The purpose of this case study is to showcase the collaboration between Chainforce – Tokenomics Consultancy and the Galileo project. It highlights the pivotal role Chainforce’s advanced tokenomics expertise played in propelling Galileo’s project forward. This was achieved by resolving the challenges encountered within its tokenomics framework.
Introduction of Chainforce – Tokenomics Consultancy
Chainforce has successfully guided over 80 tokenomics projects, achieving a cumulative market capitalization exceeding $185 million.
This wealth of experience uniquely positions the firm to specialize in developing customized token strategies. It also allows to create proven token models tailored to the needs of the projects we advise.
As a tokenomics consulting firm based in the EU, Chainforce – Tokenomics Consultancy works closely with Founders and Venture Capitalists in the DeFi, GameFi, and Web3 sectors. The firm is dedicated to constructing and launching tokenized ventures that are sustainable and grounded in a proven methodology. Chainforce leverages the latest innovations, adopting a data-driven approach and with best practices from the industry and our clients.
Mission of Chainforce – Tokenomics Consultancy
Helping Founders & VCs build the sustainable token economy through data-driven methodology
Vision of Chainforce – Tokenomics Consultancy
Adoption and usage of blockchain technology driven through tokenization will create a future that is more transparent, efficient, and with more fair ownership. Chainforce has refined its proprietary methodologies and frameworks over the past three years. This enables us to conduct comprehensive industry research, token analysis, and strategy evaluations. It also allows us to design effective ecosystem architectures. This methodical approach allows Chainforce to achieve exceptional accuracy in value engineering and simulations. It also aids in forecasting supply-demand dynamics and token pricing. The team at Chainforce is composed of experts who integrate consulting services, proprietary data, and advanced software. We deliver state-of-the-art tokenomics solutions.
The Chainforce team is committed to supporting its clients throughout the entire lifecycle of blockchain tokens, from inception to maturity, guiding them towards achieving lasting success in the token economy.
Want to know more about us and our methodology ? Check out our section : Chainforce – Tokenomics Consultancy Methodology
Introduction of Galileo project
Categories: Platform for RWA Tokenization
The Galileo Protocol is a revolutionary tokenization platform operating on the Ethereum blockchain. It specializes in converting luxury physical goods into authenticated digital assets. This reshapes the luxury e-commerce experience.
They are at the forefront of revolutionizing luxury asset tokenization and ownership with their direct and efficient approach. This allows for asset transfer from anywhere in the physical and online world, without intermediaries, complex systems, or switching between multiple chains.
The Galileo Protocol goes beyond conventional methods of asset transfer and sets a new standard in the industry. They use physical non-fungible tokens (pNFTs). It serves as proof of ownership and authenticity of physical assets. They proudly announce the launch of the world’s first physical NFT (pNFT) by DEFMIK.
They excel in interoperability, operating seamlessly across multiple blockchain and Distributed Ledger Technologies (DLTs). Through a strategic partnership with Quant Overledger, Galileo has enhanced its capabilities by facilitating the creation of QRC-721 pNFTs, which are deployable on Ethereum, Polygon, and XDC networks. Additionally, Galileo is at the forefront of innovation in the blockchain field. With LEOX, their native token, Galileo has become the first QRC-20 project to be listed on an exchange.
Galileo’s challenges and initial request
Chainforce, as a tokenomics consulting firm, engages with projects that lack a tokenomics framework. We also work with projects that have an established tokenomics, including those that have already launched. Chainforce adeptly tailors its methodology to meet the unique needs and stages of its clients’ projects. Consequently, Chainforce is equipped to assist with existing projects facing challenging market conditions, fundraising issues, or outdated tokenomics. This can be due to initial launch strategies or a tokenomics not aligned with the project’s ambitions and objectives. Furthermore, Chainforce can address issues related to low adoption rates in projects.
Galileo Protocol is one of those projects already launched in the market but facing some challenges after its launch, which therefore sought the expertise of Chainforce.
As demonstrated in the preceding section, the Galileo Protocol exhibits potential and promising features. However, during its development and launch, Galileo encountered several challenges. They approached Chainforce to overcome these obstacles and implement their innovative solution.
Galileo brought to Chainforce’s attention the following issues.
Fundraising Challenges
“Our fundraising ended about 3 weeks ago, and unfortunately, we did not sell all the tokens initially intended for the public (33.5% reserved for the public initially)” – Galileo’s team.
Before approaching Chainforce, the Galileo Protocol had completed its fundraising phase, but the results did not meet expectations. Only 2.8 million tokens were sold to the public out of the 67 million tokens initially allocated for public sale. This represented 33.5% of the total supply.
Galileo indicated that they conducted several investment rounds:
- First investment round: 1 million tokens were sold at $0.006 each.
- Second round: In the OTC (Over-The-Counter) sale, 367,399.8 LEOX tokens from the ecosystem treasury allocation were sold at $0.15 each.
- Third round: Multiple investment rounds took place through the centralized and regulated LCX exchange. The seed round performed well, but the private 1 and private 2 rounds saw minimal sales.
- Fourth Round: In the public sale, only 2.8 million out of the 67 million tokens were sold. Despite achieving a relatively successful public sale considering the market conditions at the time, Galileo fell far short of its initial plans.
In assessing their situation, Galileo states that they have raised sufficient funds to support the project development in 2023. However, it is crucial for them to sell additional tokens from the strategic development treasury to adequately finance their development operations. Additionally, beyond the financial aspects of the fundraising, one of Galileo’s issues with these results is their desire to avoid a situation where the public holds only 5 to 10% of the tokens, with the remaining allocations comprising 90 to 95%.
Seeking industry experts to build a more sustainable and robust token model
“We are looking to find a repurposed model of tokenomics.” – Galileo’s team.
Due to issues encountered with their public token sales, Galileo’s token allocation was significantly impacted. They have identified the necessity to adapt their tokenomics. A primary concern for Galileo is ensuring that the public does not end up with merely 5 to 10% of the tokens, diverging from the initial plan of 33.5%, while other allocations could potentially account for 90 to 95%, resulting in the team holding two to four times more than all public tokens combined.
“We wanted, from the beginning, to offer fair and interesting tokenomics, both for the community, but also attractive for new investors. Our goal, and what we have publicly stated to our community, is to keep tokenomics fair, and corresponding, as much as possible, to the distribution foreseen in the initial tokenomics. It is on the basis of these tokenomics that the investors have invested, so we find it normal to get as close as possible to this distribution.” – Galileo’s team.
The revised model must align closely with their original tokenomics while remaining appealing to both current and future investors.
Galileo seeks Chainforce’s expertise to address the challenges with their current tokenomics model, which has become problematic due to the fundraising difficulties outlined in the previous paragraph. They aim to maintain a model as close as possible to the original, ensuring that certain elements remain unchanged. This is to uphold the project’s philosophy and the initial proposition announced to stakeholders, as well as recognizing that some aspects cannot be modified due to the project’s advancement.
Expert advice to deploy a more successful tokenomics model
Galileo’s team has indicated that there are fundamental elements of their tokenomics model that must remain unchanged. They prefer to keep these elements as initially planned.
Fixed token price
The token prices established for investors are non-negotiable. Indeed, LCX has already configured their backend systems with these prices, and numerous SAFT (Simple Agreement for Future Tokens) contracts have been signed at these rates: $0.10 for seed rounds, $0.15 for private sale 1, $0.20 for private sale 2, and $0.25 for the public sale.
Reserving tokens for a new category
Galileo proposes the creation of a new category, allocating a small percentage of tokens (3 to 5% of the total supply from 2024) for future venture capital (VC) deals and over-the-counter (OTC) sales. These tokens should be subject to significant vesting and lockup periods to assure current and future investors. Additionally, these tokens should be offered to VCs and for future OTC sales at an attractive discount, anticipated to be 20-30% off the future listing price.
Controlling allocation for early and seed rounds
A challenge has emerged regarding the allocation for early and seed rounds. Currently, they possess 1.7 million tokens, while the original tokenomics envisioned allocating 5% of the total supply to these groups. Galileo is committed to maintaining this proportion as closely as possible. Additionally, they are cautious about ensuring that the “power” or share of tokens held by early and seed investors remains limited in comparison to the future total supply.
Maintaining a 200 Million total supply
Galileo has informed Chainforce of their scheduled meeting with Quant Network to deploy the token on the mainnet. The initial planned supply of 38.1 million tokens and the total supply of 200 million have been communicated and will be integrated into the smart contract accordingly. It is crucial to consider this in the revised tokenomics since altering these details could delay the token’s mainnet deployment. However, Galileo indicates the flexibility to burn tokens through the smart contract if necessary.
Faced with these challenges, Galileo turned to Chainforce to adapt their tokenomics. The project was at a crossroads, unclear on how to proceed and entangled in various complications.
Time constraint challenge
Chainforce must be agile and highly productive to develop new tokenomics within the tight timeline dictated by Galileo’s obligations and roadmap.
Galileo has highlighted critical timelines related to their project’s challenges:
“We have a scheduled meeting with Quant Network this Friday at 4pm to deploy the token on the mainnet.” – Galileo’s team.
“Our token listing is expected in approximately 2 weeks, on both the LCX exchange and the decentralized Uniswap exchange.” – Galileo’s team.
Following all this information, Chainforce has committed to delivering the project within 4 weeks.
Strategic solutions and implementation by Chainforce – Tokenomics Consultancy
With a tight deadline due to Galileo’s project already being in advanced stages and the impending deployment date for their token, Chainforce rapidly responded to their request. After a thorough analysis of Galileo’s project and its challenges, Chainforce promptly engaged with Galileo to propose a customized action plan tailored to their specific needs. This plan, structured over 4 weeks, allowed Chainforce to adapt its proven methodology that has been successful in numerous previous projects. Here is a brief summary of the action plan implemented by Chainforce, presented in chronological order.
First, Chainforce always engages in a stage of project initialisation and understanding. Engaging in deep conversations to understand the project’s vision, objectives, milestones, token utility, and ecosystem dynamics. This foundational understanding is vital for accurately modeling the project’s ecosystem, utility, and incentives and assessing its sustainability.
Project initialisation and understanding
Chainforce swiftly initiated discussions with Galileo. These initial interactions enabled Chainforce to assess the situation. Then we offered preliminary insights based on our expertise and experience. This also helped them gain a deeper understanding of the situation and identify the specific areas that required improvement.
The purpose of Chainforce – Tokenomics Consultancy is mainly to seek clarity on certain ambiguous elements to envision various scenarios that could be applied to establish a new tokenomics model.
This first part, driven by several interactions between Chainforce and Galileo by several appointments,rovides Chainforce with all the necessary information to start investigating in the right direction towards the objectives and ambitions of the project.
Benchmarking
After a phase of exchanging information and analyzing objectives, Chainforce continues to deploy its methodology. This involves conducting a benchmarking phase.
During benchmarking, we use our proprietary database alongside external research to analyze similar projects and their tokenomics. By combining our extensive industry knowledge with comprehensive data, we evaluate the token economy, performance, allocations, token vesting, governance models, incentives, and value capture mechanisms.
By learning from past projects and creating a reference frame we enable ourselves to identify best practices, understand what has worked and what not, and provide tailored recommendations to optimize your tokenomics setup to increase chances of success and lower any risks.
Our knowledge base consists of 250+ projects that had a successful token offerings.
Formulation token strategy and economy design
After collecting market data and understanding Galileo’s needs, Chainforce moved forward. We proceeded to the next step of formulating a token strategy and economy design.
In this stage we provide comprehensive guidance on developing a robust token strategy, encompassing the design of a sustainable and efficient ecosystem. Leveraging our extensive industry experience, we provide consultancy on real-world best practices and potential pitfalls, helping you navigate the complex token economy landscape.
Now that all these preliminary steps have been completed, we are able to establish a new tokenomics model to address the initial project issues and those identified during the discussions.
Token Economics
Chainforce – Tokenomics Consultancy embarked on the last and most essential phase in response to Galileo’s request. This phase focused on revising their tokenomics model to better align with their ambitions and objectives.
During this stage, Chainforce concentrated on refining the token offering, tailoring it to the market data and the project’s specific requirements.
Efforts were also directed towards adjusting the fundraising needs to suit the prevailing market conditions and leveraging relevant market data.
Following these adjustments, Chainforce enhanced its market capitalization. We also adjusted the fully diluted valuations (FDV) for each round to reflect the current market environment. The modifications involved revising their average token price and relative discount.
Results and added value for Galileo
Having a strong tokenomics framework alone may not guarantee a project’s success, yet weak tokenomics can certainly doom it. The Galileo Protocol is a well-functioning and promising project, and has seen significant benefits from resolving its tokenomics issues, leading to a successful token and economic model.
As stated by Pierre Beunardeau, the CEO of the Galileo Protocol, Chainforce’s deep insights and strategic thinking have significantly enhanced their token model, ensuring robust economic foundations for the project. The expertise provided by Chainforce has greatly optimized their token distribution, fostering stability and long-term growth.
For an overview of the evolution of their token, $LEOX, all relevant information can be found on CoinMarketCap.
Client Testimonial
Vincent has been an exceptional asset as our tokenomics expert at Chainforce. His deep insights and strategic thinking significantly enhanced our token model, ensuring robust economic foundations for our project. Chainforce’s expertise was evident in the way they optimised our token distribution, fostering stability and long-term growth. Beyond their technical skills, responsiveness and dedication were truly commendable, always providing timely and insightful solutions to our challenges. We highly recommend Chainforce to anyone needing expert guidance in tokenomics or blockchain integration – their contribution has been a game-changer for us.
Pierre Beunardeau
GALILEO PROTOCOL – CEO
Feel free to contact one of our experts to discuss your project. Book a free consultation now: https://chainforce.tech/schedule-introduction/
