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No broken windows — how to resurrect a derelict crypto project

The key to fixing broken crypto projects is to re-engage communities and repair dysfunctional token economics says consultant Jason Brink

If cryptocurrency projects were to be represented as a city, at its center, of course, would be the massive spire of Bitcoin. Surrounding it would be several avenues of moderately well-built buildings (Litecoin, Ethereum, Dash, etc) and beyond this would extend a great urban sprawl. Here hundreds of poorly built, but very shiny projects would struggle to differentiate themselves from one another through the clever use of moving-point backgrounds, pretty whitepapers, and paid advertising.

Another area of the city would be a district packed with dead ICOs which became insolvent because they collected BTC and ETH at the peak and sold at the valley. There would be the walled section of the city patrolled by the SEC where fraudulent projects (and hopefully their fraudulent developers) are locked up — situated right next to an over full parking lot of poorly conceived and useless ERC20 token projects with no business use case and no real function.

Between these great areas, there is the sprawl of urban decay where projects molder with broken blockchains, stupidly high-staking structures, or scandal-ridden teams.

Diamonds in the rough

As depressing as these great swaths of dead and decaying projects look at first glance, they are also a source of great opportunity in the world of cryptocurrency. These projects, many founded years in the past, are the digital equivalent of prime real estate for those who are willing to put in the time, resources, attention, and passion needed to give a project a rebirth.

However, there are significant obstacles that confront a crypto-renovation effort. Beyond the technical aspects of a broken project, there are many other factors which must be considered. Who controls the domain and the social media accounts? If it is the old developer, you will have a hard time. What does the rich list distribution look like?

If there is some account that has been staking for years and holds 38% of the total supply, you are going to have major problems. What is the status of the current blockchain? If it has a runaway supply problem and you don’t act fast enough, your efforts may go to waste before you have even released a new chain.

All that said, the number one factor that determines whether or not the efforts to reboot a currency will be successful is the care and attention given to its community. When starting the reboot process, it is likely that there will be intense resistance from some members. However, as time goes by and they see you working on building the project on a daily basis, contributing funds from your own pocket to development, marketing, and community building, and are doing everything you can to hold the community together, you will begin to gain allies.

As time continues to march onward and progress picks up pace, this community which was on the very brink of despair, will begin to see light at the end of the tunnel. They will transition from resentful bagholders to enthusiastic evangelists ready to see their favorite project succeed. There is no one who will promote a project more strongly than one who feels vindicated that the one-satoshi project painting their blockfolio red has begun to turn around.

A case study in creating value

All these challenges and more had to be addressed in turning Vulcano ($VULC) from an utterly broken blockchain project into a viable research-focused cryptocurrency. The project centered around the geothermal energy industry, but unfortunately its token economics were fundamentally dysfunctional

Rather than the 950% token emission rate (which is a terrible idea all by itself), the functional rate of emission was actually over 320,000%. In addition to leading to near-instant dilution of any holdings, this also meant that the blockchain would quickly run out and die as it hit its hard cap through monthly near-doublings.

As of the end of August 2018, however, this is no longer a problem as we have released a new wallet, swapped the old VULC for new VULC at a ratio of 100:1, and begun working on a rebranding campaign to relaunch the project.

It is critically important in a process like the one implemented at VULC that the focus is on creating value
This doesn’t mean just making the price rise – that will happen on its own in time. Creating value means giving the project a purpose, a real business use case, a real organizational structure, and a true future.

Blockchain is the technology that underlies a megatrend that has the power to fundamentally reshape business, industry, entertainment, health, and nearly every other domain of human experience, but it can only do this if it is correctly, transparently, and equitably implemented.

In the crypto turnaround world, your ability to act in a transparent fashion is your armor against the frustration of a community which has been ignored for a long time. Act decently and above reproach, handle your business, create good work, and protect the community, and they will appreciate it in the long term.

About the author: Jason Brink is a community management expert who advises companies on best practices for community growth in the crypto space.


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