utilized (Eg: 70% Treasury, 20% allocation for team/community, 10% vested over time for airdrops, bounties or other incentives).
Crowdfunding 👥
Fundraising directly from your community can be helpful to bootstrap liquidity for your token through staking or raising through NFTs. Coinvise enables crowdfunding either through staking on a pool, with LPs or through NFT collections. We don't support ICO's yet, we recommend Reversible ICO by Fabian Vogelstellar. Note: Coinvise has integrated compliance for crowdfunding, as per SEC regulations. Learn more about Securities Law for Social Tokens below.
Creating an ETH/Token Pool on Uniswap 🦄
Each Uniswap liquidity pool is a trading venue for a pair of ERC20 tokens. When a pool contract is created, its balances of each token are 0; in order for the pool to begin facilitating trades, someone must seed it with an initial deposit of each token. This first liquidity provider is the one who sets the initial price of the pool.
Whenever liquidity is deposited into a pool, unique tokens known as liquidity tokens are minted and sent to the provider’s address. These tokens represent a given liquidity provider’s contribution to a pool. The proportion of the pool’s liquidity provided determines the number of liquidity tokens the provider receives. If the provider is minting a new pool, the number of liquidity tokens they will receive will equal sqrt(x * y), where x and y represent the amount of each token provided.
Whenever a trade occurs, a 0.3% fee is charged to the transaction sender. This fee is distributed pro-rata to all LPs in the pool upon completion of the trade.
Minting a token on a bonding curve 📈
The core idea of minting a token on a bonding curve is that its price increases as the supply or distribution of the token does. This means that early adopters can buy the token at a much cheaper rate relative to when the supply increases over time. Coinvise supports two types of bonding curves — linear and sigmoid. This article goes deeper into bonding curve design, but we'll briefly go over some important points to consider here. Key metrics for token bonding curve design:
- Token Metrics: Token issuance (ERC20 in this case) and total supply (capped, uncapped, vesting schedule)
- The Bond(s): Collateral (ERC20: Stablecoins, ETH), traded asset (personal/community token)
- The curve: Mathematical function (linear, logarithmic and sigmoid) and pricing structure (taxation and pricing)
It's important to understand how these metrics might play out in future and what structure fits best for your usecase. Our team at Coinvise can help you navigate through the token design and help with coming up the right design for your token.
Resources
Guidelines on NFTs (ERC721 Tokens)
Coinvise allows you to create NFTs or NFT collections on Ethereum or Polygon Network. If an NFT is minted on a L2 chain, we also allow creators to monetize it using ETH or ERC20 tokens (L1).
Where are my NFTs stored?
We're using Piñata, an IPFS provider for storing NFTs, Coinvise has no access or ownership over NFTs minted. NFTs you created on Coinvise or collected can be found in your profile.
Fees: We don't charge any additional fees for creating NFTs on Coinvise (excluding gas costs). We do charge a 2.5% fee on NFTs purchased/resold.
File Formats: Image (jpeg, png, jpg), Video (mp4, mov), Audio (mp3)
File limits: There's a 30MB file limit, currently. We're planning to add more support for larger files in the near future.
We're also planning to add support for bridging NFTs across different chains, fractional ownership and importing them from other web3 platforms or web2 social networks.