📊 Tokenomics Impact

Launching on Trenches creates unique dynamics for your token. Understand the economic impact before you apply.

Important: Every token is different. These are general principles — consult with your tokenomics advisor for your specific situation.

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Overview: How Trenches Affects Your Token

The Basic Flow

1. User sprays USD into your trench
2. 90% buys your token from reserve (immediate buy pressure)
3. User holds position for 1-30 days (locked, can't sell)
4. Position matures, user receives 1.5x payout in your token
5. User can hold or sell (potential sell pressure)

Net Effect: Immediate buy pressure → Temporary supply lock → Gradual distribution

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Holder Acquisition

Quantity vs. Quality

Expected Holder Growth

Conservative Estimates (based on platform averages):

Key Factors:

• Trench type (RAPID = faster turnover, DEEP = fewer larger holders)
• Project marketing amplification
• Token performance during feature
• Overall market conditions

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Buy Pressure Analysis

Immediate Impact

Every spray creates instant buy pressure:

User sprays: $1,000
→ $900 buys your token immediately
→ $100 to stability buffer

Unlike Airdrops:

• Airdrops = free tokens = immediate sell pressure
• Trenches = purchased tokens = buy pressure + delayed distribution

Cumulative Effect

With sustained activity:

90% of spray volume buys your token

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Sell Pressure Analysis

The 1.5x Payout Dynamic

Users receive 1.5x their spray amount at maturity:

User sprayed: $1,000
User receives: $1,500 worth of your token
Potential sell: $1,500 (if they sell 100%)

This creates sell pressure, but:

1. Time-Delayed: Spread over 1-30 days (not immediate)

2. Gradual: Only mature positions can sell

3. Diluted: Spread across many holders

4. Offset: New sprays create new buy pressure

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Sell Pressure Scenarios

#### Scenario A: All Holders Sell 100% at Maturity (Worst Case)

Week 1: $10,000 sprayed → $9,000 bought your token
Week 2: Mature positions sell $15,000 worth
Net: -$6,000 sell pressure (worst case)

Reality Check:

• 100% immediate sell rate is extremely rare
• Many holders continue holding
• New sprays offset maturing positions

#### Scenario B: Realistic Retention (60% hold, 40% sell)

Week 1: $10,000 sprayed → $9,000 buy pressure
Week 2: Mature positions, 40% sell $6,000 worth
Net: +$3,000 buy pressure (realistic)

Platform Data:

• 60-75% of Trenches holders retain tokens past maturity
• Sell pressure is gradual, not a spike
• Net effect is typically buy-positive

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Managing Sell Pressure

Strategies to minimize sell impact:

1. Community Building

- Engage holders in your Discord/Telegram

- Share project updates during commitment period

- Build emotional investment beyond yield

2. Utility Creation

- Give holders reasons to keep tokens (staking, governance)

- Announce new features during their lock period

- Create holder-exclusive benefits

3. Staggered Trench Strategy

- Use RAPID (1-day) for initial testing

- Scale to MID (7-day) and DEEP (30-day)

- Creates staggered maturity dates

4. Trenches + Other Initiatives

- Combine with staking rewards

- Pair with product launches

- Time with exchange listings

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Price Impact Modeling

Factors Affecting Price

Price Floor Considerations

Trenches can create a price floor because:

1. Reserve backs buying: Your reserve guarantees buy pressure

2. Locked supply: Held positions can't sell

3. Ongoing demand: New users = new buy pressure

But remember:

• Price floor =/= price pump
• Other market forces still apply
• Broader market conditions matter

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Token Velocity & Circulating Supply

Velocity Impact

Token Velocity = How quickly tokens change hands

Lower velocity = Better for price stability

Circulating Supply Changes

Trenches adds to circulating supply gradually:

Month 1: 100,000 tokens distributed to holders
Month 2: Additional 150,000 tokens (matured positions)
Month 3: Additional 200,000 tokens
...

Unlike:

• Airdrops: Sudden supply increase
• Vesting cliffs: Sudden unlock events

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Comparison to Alternatives

Trenches vs. Airdrops

Trenches vs. Traditional Launchpads

Trenches vs. Pump.fun

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Calculating Customer Acquisition Cost (CAC)

Trenches CAC Formula

Total Reserve Deployed: $50,000
50% Revenue Share: $25,000 to platform
Net Cost: $25,000

Holders Acquired: 80
CAC per Holder: $25,000 / 80 = $312.50

Comparison to Alternatives

Trenches holders are typically higher quality — more engaged, longer retention, active community participants.

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Risk Scenarios

Scenario 1: Token Price Drops During Feature

If your token drops 50% while featured:

• Reserve value drops 50%
• May need to top up reserve
• Payouts still occur (your obligation)
• User receives 1.5x USD value at spray time

Mitigation:

• Price reserves in USD terms
• Monitor reserve health
• Be prepared to top up

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Scenario 2: Mass Exit at Maturity

If 80%+ of holders sell immediately at maturity:

• Significant sell pressure
• Price may drop
• New sprays buy the dip
• Creates volatility

Mitigation:

• Strong community building
• Ongoing utility/reasons to hold
• Multiple trench types (staggered maturities)
• Combine with staking incentives

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Scenario 3: Feature Ends Suddenly

If you need to end campaign early:

• Withdraw remaining reserve (5-7 days)
• Ongoing positions still pay out
• User experience preserved
• No penalty

Mitigation:

• Plan reserve size for expected duration
• Monitor and top up proactively
• Communicate with community

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Best Practices for Tokenomics

Before Launching

1. Model Different Scenarios

- Best case (high retention)

- Worst case (mass selling)

- Base case (platform averages)

2. Ensure DEX Liquidity

- Payouts need liquidity to execute

- Low liquidity = high slippage

- Recommend: $100K+ pool minimum

3. Plan Complementary Initiatives

- Staking program

- Governance launch

- Product releases

- Exchange listings

During Feature

1. Monitor Reserve Health

- Track USD value (not just token count)

- Top up before critical levels

- Use custom stats API

2. Engage Your Community

- Welcome Trenches holders

- Share updates during their commitment

- Build relationships

3. Track Metrics

- Holder count growth

- Retention rates

- Price correlation

- Engagement levels

After Rotation

1. Analyze Results

- CAC per holder

- Retention rates

- Price impact

- Community growth

2. Decide Next Steps

- Replenish and continue?

- Expand to other trenches?

- Focus on other channels?

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Real Case Studies

Case Study: BLT Token

Launch Details:

• Type: Premarket
• Reserve: $50,000
• Trench: MID (7-day)
• Duration: 3 months

Results:

• Holders Acquired: 180
• Retention (30d): 72%
• Price Change: +45% during feature
• Community Growth: +2,000 Discord members

Key Success Factors:

• Strong pre-launch community
• Regular AMAs during commitment periods
• Staking announcement during feature
• Active ambassador content

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Case Study: XYZ Protocol

Launch Details:

• Type: Live (oracle pricing)
• Reserve: $30,000
• Trench: RAPID (1-day)
• Duration: 2 months

Results:

• Holders Acquired: 95
• Retention (30d): 58%
• Price Change: -8% (market down 15%)
• Relative Performance: Outperformed market

Key Learning:

• Short commitment period = faster turnover
• Need strong reasons to hold post-maturity
• Consider longer trenches for better retention

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FAQ

Q: Will Trenches pump my token price?

A: Not guaranteed. Trenches creates buy pressure, but price depends on many factors including market conditions, project fundamentals, and holder behavior.

Q: What's the minimum liquidity I need on DEXs?

A: Recommend at least $100K in liquidity pools to handle payouts without excessive slippage.

Q: Can I control when payouts happen to manage sell pressure?

A: Payouts are automatic based on commitment periods. You can influence timing by choosing trench types (RAPID = daily, DEEP = monthly maturities).

Q: What if my token price drops 50% during the feature?

A: You may need to top up your reserve. Payout obligations are based on USD value at spray time.

Q: How does Trenches compare to paying influencers?

A: $20K in Trenches typically yields 40-80 quality holders. $20K in influencer marketing might yield 200-400 lower-quality holders. Trenches holders have higher retention.

Q: Can I use Trenches with other marketing simultaneously?

A: Yes, and it often works better. Combine Trenches with staking launches, product releases, or exchange listings for synergistic effects.

Q: What's a realistic retention rate?

A: Platform average is 60-75% still holding 30 days post-maturity. Strong projects see 80%+.

Q: Should I start with RAPID, MID, or DEEP?

A: Most projects start with MID for balance. RAPID for testing, DEEP for maximum holder quality.

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Calculators & Tools

Estimating Your Results

Use these conservative estimates:

Reserve Size: $_____
Expected Holders: Reserve / $500 (conservative)
Expected CAC: Reserve × 0.5 / Expected Holders
Expected Retention: 60%

Example:

Reserve: $50,000
Expected Holders: 100
CAC: $250 per holder
Expected Long-term Holders: 60

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Getting Help

Tokenomics questions? Contact our founder:

• Twitter: @spraytrenches
• Telegram: @playtrenches
• Discord: discord.gg/MQeZDKZWC9

Ready to launch? Apply now →

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Last updated: February 2025. Market conditions and results may vary.