Avalanche Foundation: Eligibility Criteria Framework for Community Coins

Avalanche

The Avalanche Foundation aims, among other things, to make the use of the Avalanche blockchain synonymous with creativity, culture, and lifestyle. The Foundation realizes the importance of fostering and supporting community initiatives on the Avalanche blockchain network.

In particular, we note that meme coins generally have high community value because of the engagement, community spirit, and culture that they engender, which goes beyond the humor and virality that they embody. The Foundation embraces the full spectrum of creativity, culture, and camaraderie in the blockchain space, and broadly views meme coins, NFTs, and similar tokens created by the community for culture and engagement as "community coins."

The Foundation has already started using its Culture Catalyst program to deploy capital into community coins, and will continue doing so within an established eligibility criteria framework. The Foundation is pleased to share the eligibility criteria that it has established for those community coins which the Foundation will consider supporting. As such, the eligibility criteria outline the bare minimum characteristics that a community coin should possess in order to be taken into consideration. Meeting the eligibility criteria does not imply that the Foundation will support a coin. The Foundation will use additional criteria in order to select and support coins. The purpose of disclosing the eligibility criteria here is to enunciate the Foundation’s values and provide direction to the community. And it goes without saying that the Foundation reserves the right to determine which coins to include in the Culture Catalyst program in its sole discretion and to alter these eligibility criteria as it sees fit.

Eligibility Criteria for Community Coins

The eligibility criteria are designed to identify community coin projects that show stability, growth potential, and a commitment to fair practices in the crypto world.

1. Fairly Launched: In order to ensure an equitable and egalitarian start, community coins should be launched using the following mechanisms.

Ownership of the community token contract was renounced.
Initial liquidity burned or adequately locked.
Initial whale protection measures, such as a purchase limit per address, were employed.
No allocation reserved for the team.

2. Snipe Bot Resistant: To mitigate the risk of snipe bots during launch, we encourage community coin developers to implement precautionary measures by providing either a head start or whitelist opportunities to genuine community members. Such measures may include whitelisting those who:

Hold a recognized Avalanche NFT;
Own an Avvy domain (.avax);
Have recent interactions with popular Avalanche dApps;
Have recent activity on Avalanche Subnets;
Hold a fair amount of AVAX; and
Fulfill additional criteria that the Foundation may find applicable and relevant.

Such a commitment from community token developers ensures the start of a fair ecosystem. Moreover, it serves as an incentive for users to participate in various Avalanche ecosystem dApps actively. The Foundation may take these factors into account during the selection process.

3. Secure: Community coins should embody best practices at every step of the development process:

Contracts must be verified.
Audits, whether by professionals, the community itself, or through the use of time-tested and widely accepted contracts, ought to have been performed by the team.
The contract creator’s address should have gone through community due diligence.
Automated tools such as DexScreener should be employed, and need to report no issues.

4. High Holder Count: For a coin to be considered a community coin, it needs to be widely held by a large number of users.

5. Low Concentration: Whales should not possess large chunks of the coin supply.‍

6. Broad Liquidity Provisioning: In order to ensure that there is liquidity around the coin so token holders can enter and exit coins easily, community coins should employ measures like locked liquidity pools and transparent liquidity management at launch.‍

7. High Liquidity: In order to ensure high liquidity, community coins should focus on a large initial liquidity pool and offer incentives for liquidity providers (LPs).

8. Minimum Lifespan: The coin should have been in existence for a minimum period of time in order to give the community time to get to know and understand the coin.‍

9. Minimum Market Cap: Community coins should maintain a strong market presence, as indicated by a substantial sustained market cap, backed by robust community involvement.‍

10. Daily Trading Volume: The project should be receiving active interest from the community, as evidenced by metrics such as daily transaction volume from diverse numbers of account holders.

11. Native To Avalanche: The community token should natively exist only within the Avalanche ecosystem.

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As of March 14, 2024, the concrete numbers that the Foundation is using for these criteria look as follows:

Holder Count: The community coin should have at least 2,000 unique holders.

Concentration: The top 100 token holders (excluding centralized exchanges) should own less than 60% of the total supply.

Liquidity: The project should have total liquidity of at least $200,000 or equivalent.

Liquidity Providers: The project should have 50 or more liquidity providers unless the majority of the liquidity has been renounced or burned.

Lifespan: The project should be in existence for at least one week.

Market Cap: The fully diluted market capitalization of the project should be $1 million or greater.

Daily Trading Volume: The project should average a daily trading volume of at least $100,000 on Avalanche ecosystem DEXes for at least two weeks.

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The Foundation’s efforts to support community coins are performed on an ongoing basis. This enables newly emerging coins to potentially participate in the program as soon as they meet the minimum eligibility criteria.

We are excited about this initiative, as it celebrates the unique culture within the crypto space and fosters a more inclusive and diverse ecosystem. We look forward to building and strengthening the Avalanche community.

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About Avalanche

Avalanche is a smart contracts platform that scales infinitely and regularly finalizes transactions in less than one second. Its novel consensus protocol, Subnet infrastructure, and HyperSDK toolkit enable Web3 developers to easily launch powerful, custom blockchain solutions. Build anything you want, any way you want, on the eco-friendly blockchain designed for Web3 devs.