A05 Token Design Workshop - Instructor Guide

Workshop Overview & Learning Goals

What Students Will Learn

Tokenomics fundamentals: Supply models, distribution, vesting, value capture
Incentive alignment: Balancing competing stakeholder interests
Economic thinking: Trade-offs, risks, gaming prevention
Communication: Defending design choices under criticism
Real-world application: Translating course concepts (agency, incentives) to practice

Why This Activity Works

Hands-on: Students design rather than just analyze
No right answers: Forces critical thinking about trade-offs
Peer feedback: Students learn from critiquing each other
Time pressure: Mimics real-world startup decision-making
Authentic scenarios: Project briefs are based on real crypto platforms

Pro Tip: This workshop works best AFTER covering lectures on incentive design, tokenomics basics, and smart contract mechanics. Students need foundational concepts to apply here.

Pre-Workshop Preparation

Materials to Print (Per Group)

1x Project Brief (randomly assigned or let groups choose)
1x Token Design Canvas
1x Pie Chart Template
1x Vesting Timeline Template

Materials to Have Available

Colored pencils or markers for charts
Calculators (for percentage math)
Scratch paper for brainstorming
Timer (visible to all groups)

Room Setup

Arrange desks in group clusters (3-4 students per group)
Reserve whiteboard/projector for presentations
Set up timer where all groups can see it

Timing is Critical: This is a 75-minute workshop. Stick to the schedule or presentations will be rushed. Use a visible timer and give 5-minute warnings.

Minute-by-Minute Facilitation Guide

Time	Phase	Your Role
0-5 min	Intro & Team Formation	• Explain workshop goals • Form groups of 3-4 (mix skill levels) • Distribute project briefs randomly • Give 2 minutes to read briefs
5-35 min	Design Phase	• Set timer for 30 minutes • Circulate between groups, answer questions • Don't give answers—ask probing questions • Watch for common mistakes (see below) • Give 10-min and 5-min warnings
35-40 min	Presentation Prep	• Groups assign presentation roles • Practice their 5-minute pitch • Finalize visuals (pie chart, timeline)
40-70 min	Presentations	• 5 minutes per group (strict timing) • Facilitate peer critique (1 min per group) • Add instructor critique focusing on: - What's strong - What could improve - Comparison to real projects
70-75 min	Wrap-Up & Reflection	• Highlight common themes/mistakes • Connect to course concepts • Q&A • Collect deliverables

Common Student Mistakes (What to Watch For)

🚩 Red Flag #1: Distribution Doesn't Add to 100%

Why it happens: Math errors, adding categories without adjusting others

What to say: "Double-check your percentages—are they exactly 100%? Use a calculator."

🚩 Red Flag #2: Team/Investors Get >50% Combined

Why it happens: Students don't realize this signals greed/centralization

What to say: "If you were a user, would you buy a token where insiders hold most of the supply? How does that affect trust?"

🚩 Red Flag #3: Governance-Only Utility

Why it happens: Students think governance = utility (it's not enough)

What to say: "Most token holders never vote. What else would make them want your token?"

🚩 Red Flag #4: Vague Vesting ("Over Time")

Why it happens: Students avoid specifics to sound flexible

What to say: "Investors need exact numbers. How many months? Is there a cliff? Be specific."

🚩 Red Flag #5: No Value Capture Mechanism

Why it happens: Students assume success = price goes up (not true without mechanism)

What to say: "If your platform makes $10M in revenue, how does that benefit token holders? Show the mechanism—burns, buybacks, staking, etc."

🚩 Red Flag #6: No Anti-Sybil/Gaming Measures

Why it happens: Students design for honest users, forget about attackers

What to say: "How would you game this system to earn free tokens? Now design against that attack."

Discussion Prompts & Critical Questions

Use These During Presentations

On Distribution:

"Why did you choose X% for the community? Is that enough to drive adoption?"
"Your team gets 25%—that's higher than average. How do you justify that?"
"What happens if the public sale doesn't sell out? Where do unsold tokens go?"
"Your investors can dump after 6 months. What prevents them from crashing the price?"

On Utility:

"Can your platform work without the token? If yes, why does the token exist?"
"You said users can pay with fiat OR tokens. Why would they choose tokens?"
"What's the difference between your token and just using ETH or a stablecoin?"
"If I hold 1,000 tokens, what can I DO with them besides sell?"

On Vesting:

"Your team has no cliff. What if a founder quits after 2 months—do they keep tokens?"
"You have 100M tokens unlocking in month 12. How does that affect price?"
"Why is your vesting shorter than industry standard (4 years for team)?"
"Do advisors really deserve 5% for minimal work? How do you justify that?"

On Value Capture:

"You burn 1% per transaction. At what transaction volume does this become meaningful?"
"You have no burn or buyback. Why would token value increase?"
"Staking gives 10% APY. Where does that yield come from? Is it sustainable?"
"Your platform makes profit. Does any of that go to token holders? If not, why?"

On Risk:

"How do you prevent bots from farming your reward system?"
"What if a whale buys 30% of tokens? Can they control governance?"
"Your token inflates 5% yearly. Won't that devalue existing holders?"
"If token price drops 90%, does your platform still function? Or does it death spiral?"

Facilitation Tips for Success

During Design Phase (30 minutes)

✓ Do:

Walk between groups, listening to discussions
Ask Socratic questions ("Why did you choose that percentage?")
Point out when math doesn't add up
Encourage debate within groups (disagreement = deeper thinking)
Remind groups to use the templates (students often forget)

✗ Don't:

Give "correct" answers (there aren't any—it's about trade-offs)
Let one student dominate (ensure all participate)
Let groups obsess over small details (80% solution is fine)
Allow groups to copy designs from existing projects (must adapt)

During Presentations (30 minutes)

✓ Do:

Strictly enforce the 5-minute limit (use a visible timer)
Encourage peer critique ("What would you do differently?")
Highlight both strengths and weaknesses
Connect designs to course concepts (agency, incentives, signaling)
Compare to real projects ("Uniswap does X, you did Y—interesting!")

✗ Don't:

Let presentations run long (it's unfair to later groups)
Be overly harsh (it's a learning exercise, not a VC pitch)
Focus only on negatives (balance critique with praise)
Let peer critique become personal (keep it about the design)

Grading Guidance

Use the Sample Design as Your Benchmark

The provided sample design (DecentralRide) is calibrated as a B+ (45/50). Use it to calibrate:

Better than sample: 46-50 points (A range)
Similar to sample: 40-45 points (B range)
Weaker than sample: 35-39 points (C range)
Significantly weaker: <35 points (D/F range)

What Differentiates A vs B Work

Criterion	B-Level	A-Level
Utility	Token has 1-2 use cases, explained clearly	Multiple use cases, interconnected, essential to platform, anti-gaming measures
Distribution	Balanced, adds to 100%, mostly justified	Balanced, every allocation deeply justified, compares to industry norms
Vesting	Specific timelines, includes cliffs	Specific timelines + anti-dump mechanisms + sell pressure analysis
Incentives	Basic value capture mechanism present	Multi-layered value capture + risk mitigation + connects to course concepts
Presentation	Clear delivery, handles critique adequately	Confident, persuasive, handles tough questions with evidence

Grade Generously on Creativity: If students take a bold, unconventional approach and defend it well, reward that—even if you'd do it differently. The goal is critical thinking, not conformity.

Wrap-Up Discussion Themes (Last 5 Minutes)

Key Takeaways to Emphasize

Trade-offs are inevitable: You can't maximize everything (fairness vs growth, decentralization vs efficiency)
Incentives matter more than intentions: Design for how people will actually behave, not how you hope they'll behave
Tokenomics is economic engineering: Apply principles from class (agency, incentives, mechanism design)
No "right" answer, only defensible choices: What matters is the quality of your reasoning
Real projects get this wrong: Many failed tokens had obvious flaws students just identified (Luna, FTT, etc.)

Connect Back to Course Concepts

Agency problems: "How did vesting address principal-agent issues between team and community?"
Incentive alignment: "Which designs best aligned user incentives with platform success?"
Mechanism design: "What mechanisms did you invent to prevent gaming?"
Signaling: "What does a short vesting schedule signal about founder commitment?"

Optional: Vote on Best Design

Have students vote (not for their own group) on:

Most innovative utility design
Fairest distribution
Best anti-gaming measures

Give winners small bonus points (+1-2 pts) and explain why their approach worked.

Troubleshooting Common Issues

Problem: Groups Finish Too Early (Before 30 min)

Solution: They're probably not going deep enough. Ask probing questions:

"Walk me through your vesting month-by-month for year 1"
"What's your circulating supply at 6 months? 12 months? 24 months?"
"How would you game this system if you wanted to cheat?"

Problem: Groups Are Stuck (Analysis Paralysis)

Solution: Push them to decide:

"Pick a number. You can always justify it later."
"There's no perfect answer. What's your best guess?"
"Look at the sample reference ranges—pick something in that ballpark"

Problem: Presentations Running Long

Solution: Be strict with time:

Give a 30-second warning
Cut them off at 5 minutes (politely but firmly)
Say: "Great start! Let's open it up to critique now."

Problem: Peer Critique Too Soft (Everyone Says "Great Job!")

Solution: Model critical questions first:

After the first presentation, YOU ask 2-3 tough questions
Then invite students: "Who sees a potential issue with this design?"
Frame it as helpful: "The best feedback is critical feedback—help them improve"

Problem: One Student Dominates the Group

Solution: Intervene during design phase:

"I'd like to hear from [quiet student]. What do you think about this allocation?"
Require all members to speak during presentations

Optional Extensions & Variations

For Advanced Classes

Add mathematical modeling: Calculate circulating supply over time, estimate sell pressure
Include regulatory constraints: "Assume SEC views your token as a security. How does that change your design?"
Competitive analysis: Compare to a real competitor's tokenomics, justify differences

For Larger Classes (>6 Groups)

Assign duplicate briefs (2 groups get same scenario), compare their different solutions
Shorten presentations to 3 minutes each
Have half present today, half next class

For Shorter Time (50-minute class)

Make this a two-day workshop: Design on Day 1, present on Day 2
Or: Do design as homework, use class time only for presentations

For Remote/Hybrid Classes

Use breakout rooms for design phase
Have groups fill out Google Slides version of templates
Screen share during presentations

Additional Resources for Instructors

Real-World Token Design Examples to Reference

Uniswap (UNI): Governance-focused, retroactive airdrop, community-first distribution
Axie Infinity (AXS/SLP): Dual-token model, play-to-earn, inflation crisis example
Ethereum (ETH): Transition from inflationary to deflationary (EIP-1559 burns)
Compound (COMP): Liquidity mining pioneer, governance token
Yearn (YFI): Fair launch (no pre-mine, no VC allocation)

Cautionary Tales (What NOT to Do)

Terra/Luna: Value capture dependent on perpetual growth (death spiral when growth stopped)
FTT (FTX Token): Value tied to centralized entity, collapsed with company
ICP (Internet Computer): Poor vesting, massive unlock caused price crash
Squid Game Token: Rug pull, no real utility, exit scam

Final Tips for a Successful Workshop

Energy matters: This is a fast-paced, interactive session. Keep energy high, move around the room, celebrate good ideas.
Embrace disagreement: When groups debate internally, that's learning happening. Don't smooth it over.
Connect to headlines: Reference recent crypto news (token launches, failures) to show real-world relevance.
Show the sample AFTER: Don't share the sample design until after presentations. Let them discover solutions organically.
Have fun: This is one of the most engaging activities in the course. Your enthusiasm will be contagious!