At FAIM, we are a digital asset company with AI and blockchain at the core of our business. Our work with many different blockchains has led us to consider Avalanche as a preferred choice. We currently use Polygon and others but feel that change is in the air!
FAIM does not have our token strategy in place but it is a key part of every Web3 based company because of the community and transaction value. Here are some reasons why we are going toward Avalanche:
L1 (Layer One)* and gas for utility:
Building an L1 on Avalanche and using our own utility token for gas can offer several benefits:
1. Enhanced Token Utility and Value:
- Increased Demand: Using our token for gas creates consistent demand and a clear use case, potentially increasing its value and attracting investors.
- Ecosystem Growth: It incentivizes users to hold and use our token within our ecosystem, fostering growth and engagement.
- Tokenomics Control: We gain greater control over our tokenomics, allowing us to design mechanisms like burning or staking to manage supply and influence value.
2. Improved User Experience:
- Reduced Friction: Users don’t need to acquire AVAX (Avalanche’s native token) to interact with our L1, streamlining onboarding and transactions.
- Branding and Identity: Using our own token reinforces our brand and creates a distinct identity for our L1.
- Potential for Lower Fees: We can potentially offer lower gas fees compared to using AVAX, attracting users and encouraging activity.
3. Customization and Flexibility:
- Tailored Fee Structure: We can design a fee structure that aligns with our specific needs and goals, potentially offering discounts or incentives for certain actions.
- Governance and Control: Using our own token can provide greater control over network governance and decision-making processes.
- Innovation and Experimentation: We have the freedom to experiment with different tokenomics models and incentive structures to optimize our L1’s performance.
4. Interoperability and Network Effects:
- Bridging to Avalanche Ecosystem: While our L1 would have its own token, it can still leverage the interoperability of the Avalanche ecosystem, connecting to other subnets and benefiting from shared security and liquidity.
- Potential for Cross-Chain Use Cases: Our token could potentially find use cases beyond our L1, expanding its utility and reach within the broader Avalanche ecosystem.
Examples:
- Crabada: This play-to-earn game built its own L1 chain on Avalanche called Swimmer Network and uses its native token, CRA, for gas fees.
- Dexalot: This decentralized exchange operates on its own Avalanche subnet and utilizes its native token, ALOT, for gas fees and governance.
- Selfie.Live is building new work on Avalanche as part of our expansion to having an L1
Important Considerations:
- Token Design and Distribution: Careful planning is needed to ensure a fair and effective token distribution model.
- Security and Audits: Robust security measures and thorough audits are crucial to protect our token and L1 from vulnerabilities.
- Marketing and Community Building: Promoting our token and building a strong community are essential for its success.
By carefully considering these factors, building an L1 on Avalanche with our own utility token can be a strategic move to create a thriving and sustainable blockchain ecosystem.
* A Layer One blockchain is the foundation of a blockchain ecosystem, providing the basic infrastructure for securing transactions and executing smart contracts, like Ethereum or Bitcoin.