Recently, it has been very cool to watch the Inleo community's LEO token rise from the doldrums and actually surpass the value of HIVE tokens, a couple of days ago. It has been a long time since that has been true... I checked back across my records and it has been since mid-2021.
It got me to thinking about what gives a community token value and what doesn't. Without a doubt, INLEO is the most successful community in the Hive ecosystem... aside from Hive itself. And yet? There are dozens of communities that have their own tokens, and for the most part those "second layer" tokens end up being worthless.
It's important to note that they're not worthless because the communities were started based on a bad idea; some of them by all intents and purposes should be quite popular because they appeal to a broad spectrum of people. Consider the Sports Community for example, or the Creative Coin Community for artists and creatives, or even one time high flyer Proof of Brain, one of the rare few that also had a community token that (briefly) was valued higher than Hive.
Each of these has a very wide distribution and once upon a time they were very popular and yet they have fizzled away to become more or less nothing. As of this morning, for example, I can buy 700+ POB tokens for a single dollar!
Bottom line seems to be that you have to have a plan, and not only do you need to have a plan, but you need to constantly update and constantly be working on your community and innovate otherwise it falls apart. But what seems to happen is that a lot people start something with a great deal of enthusiasm, but after a while they discover that it's actually a lot of work to get anything going and to keep it going and then the enthusiasm wanes a bit.
Meanwhile, a lot of such communities have a great deal of trouble maintaining a reasonable price for their tokens. Why is that? We can go a long way towards answering that by looking at the fact that those communities have very little to offer other than to tell people *"this is a way to earn extra money on Hive!"
But if the only thing you have to offer is a way to make more money what's going to happen? From where I'm sitting, what's going to happen is that everybody who earns a token is going to try to sell it so they can get more money to buy pizza or something, as a result of which the marketplace has far more sellers than buyers. And what happens to a marketplace with more sellers than buyers is invariably the price is driven down because there's more supply than there is demand. That's basically economics 101.
Perhaps it should also be remembered in all this that people tend to think they have "great ideas" but it often turns out that they (the idea havers) are the only ones who think the idea is as great as they think.
Most other people think it's a somewhat mediocre idea and so in a way starting a community ends up being a way for somebody to discover that maybe they aren't quite as clever and popular as they thought they were!
Perhaps these communities with their native tokens are little more than a microcosm of the greater Cryptosphere... where more and more projects are coming to terms with the reality that unless you have an actual value proposition — like a business plan that generates income — they are doomed to worthlessness.
Regardless, it will be interesting to see what the future holds for this strange industry!
Thanks for stopping by and have a great remainder of your week!
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Created at 2025.08.13 01:17 PST
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