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Token Narratives Matter First

By: Lauren Tierney

Finding Narrative Market Fit.

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Rooted in the essence of decentralization, tokens represent not only tangible assets but also intangible interests, ushering in a new era of economic possibilities. This paper delves into the realm of "token narratives," exploring the multifaceted dimensions through which crypto tokens unfold their narratives representing their ownership, value, and utility, as instruments of investment, stores of value, and mediums for transactions.

As we embark on this journey, we unravel the narratives that these tokens carry, shaping the future of finance and technology.

Mainstream Token Narratives

Web3 and crypto are often associated with “cryptocurrencies,” digital code that secures value and enables digital transactions. Popular “cryptocurrencies” are often associated with Bitcoin, Ethereum, and even a category of meme coins such as “Dogecoin.”

Still, token use cases run far beyond these well-known coins and are not just tied to these traditional crypto narratives of speculative buying and selling for returns.

Tokens have a broad range of use cases, and their broad adoption can be tied to the narrative behind each token. The token's leaders, alongside the community, align around a common token narrative and evangelize that narrative to the broader world.

How should we think of a token? Technically speaking, a token is a digital representation of a digital or physical asset stored on a blockchain. Many different technical standards align the web3 communities on various forms of tokens, however he mainstream token holder likely cares about said token because its narrative resonates with them.

What’s a token narrative?

A token’s narrative is the common story that aligns a token’s stakeholders and compels these stakeholders to own and improve said token ecosystem. In a simple framework token narratives can be evaluated across three key aspects: the vision, the values and the identity of a token ecosystem.

Vision entails a vivid portrayal of the coveted future state that the company aspires to achieve. A potent vision can ignite the community's imagination, vividly illustrating the forthcoming achievements and sensations of triumph.

Values constitute a collective framework of guiding principles, beliefs, and conduct norms shared by the token's stakeholders.

Identity signifies the demographic profile of individuals who resonate harmoniously with the envisioned future. This encompasses details such as geographical location, spending habits, lifestyle choices, and economic circumstances. Essentially, it delineates the primary target audience for the token's endeavors.

In this piece, we will unpack the power of token narratives and how finding “narrative-market-fit” is largely tied to the “adoption” of a token, using three very different value propositions.

Top of Mind

• NFTs are making a significant impact on various industries like gaming and luxury fashion, which have embraced digital assets more extensively due to their focus on high-value customers. Read more of Paul Hsu’s thoughts on this here.

• Evaluating business narratives is essential in venture capital, and three critical questions guide this process. Check out venture investor, Lauren Tierney’s, thoughts here.

• The Stanford Blockchain Conference took place in Palo Alto this weekend, with venture investor Danny Pantuso in attendance. Discover his key takeaways from the conference here.

• As summer comes to an end, marketing manager, Grace Casey reflects on her experience leading the charge on the execution of Web3 Investor Day here.

Where to Find Us  

• Paul Hsu sat down with The Wall Street Journal, delving into the international internet landscape through web3. LinkedIn post here and full article here (paywalled).

• Lauren Tierney chatted with reporter, Nat Rubio-Licht at The Daily Upside on Pinterest’s new patent submission, for a system for “context-based advertisement prediction.” LinkedIn post here and full article here.

• Video replays of the session recordings on Web3 Investor day are now live! Head to our LinkedIn or Youtube to watch.

Thanks for reading!

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Are you or someone you know building in crypto or web3? Get in touch with the investment team here.

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