Why Token-Holders Should Be Incentivized For Community Engagement?

Token-holders are the owners of a Web3 project’s native coin. Primarily, they are the investors of the Web3 project. However, it is essential to utilize Token-holders, beyond investment. Token holders act as a catalyst for community growth. You can find many best practices for building strong Token-holder relationships.

Active participation from token-holders is crucial for the overall success of the project. How to ensure active community participation every day? Incentivization is a great technique for driving community participation. Token-holders should be incentivized to boost community engagement.

Providing incentives has a positive psychological impact on the token-holder. The token-holder feels good about having acquired the incentive. However, keep a watch, some members may be interested only in incentives and do not support the long-term growth of the community. Distribute your incentives wisely.

Let’s discuss the reasons why Token-holders need to be incentivized. Before that, let’s find out the negative outcomes of not incentivizing Token-holders.

Negative Outcomes of Not Incentivizing Token-Holders

Below are 3 negative outcomes of not incentivizing Token holders.

• Lack Of Motivation

  Without rewards, only a very few people participate in community activities. High chances for the community to become disengaged & stagnant. The community becomes unwelcoming to newcomers. Most importantly it slows the growth of the community.

• Poor Community Governance

  Openness & free speech are the ethos behind decentralized systems. Not incentivizing Token-holders leads to low turn-out while voting governance proposals. This results in stifled decision-making within the community. It undermines democracy & decentralization leading to a lack of trust in the governance process.

• Bad Network Effects

  Networking is the cornerstone of successful Tokenomics. Bad network effects can reduce the value of Token. Without proper incentivization, community loyalty decreases. Poor networking hinders innovation within communities & causes churn.

Why Incentivize Token Holder For Community Engagement?

We have reached the crux of the blog. Now, let’s explore the positive outcomes of incentivizing token-holders for Community Engagement.

• Strong Community Culture

  With proper incentives, more people participate in community discussions. They become more open to providing feedback & contribute ideas. It instills a feeling of shared purpose & a sense of belonging within the community. Do you know, that incentives increase long-term loyalty & reduce churn?

• Enhanced Decision Making

  When you reward your token-holders, you receive high voter turnout on governance proposals. This leads to democratic governance through collective community interest. Token-holders resort to thoughtful decision-making & become more participatory in DAOs.

• Improved Product Quality

  Token-holders are valuable sources of product feedback. The developers get to receive insights on what’s working & what’s not working. Token-holders suggest product improvements & new features. This results in iterative product development & consistent growth. All these are guaranteed mostly when you provide proper rewards & incentives.

• Increased Project Visibility

  Incentives transform Token-holders into powerful ambassadors in promoting your Web3 project. Token-holders help with social media promotions. This results in community-driven marketing & can be very helpful to onboard new users. You will find increased project visibility.

Here’s an alert! Sometimes incentivization also means attracting participants who are primarily motivated by rewards rather than genuine interest in the community, which can lead to superficial engagement. Additionally, there’s a risk of incentive abuse, such as exploiting rewards without meaningful contribution.

Also, make sure your incentives align with community goals. If you want everyone in the community feel valued, you can go for exclusive access to content. If you want to reward few best token-holders, you can incentivize through Airdrop grants.

Let’s move on to find type of token-holder incentives.

Types Of Token Holder Incentives

Let us move on to learn about the different types of Token-holder incentives.

• Staking Rewards

  Verifying & validating transactions on BlockChain is an important activity that contributes to network stability. Community members receive staking rewards in the form of additional tokens, usually provided as a compensation for validating transactions.

• Exclusive Benefits

  Exclusive incentives are provided in the form of access to product features, educational content & project events. Token holders get to receive early access to new products. This type of reward makes token-holders feel valued & engaged.

• Airdrop Grants

  Airdrop Grants are free distributions of new tokens to community members for their act of favor. The favor can be a simple promotion of a project on social media or attending a project event. Airdrop tokens are also distributed for completing surveys.

How BlockSurvey improves Community Engagement?

When you look at distributing Surveys created through BlockSurvey as a means of Engagement, then BlockSurvey provides many reasons for improving community engagement. Below are few reasons.

• Intuitive Survey Interface provides an intuitive & easy-to-use interface for driving higher participation.
• Anonymous Seal feature of BlockSurvey helps you get open & honest feedback
• Token-gated surveys ensure that your surveys are taken only by Token Holders, thus improving the quality of engagement.
• Social Media Gated Surveys, similar to Token-Gated Surveys help earn Qualified Respondents for your surveys.

Most importantly, ensure to incentivize survey participation, for improved Token-holder engagement.

Conclusion

Token-holder Incentives are not just nice to have but it is a major strategic move that causes a win-win scenario & drives innovation.

BlockSurvey is a prime tool to engage with your Token-holders. BlockSurvey helps gather feedback & insights in a controlled and consistent manner.

BlockSurvey is Secure, Anonymous, Intuitive, AI-driven, Token-Gated, & Social Media Gated.

Give BlockSurvey a try today and start building your Token-holder community. And finally, do not forget to incentivize your survey participants.