Author: panadol girl, Crypto KOL
Compiled by: Felix, PANews
If you are a project founder who wants to upgrade or migrate your old token; merge it with another token to give it a "second life" and revamp the token economics and utility, then this article may be helpful to you.
Some may argue that projects only have one chance to launch a token, but the reality is that markets and narratives change, team strategies and visions change, and even community expectations change over time.
In this case, the token branding and market positioning may have to be updated to remain relevant, and the token utility will change accordingly. Founders and teams should have this choice, as long as it is reasonable, well thought out, and agreed to by the community.
This article takes an in-depth look at five token migration and consolidation cases to gain a more comprehensive understanding of key considerations, conversion mechanisms, timelines, price performance, and community reactions.
MC –> BEAM
RBN -> AEVO
AGIX, FET, OCEAN -> ASI
KLAY, FNSA -> PDT
OGV -> OGN
First, let’s summarize the main considerations:
1. MC -> BEAM
Merit Circle’s migration to Beam is probably one of the most successful and mature token migration cases. It is a great example of how a project can evolve as a blockchain, with clear and consistent community communication and proposal processes. Detailed timeline:
Why upgrade?
Better alignment between token branding and underlying network.
Enhance token utility.
Market positioning, brand recognition and strength.
Ability to quickly align the attention of internal and external parties to the new vision of BEAM.
Why not just do a token airdrop?
BEAM is designed to replace MC tokens, not co-exist.
Since MC tokens are constantly changing hands, it is difficult to conduct a fair and accurate airdrop.
Substantial costs (including transaction costs).
Price Impact
BEAM’s price rose by approximately 200% in the six weeks following the migration, indicating strong market support.
Since the migration began on October 26, 2023, the MC price has soared more than 3 times.
2. RBN -> AEVO
In the DeFi space, the merger of Ribbon Finance and Aevo is an interesting case that integrates an automatic staking mechanism into the merger process.
2 different products and 1 RBN token -> 1 unified product and 1 new AEVO token.
The timeline is as follows:
Why merge:
Solve the scalability problem of DeFi options. Ribbon is difficult to scale.
Product supply synergies.
Technical advantages of UI/UX: Aevo L2 rollup aims to provide users with solutions such as zero gas fees, reduced order delays, improved order processing capabilities, and active market makers.
Development Direction and Goals: The new AEVO token is based on a clear and evolving goal to become a high-performance derivatives trading platform with more products under one brand.
Staking mechanism:
The converted AEVO tokens have a 2-month lock-up period. AEVO tokens are converted to sAEVO (staked AEVO) and then locked --> to avoid immediate sell-offs that cause price fluctuations.
3. AGIX、FET、OCEAN -> ASI
One of the hottest merger cases this year was the merger of 3 high FDV AI tokens: Fetch.ai (AI agent), SingularityNET (R&D for AI development and integration), and Ocean Protocol (data sharing and monetization). When the news first appeared in March, the team immediately communicated with Singularity to understand the rationale and mechanism.
The key takeaway from this case study is their thinking on the exchange rate and why they did not apply any type of premium or discount to the token valuation.
Why merge:
Consolidate liquidity – Liquidity is expensive.
Create the largest independent player in AI research and development.
Exchange rate:
The exchange rate is based on the average price of the last 15 days before the announcement.
To reduce friction in valuation negotiations, the team simply values the tokens under the same market conditions without applying premiums/discounts based on liquidity/volume differences.
FET was chosen as the base token, so the ratio with ASI is 1:1.
You can find the two-stage merge process in progress by clicking on the link.
4. KLAY、FNSA -> PDT
The two largest tokens in South Korea also decided to merge this year, one backed by Kakao and the other by LINE, both of which are the largest messaging apps in South Korea. Their vision is to become the number one blockchain in Asia, leveraging their user base of more than 250 million wallets, more than 240 dapps and services.
The key point of this case study is the destruction mechanism, where:
22.9% of the total supply of new PDT tokens will be destroyed.
All non-circulating quantities will be destroyed.
Purpose: Reduce inflation and control supply.
They publish a very comprehensive document that explains the process and provides clear mathematical guidance.
5. OGV -> OGN
Purpose: Consolidate all of Origin’s product suite into a single governance and revenue token, OGN. Consolidate liquidity.
The lesson learned from this case study was the catalyst: the team realized that OGV seemed to be mispriced, with a much lower market cap/TVL ratio than other competitors.
Conclusion
Token migration or consolidation does not guarantee immediate and/or long-term positive price action. Therefore, please ensure that there is a strong reason and solid foundation for the migration/merger.
Token migration is not a one-time event. It’s just the beginning. Communication, transparency, and governance proposals should not stop here. This is also why the author believes that some cases are more successful than others.
Most of the migrations in these 5 cases are not yet complete, so there is still a lot to monitor to understand their overall product and ecosystem progress and token performance; and to determine whether “this is a successful migration/merger”.
Related reading: Super Artificial Intelligence Alliance ASI will be launched in late May, there is arbitrage space for the merger of three currencies, and the post-merger valuation is as high as US$7.5 billion
