Incentivizing Your Community with Tommy from Armada | ep. 05

The Evolution of Armada on Solana

Armada has become a pivotal player in the Solana ecosystem, focusing on providing infrastructure for tokenomics, governance, and community building. Tommy, the founder of Armada, shared his journey from winning the first Solana DeFi Hackathon to developing a comprehensive suite of tools for token launches and management.

Tommy's experience in the Solana ecosystem spans over three years, during which he has witnessed the growth and challenges of decentralized finance (DeFi) projects. His initial venture, Sai Options, evolved into a broader vision for structured products, which eventually led to the creation of Armada.

The transition from Sai Options to Armada was driven by the realization that launching and managing a token involves far more complexity than initially anticipated. Tommy explained:

"We realized how much work it takes to launch a token, build a community around that token, build in tokenomics, governance. You know, people say it's gonna be autonomous if it's not, there needs a lot of infrastructure to make that stuff autonomous and decentralized."

This insight propelled Armada to focus on productizing the infrastructure needed for token management, allowing teams to concentrate on their core products while Armada handles the intricacies of tokenomics and community engagement.

Armada's Three Verticals

Armada's offerings are structured around three main verticals, each addressing a critical aspect of token ecosystems:

1. Token Launching Mechanisms
2. On-chain Liquidity
3. Tokenomics and Governance

Token Launching Mechanisms

The first vertical encompasses various tools for initial token distribution:

• Auction mechanisms for on-chain fair launches and price discovery
• Airdropping infrastructure for tokens, options on tokens, and even locked or vested tokens

These tools provide projects with flexible options for getting their tokens into the hands of community members and early supporters.

On-chain Liquidity

Once a token is launched, maintaining healthy liquidity is crucial. Armada's second vertical focuses on this aspect:

• Concentrated liquidity market making program in partnership with institutional market makers
• Diverse liquidity mining programs, including option-based and discount token liquidity mining

These solutions aim to ensure robust on-chain liquidity, allowing community members to easily acquire or sell tokens as needed.

Tokenomics and Governance

The third vertical addresses the ongoing management and community involvement in token ecosystems:

• New staking contract allowing governance participation while receiving rewards
• Tokenomics automation program (demultiplexer) for configurable fee distribution

This vertical is particularly important for creating truly decentralized and community-driven projects.

The Demultiplexer: Automating Tokenomics

One of Armada's most innovative offerings is the demultiplexer, a program designed to automate tokenomics and fee distribution. Tommy provided an in-depth explanation of how this system works:

"Fees can feed into the single program and organizations can configure their instance to distribute fees to different addresses or actions like buying back and adding protocol and liquidity or just transferring to a development fund or distributing to stakers or anything."

The demultiplexer's modular and permissionless nature allows for highly customizable tokenomics. Projects can set up complex distribution strategies that automatically allocate incoming fees to various purposes, such as:

• Rewarding stakers
• Buying back tokens and adding to liquidity
• Funding development efforts
• Any combination of these and other custom actions

This automation reduces the need for manual intervention and increases transparency in how project funds are utilized.

Bonk: A Case Study in Community-Driven Tokenomics

To illustrate the practical application of Armada's tools, Tommy discussed their collaboration with Bonk, a popular meme coin on Solana. Despite its origins as a joke asset, Bonk has leveraged Armada's infrastructure to create real utility and community engagement.

Bonk is utilizing Armada's staking program and demultiplexer to:

• Allow community members to stake their tokens
• Automatically distribute fees from community projects
• Enable governance-driven decisions on fund allocation

The results have been impressive, with approximately 2.5% of Bonk's total supply now staked in the program. This demonstrates how even projects that start as memes can evolve into more serious endeavors with the right tools and community involvement.

The Challenges of Building Engaged Communities

While Armada provides powerful tools for community engagement, Tommy acknowledged the difficulties in building and maintaining active communities. He highlighted several challenges:

• Dealing with noise from airdrop hunters and speculators
• Managing expectations of community members
• Balancing decentralization with operational efficiency

Tommy emphasized the importance of clarity and transparency in community building:

"I think it really needs to be a very, very clear plan of, you know, these are the teams involved, these are community involvement. And this is how, this is who we need help from, how they can help and like the expectations of that."

He also noted that while decentralization is often touted as a primary goal, in practice, usability and functionality often take precedence for most users.

The Reality of Crypto Adoption

The discussion touched on the motivations driving crypto adoption. While ideological pursuits like decentralization and trustlessness initially attracted many to the space, Tommy and the hosts agreed that for most users, practical considerations are paramount:

"I think there's 80% of people in crypto, maybe higher, that are just here for the lols, that are here to have fun, that are here to make money. And they really want to know two things. In all my years of crypto talking to people and talking to normies, I found that people really want to know, how do I make money and is it safe? Am I going to get ruck?"

This realization has influenced product development at Armada, leading to a focus on user-friendly solutions that balance decentralization with ease of use.

The Future of Governance on Solana

The conversation shifted to the future of governance on Solana, with Andrew from the podcast team expressing concerns about the current state of engagement:

"Solana's traditionally lacked a lot of that. This kind of really intense forum debate there just isn't the same degree of buy-in. There's like, there's no trolls. There's no governance trolls. Where's our question? You know, like nobody cares enough to even make fun of the thing, which is very funny to me."

Tommy responded by emphasizing the need for meaningful stakes in governance:

"Well, like to have engagement, you need to have a vested interest and like as, you know, most of these tokens, like they're governance tokens, but what are they governing? Like nothing. So like, why do I care to participate?"

He suggested that increasing transparency around the value controlled by governance and giving the community more control over real resources could spark greater engagement.

Jito Governance: A Step in the Right Direction

The discussion touched on Jito's recent governance initiatives as a positive example of community engagement. Andrew, who has been involved in the process, shared his thoughts:

"We've got some incredible names and voices in there. And it does seem to be people who are inspired both by the project itself and also what we're trying to do in governance. It's people who, you know, I think judo is very good and like smart people sort of, it's like a fire in a dark, right? People just tend to go do it."

While encouraged by the initial response, Andrew also acknowledged the challenges ahead, such as reaching quorum and gradually reducing the foundation's role in governance.

The Path Forward for Decentralized Governance

Tommy concluded the discussion by outlining his vision for the future of decentralized governance:

"I think the transparency around tokenomics. I think the transparency and governance decision around flow of funds, funding different sub-dials that have, you know, their own autonomy from different day-to-day operations is, is the way to get there."

He emphasized that while progress has been made, there are still many challenges to overcome in creating truly decentralized and engaged communities.

Armada's Ongoing Development and Opportunities

As the interview wrapped up, Tommy invited teams interested in launching tokens, improving liquidity, or exploring governance and tokenomics solutions to reach out to Armada. He also hinted at opportunities for yield farmers, mentioning that some of the liquidity pools managed by their market makers offer attractive returns.

The conversation with Tommy from Armada provided a comprehensive look at the current state of tokenomics, governance, and community building in the Solana ecosystem. It highlighted both the challenges and opportunities in creating engaged, decentralized communities, and showcased how projects like Armada are working to provide the infrastructure needed to make these ideals a reality.

As Solana continues to grow and evolve, tools and platforms like Armada will play a crucial role in shaping the future of decentralized finance and community-driven projects on the blockchain.

Facts + Figures

• Armada was founded by Tommy, who has been building on Solana for over three years
• Armada focuses on three main verticals: token launching mechanisms, on-chain liquidity, and tokenomics and governance
• The demultiplexer program by Armada allows for automated and configurable fee distribution in token ecosystems
• Bonk, a popular meme coin on Solana, is using Armada's staking program and has approximately 2.5% of its total supply staked
• Armada partners with institutional market makers to manage liquidity for projects
• The Jito governance initiative has attracted notable names and voices in the Solana ecosystem
• Tommy estimates that around 80% or more of people in crypto are primarily interested in making money and ensuring their investments are safe
• Armada has been working with a market maker for the last month to provide liquidity solutions
• The primary market maker for Armada's liquidity pools is described as an elite trader's volatility trader
• Armada's tools aim to make tokenomics and governance more transparent and accessible to community members
• The company has been developing its infrastructure for approximately 12-13 months
• Armada's staking contract works in conjunction with SPL governance to allow for governance participation while receiving rewards
• The demultiplexer program can handle multiple token types and distribute them according to predefined strategies
• Armada provides a white-label UI that teams can self-host for staking and tokenomics management
• The company is focusing on making governance more accessible and "governance light" to encourage participation

Questions Answered

What is Armada and what does it offer?

Armada is a company building infrastructure for tokenomics, governance, and community building on Solana. It offers three main verticals: token launching mechanisms (including auction and airdrop tools), on-chain liquidity solutions (such as concentrated liquidity market making), and tokenomics and governance tools (including a staking contract and the demultiplexer program for automated fee distribution). These tools aim to help projects manage their tokens, engage their communities, and implement effective governance structures.

How does the demultiplexer program work?

The demultiplexer is an automated tokenomics program that allows projects to configure how incoming fees are distributed. It can receive fees from various sources and then automatically allocate them based on predefined strategies. For example, it can distribute funds to stakers, buy back tokens to add liquidity, send tokens to development funds, or perform any combination of these actions. The program is modular and permissionless, allowing for highly customizable tokenomics that can be adjusted through governance decisions.

What challenges does Armada address in building engaged crypto communities?

Armada addresses several key challenges in building engaged crypto communities. These include managing the noise from airdrop hunters and speculators, setting clear expectations for community members, and balancing decentralization with operational efficiency. The company's tools aim to increase transparency around tokenomics and governance, provide meaningful ways for community members to participate, and automate processes to reduce manual intervention. By addressing these challenges, Armada helps projects create more engaged and sustainable communities.

How is Bonk utilizing Armada's infrastructure?

Bonk, a popular meme coin on Solana, is using Armada's staking program and demultiplexer to engage its community and manage tokenomics. The staking program allows Bonk holders to stake their tokens and participate in governance while earning rewards. The demultiplexer is being used to automatically distribute fees from various Bonk-related projects. As a result, approximately 2.5% of Bonk's total supply is now staked in the program, demonstrating how even meme coins can evolve into more serious projects with the right infrastructure.

What is the future of governance on Solana according to Tommy?

Tommy envisions a future for Solana governance where there is greater transparency around tokenomics and the flow of funds. He emphasizes the importance of giving communities real control over valuable resources to incentivize participation. Tommy suggests that funding different sub-DAOs with autonomy over day-to-day operations could be a way forward. He acknowledges that while progress has been made, there are still challenges in creating truly decentralized and engaged communities, and believes that continued development of infrastructure like Armada's tools will play a crucial role in achieving this vision.

How does Armada's approach to tokenomics differ from traditional models?

Armada's approach to tokenomics focuses on automation, transparency, and community control. Unlike traditional models where token distribution and fee allocation might be managed manually or with limited oversight, Armada's tools like the demultiplexer allow for automated, programmable tokenomics. This approach enables projects to create more complex and responsive token economies that can adapt to community needs and market conditions. Additionally, by making these processes more transparent and putting control in the hands of token holders through governance, Armada's model aims to create more engaged and invested communities.

What role does Armada play in improving liquidity for Solana projects?

Armada plays a significant role in improving liquidity for Solana projects through its on-chain liquidity vertical. This includes a concentrated liquidity market making program where Armada partners with institutional market makers to manage liquidity pools. They also offer various liquidity mining programs, such as option-based and discount token liquidity mining. These tools help projects ensure that there is robust, on-chain liquidity for their tokens, which is crucial for price stability and enabling community members to easily buy or sell tokens as needed.

How does Armada's staking contract enhance governance participation?

Armada's staking contract is designed to work in conjunction with SPL governance, allowing token holders to participate in governance while still receiving staking rewards. This solves a common problem where users had to choose between earning yields and having a voice in project decisions. By combining these functions, the staking contract encourages more active participation in governance without sacrificing the economic incentives of staking. This approach aims to create more engaged and invested communities where a larger portion of token holders are involved in decision-making processes.