XBorg, a project that spun out from SwissBorg in 2022, is focused on revolutionizing the gaming industry through a player identity protocol. This protocol enhances online experiences by giving users true data ownership.
In this discussion, Connor Kirsten, Head of Growth & Marketing at XBorg, explores the challenges surrounding token launches in 2024. He attributes the poor performance of many new tokens to inflated valuations and the damaging effects of overhyped projects. Kirsten explains how high valuations with low circulating supplies deter new buyers, leading to sustained sell pressure and gradual price declines.
Kirsten critiques the role of centralized exchanges (CEXs) and market makers, arguing that their stringent listing requirements and disproportionate control over token supply create sell pressure and compromise community quality. He advocates for a more sustainable approach to token launches, promoting lower valuations and minimal vesting periods to attract genuine investors and foster long-term growth.
The unique strategy for the XBG token, launched in August 2024, rejects traditional CEX routes in favor of a fully on-chain approach with 100% investor unlocks. This bold move is designed to empower the community and eliminate future sell pressure. XBorg believes that if successful, this strategy could set a new trend in token launches, providing projects with alternative options to align with their communities and build strong fundamentals.
Following the launch, XBG's price initially fell from $0.15 to $0.05 before recovering to around $0.08. Luis Regis, CEO of Xborg, commented on the initial sell-off, noting that only a small fraction of early investors sold their tokens.
“We are crunching the data on XBG’s TGE. One word: Astonished. Only 13% of community seed investors sold. There is one thing for sure, our community is holding strong.”
Can you give us a brief background on XBorg?
We launched in 2022 as a spin-out from SwissBorg, and we're building a player identity protocol to drive the evolution of online experiences. Our goal is to transform the gaming industry by allowing players to own and leverage their data to unlock a more personalized internet.
Why do you believe the majority of 2024 token launches have performed poorly?
There are significantly more tokens to choose from in 2024 than in 2021, but not necessarily more capital. This makes it increasingly difficult to capture attention and attract capital as a new project. Another reason for poor performance could be that a few overhyped projects launched early in the year after massive SocialFi campaigns. These campaigns attracted a lot of attention and airdropped a huge portion of the token supply to farmers who typically sell immediately, negatively impacting the token price.
Is the low-float, high-FDV meta deterring new buyers?
Recently, tokens have been launching at high valuations with very low circulating supplies. This means these tokens face years of future unlocks, which can deter new buyers from entering. As a result, most new tokens face immediate sell pressure at launch, coupled with periodic selling pressure at each unlock event. Without sufficient buyers, these tokens slowly drift down in price, discouraging further investment.
Are the requirements to list on top CEXs harming the industry?
We believe so. Too many tokens wanted to launch in the first quarter of 2024, which skewed the power dynamics between leading centralized exchanges and emerging projects. This resulted in unrealistic demands, with teams willing to do almost anything to secure a listing on a top exchange. Often, this hurt their community, early investors, or treasury in exchange for a large listing deal, which in turn negatively impacted the entire ecosystem.
Do market makers and CEXs add extra sell pressure?
When listing on top centralized exchanges, projects are typically required to conduct an IDO at a significantly lower valuation than their listing price, often 10x lower. These IDO tokens are fully unlocked at launch. Moreover, exchanges and market makers request a percentage of a project's token supply for themselves. They also require projects to have a 5% or lower initial circulating supply. Consequently, most tokens circulating at launch are held by market makers, exchanges, and IDO participants. The project's community receives only a tiny portion of the initial supply and has been negatively affected in most 2024 token launches.
Are memecoins a good case study for infrastructure projects?
When something achieves as much success as memecoins have, there are certainly lessons to be learned. Memecoins have demonstrated that launching with a high circulating supply, no future token unlocks, and a strong community is a recipe for success. If infrastructure projects can add strong fundamentals to this mix, the potential is limitless.
Are there more sustainable ways to launch a token?
We believe that lowering the valuation and decreasing vesting periods is much better for a token's long-term health. It allows skeptics to sell early and new buyers to enter positions without fearing a long unlock schedule. It also allows the token's value to grow as the project develops and delivers more utility to its holders.
Why is XBorg’s approach unique?
Our approach is unique for a few reasons. First, we proposed several launch strategies to our community, and they decided on the final one through a vote. Furthermore, it's uncommon for large projects to go against industry trends and try something entirely new. Rejecting the centralized exchange route and launching on-chain with full investor unlocks is highly unconventional in today's token launch landscape.
Involve the community in launch strategy decisions?
One of the XBG token's utilities is governance. We've hosted several XBorg Transformation Proposals so far, all deciding on major ecosystem decisions. We actively build XBorg with our holders and believe they should have a say in matters that affect their assets.
You launched XBG on August 19th. How do you feel about the performance so far?
It's still too early to tell. We experienced significant sell pressure on Day 1, which was expected given the 100% investor unlocks. The price then rebounded sharply as new buyers acquired XBG at attractive prices, and now it's relatively stable around a $65 million FDV and $14 million market cap. Presale investors are down 20-30% at current prices, so we're not happy about that and will work hard to make it right for them. Having minimal future unlocks and a high circulating supply gives us a huge competitive advantage over other new tokens, so we're confident we can build strong momentum from here.
Do you think this could become a new meta for token launches?
If XBG performs well over the next few months, I believe more projects will try this strategy. However, to unlock investor tokens, they would need to be confident in the strength of their community and their fundamentals. We hope to be a strong example of success for this model in the future. I think projects need more launch options these days.
What should someone interested in this strategy, XBG, or XBorg do?
Reach out to us on X or Discord. We'd be more than happy to share insights and advice on what went well or could have been better. If you're interested in XBG or XBorg, then do your own research—check out our website, socials, and whitepaper to learn more, and join our community. We're on the lookout for people who want to be pioneers and contribute to a purpose much bigger than ourselves.
Born in Cape Town, South Africa, Connor is currently the Head of Growth and Marketing at XBorg and part of the founding team there.
