Key takeaways
How to Launch a Token: Post-Launch
Editor's note: "What do I need to know to launch a token?" is one of the most common questions we get from crypto founders, especially given the industry's dynamic regulatory landscape. To ensure compliance, security, and long-term success for your project, it's crucial to approach token launches from proper principles, especially during "hot" market periods.
In this series, we break down the token launch process into 3 distinct phases: (1) pre-launch, (2) preparing for launch (the lead-up to the token generation event, aka TGE), and (3) post-launch. We aim to provide founders a comprehensive, tactical resource at every stage of the token launch process. For more in-depth information on topics like specific types of token grants, allocations, and 83(b) elections, visit our resources.
The work doesn’t stop after you launch your token!
In this final post of your “How to Launch a Token” guide, we’ll discuss 6 crucial steps and considerations for the post-launch phase, in order to ensure that your project continues to grow and thrive.
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- Token tax planning for employees
- Off-ramp planning
- Prepare for your first cliff / unlock event
- Handle staking, governance, and prepare for initial distribution
- Plan for ongoing employee RTU programs
- Plan for ongoing domestic and international hires
#1 — Token tax planning for employees
After you launch your token, it’s imperative that you help your employees properly plan for their taxes to avoid any future legal or financial complications.
The timing of your token tax calculations will depend on your token agreement type (RTUs, RTAs, Token Options, etc) and your jurisdiction. Laws will vary between common operating places like the US, UK, Canada, Switzerland, and other countries.
For your employees claiming their tokens, it’s crucial to understand the specific tax rules in their jurisdiction. (Ex: Germany institutes a one year holding period for personal capital gains).
More resources: for a deep dive into all things related to token tax withholding, check out this article from our resources. We also provide access to a network of tax and accounting partners who are ready to help both your company and your team.
#2 — Off-ramp planning
When thinking about off-ramping tokens, it's important to set expectations for your team:
- Establish clear insider trading rules
- Communicate selling windows
- Process for selling insider tokens
Consider implementing something similar to a Rule 10b5-1 trading plan (often referred to as a 10b5-1 plan) to establish rules and processes to protect against insider trading violations.
Selling tokens, typically in bulk for large token unlock events (ex. sell-to-cover tax obligations) or sell-off events, may also require coordination with a market maker or OTC trading desk to execute the sale.
This practice will also help you manage the visibility and privacy of large sales transactions to reduce the impact on public liquidity (e.g., DEX liquidity pools).
#3 — Prepare for your first cliff / unlock
As you approach the first “cliff” or unlock period, it's essential to put a plan in place to manage the sale of bulk tokens (as described above).
Engage with market makers/OTC sales to manage the bulk sale of tokens.
Additionally, train your employees on how to receive tokens, use wallets, record transactions for tax purposes, and hold/use the tokens responsibly.
#4 — Handle staking, governance, and prepare for initial distribution
Prepare for your initial distribution with the following checks:
- Payroll integration checks (Liquifi integrates with Remote, Rippling, Anchorage, SAFE, Fireblocks, and more)
- Custody integration checks
- Tax withholding checks
Additionally, consider enabling staking or governance voting as a means of further incentivizing stakeholders to hold your token long-term.
If your token has additional functionalities, like staking or governance, consider training your employees and investors on how to engage in these activities. A great Loom tutorial or Lunch & Learn for your team goes a long way!
Liquifi provides template tutorials for our customers to customize and share with their teams. These tutorials cover common practices in this arena, from Ledgers to SAFEs.
#5 — Plan for ongoing employee RTU programs
Ongoing employee RTU (Restricted Token Unit) programs are a great way to keep your team motivated and aligned with your project's long-term goals.
❗ Important: projects typically structure their RTU programs based on incentives, performance, or a combination of both.
As you spin up ongoing employee RTU programs, you’ll want to explore how these programs may affect your hiring plans.
Consider also whether you’ll include them in part of your overall compensation package, or whether the program will be tied to a performance review, as part of a refresher grant.
For a more detailed breakdown here, refer to our article: “A Comprehensive Guide to Token Compensation.”
#6 — Plan for ongoing domestic and international hires
As your project grows post-TGE, you’ll likely need to hire additional talent—both domestically and internationally.
As you do, it’s important to be aware of the restrictions and rules in different regions, including the US, Europe, Asia, and others.
Some countries impose specific hiring requirements (these might vary between FTEs and contractors), like the need for a local hiring entity or limitations on the duration of token programs.
For example:
- Canada may not allow token programs without a Canadian local entity. Even then, the programs may be limited to a maximum of three years.
- Countries like China and India may not allow token programs at all or they may impose high taxes that make these programs impractical.
When hiring employees or contractors for token-related work, remember that your contracting entity may affect which jurisdiction's rules apply.
For your employees, there may also be minimum wage requirements that your company will need to meet—even when you’re compensating employees with tokens.
Liquifi recently partnered with Deel, in order to offer all-in-one, global Liquifi EOR and tax withholding services tailored specifically for crypto companies.
Conclusion
Addressing these 6 post-launch considerations—and maintaining a generally proactive approach—will put your company in a strong position to navigate the challenges that arise post-TGE, as your project evolves.
The key to long-term success is always to stay informed and adaptable, making every strategic decision in line with the ultimate mission of your project.
Visit our website to learn more about the clients we serve, and how we can help you navigate the entire token launch process. Or book a call to chat with our sales team!
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