Web3 Playbook

Objective: Provide all the resources required by Web3 entrepreneurs, teams and community to succeed at #BuildWeb3

Background: Best time to BUIDL Web3 is now! 

We are no strangers to most great projects built during tumultuous market conditions. In order to make sure the Crypto community stays ahead of the curve, we want to call the builders with breakthrough ideas to make the most of this market and create products of value.

To do our bit to encourage the community, we are creating this ‘Playbook’ to share the fundamentals of building a great Web3 project. This will be an indicative, and in time comprehensive bucket list that you can use as a reference to navigate through your enterprise journey. 

To add your feedback and suggestions to the Playbook, click on the following document: https://docs.google.com/document/d/1pV_hBWQpDnQXvu-YeZOsGo4us50q-NrNzxjvkaZrq7o/edit?pli=1

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Phase 1 – We will be introducing you to establishing your foundation from scratch

Phase 2 – FAQs on fundraising in Web3, list of investors, key projects backed by them

Phase 3 – Ways to identify the right protocol to build 

Phase 4 – Insights on tokenization, designing the token allocation for community, user identification

That’s not all. In order to not limit ourselves to resources, we are encouraging everyone with knowledge of building Web3 products, insights for new founders, as well as aspiring builders to contribute to the Playbook. 

There is a separate section for questions which we will moderate and respond to in terms of an ongoing FAQ series.

All the documents you will need are accessible to everyone and anyone can share their inputs and comments.

We invite you to share your valuable insights on #BuildWeb3 with us. Your responses will be attributed to your username and will be visible to fellow Web3 enthusiasts.

Let’s make this a memorable time for the Web3 builder community!

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When launching a web3 startup, you actually don’t need a ‘company’. Which means there’s no need to have a for profit setup, no need to have equity holders etc. In fact, having equity holders leads to a clash in the decentralized philosophy as the question then is, are you working for the shareholders or the community? 

However, there are centralized interactions such as subscribing to SAAS products, buying equipment, hiring employees, renting office space etc that require you to have offline entities. For such use cases it’s best to set up a non profit foundation. This non profit foundation can be assigned a certain percentage of the network tokens in order to effectively function on behalf of the network. 

The main purpose it will serve will be ensuring true decentralization in every sense. Especially when the foundation is at its earlier stages, it is important to foster a sense of giving to the community by setting up operational goals. DAOs will be governed by algorithms and will be accessible to the community worldwide. It’s not compulsory to have written agreements as most of the protocol will be digitally signed.

Over time, the objective of the foundation should be to set up a DAO and transfer any remaining assets over to the DAO. Post that, the DAO can allocate a budget for the foundation as required. DAOs would also need to figure out how they can continue to earn income in order to effectively manage and run the network/protocol/DApp. The DAO should also in time develop a mechanism where incentives are sent to token holders or rightful recipients automatically without any intervention. There should also be a channel where feedback or suggestions can be sent to members, and actions recorded publicly in response to that. 

The below countries are popular options for setting up a non profit foundation. 

  1. Switzerland 
  2. Cayman Islands
  3. Marshall Islands
  4. Wyoming, United States of America
  5. British Virgin Islands
  6. Panama
  7. Singapore

For DAOs which will generate profit, the following countries can be considered to transition from a non profit to a DAO 

  1. Liechtenstein
  2. The Bahamas
  3. Panama
  4. Wyoming, United States of America

Some popular Web3 foundations 

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Shardeum Foundation

HQ – Switzerland

Objective – Enabling users to build their projects on the Shardeum platform and creating optimal ways to share information with the community and create transparency. The foundation will eventually function as a DAO

11% of the tokens have been allocated to the community

Services – Build awareness around Crypto, help the community create innovative Web3 projects 

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Ethereum Foundation

HQ – Switzerland

Objective – The Ethereum Foundation’s mission is to promote and support Ethereum platform and base layer research, development and education to bring decentralized protocols and tools to empower developers and produce next generation decentralized applications 

Services – Building dApps, educating the community on building tokens, creating DAOs for existing network

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Cardano Foundation

HQ – Switzerland

Objective – The Cardano Foundation oversees the development of the Cardano ecosystem and supervises its activities

Services – Expand community, constantly update legislation standards, improve accountability of members within a network 

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Stellar Foundation


Objective – Support the development and growth of Stellar Network. It also oversees the legal and regulatory activities of Stellar where external stakeholders are involved.

Services – Providing tools to build foundations for financial equality on Stellar network, ensure continued growth of the network, creating infrastructure to store money

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Tezos Foundation

HQ – Switzerland

Objective – The Tezos Foundation aims to promote and aid the development of new applications to build decentralized platforms which are open and accessible. It also develops the Tezos protocol.

Services – Expand and sustain the Tezos community, secure success of Tezos by providing grants to innovative initiatives in Web3

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Litecoin Foundation

HQ – Singapore

Objective – The Litecoin Foundation’s objective is to develop and promote state of the art blockchain technologies

Services – Ensuring liquidity of tokens, building a safe infrastructure 

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Source: Legal Nodes

Types of Legal Wrappers

Based on the entity structure that’s been decided, we can move on to the type of Legal Wrapper the DAO can have 


This structure is more popular among DAOs and lets members have control over governance with each one responsible for a task. While incorporating LLC makes DAOs more stable, an increase in the number of members would lead to some activities being run single-handedly by certain individuals such as moderation, taxation, etc

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Unincorporated General Partnerships

This structure functions like a partnership where members share responsibilities but are also subject to liabilities for the organization as well as other members. This might not work for members who have chosen not to enter into a partnership but simply contribute to the community. However, members can be protected from any unprecedented risks by ensuring protocol is on the smart contract and all the actions in the community are monitored and recorded. 

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Non Profit DAOs


Unincorporated Non-profit associations are similar in function to Unincorporated General Partnerships but can choose to be limited liability and also file taxes. Their memberships are easy to get. The members don’t gain any profits from this as such. One key factor about them is that their statutes can vary in different states


This structure enables members to be able to hold ownership rights besides being contributors. This allows for variation in terms of voting rights but needs a set framework in place so that those rights can’t be misused.  

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Ownerless Foundations

These mostly exist in offshore jurisdictions which are mostly controlled by vote of the DAO but run by a council. These are the most popular types of foundation where grants are made to expand the network and develop the protocol. However, the members will not have any ownership rights but can vote on decisions. 

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Special Purpose Trusts

In this structure, a group of trustees led by an enforcer are responsible for implementing any actions on behalf of the community votes. This type of structure provides room for any legal agreement that the foundation would want to get into. This structure can be created without the need for government registration. 

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Regulations for Web3 foundation in countries

The Top 3 Legal- frameworks for DAOs:

  1. Switzerland
    a. The Swiss Foundation Law
    b. Swiss Association
    c. Decentralised Autonomous Association (DAA)
    d. Private International Act (PILA)
  2. Cayman Islands
    a. Foundation company as a legal wrapper
    b. Foundation company as a legal wrapper with a subsidiary
  3. The United States of America
    a. Limited Liability Company; Delaware & Wyoming
    b. Unincorporated Nonprofit Association; Siloed & Wrapped entity structure

A DAO LLC can help the investors secure their assets and protect themselves in case the network is facing any legal troubles. Setting them up is not difficult either. To figure out the right place for setting up a DAO LLC, we have curated the below information. 

Wyoming, USA: On March 9, Wyoming amended the Decentralized Autonomous Organizations (DAO) Supplement (Supplement), which permits decentralized autonomous organizations (DAOs) to incorporate and obtain legal status as limited liability companies under Wyoming’s Limited Liability Company Act

The company should follow the format of LLC under the recent amendment for DAOs. This will prevent companies and members from being taxed separately. This designation will also help the DAO get registered in Wyoming fast.

When you form a Wyoming LLC or form a Wyoming Corporation, the law requires you to have a Wyoming registered agent to accept important mail and legal documents on behalf of your company at a Wyoming registered office physically located in the State of Wyoming.

You also need to file for an Article of Organization with the Secretary of State for a sum of $100.

Following that, an LLC operating agreement needs to be created to establish the following

  • Organization details which include company formation, member details, 
  • Authority of members, management of the DAO, rights to vote
  • Capital allocation, profit distribution, fund management

Finally, an Employer Identification Number helps with creating a business account and expanding the company by hiring new team and getting the right infrastructure for the DAO to function

Due to the Treaty of Friendship, Commerce and Navigation between the Federal Republic of Germany and the United States of America, a DAO LLC registered in Wyoming is recognized in Germany as a LLC and has the rights to operate in Europe. 

The DAO can be member-managed, like an LLC, or algorithmically managed, in which case the smart contract must be editable, upgradable, updatable, and modifiable

Check out the list of legal consultants here

Switzerland, Europe: The most used jurisdictions are Switzerland and the Cayman Islands. Switzerland provides in comparison to other European jurisdictions a more flexible foundation model with a relatively easy setup and a quite moderate taxation.

Under Swiss law, an association qualifies as a group of natural persons and/or legal entities constituted and organized based on a written agreement with the pursuit of a non-economic purpose.

Associations have the following main bodies:

  • the General Assembly
  • the Board of Directors
  • the Auditor (only if certain thresholds regarding balance sheet, revenue and full-time employees are exceeded)

Switzerland has been in the news for its Crypto friendly approach with supportive local jurisdiction and seamless collaboration with local law enforcement. Some prominent foundations such as the Ethereum Foundation, Cardano Foundation have headquarters in Switzerland. There is abundant legal support available for setting up non profits in an easy way without delays. 

An association will need registration in the corporate registry and also sign up for tax declarations. Under article 60 of the Swiss Civil Code, individuals won’t be subject to liability but it will be the organization who will be acting as a united body. 

While the recognition of a foreign DAO governed by the law of a State will not pose challenges, DAOs that only have virtual presence and that do not meet constitution requirements according to the law of a State will create legal uncertainty.

Check out the list of legal consultants here

Cayman Islands: According to the Cayman Islands Foundation Companies Act, 2017, a ‘foundation company’ will be given a legal status if it functions like a civil-law foundation or common-law trust while retaining the separate legal personality and limited liability of a company. 

This benefits the establishment of DAOs where the organization can operate without shareholders as long as there are set protocols in place for its supervision which in the case of DAOs is governed by the blockchain technology. In addition to that it supports an objective method of supervision where the entities in charge do not have any vested interest in the governance of the company. 

The foundation will not be subject to income or capital gains taxes. Anyone can have membership access. However, it is only subject to the rules of the constitution how members will be able to access governance or supervision rights. 

Every foundation will have to pay an annual Companies registry fee to the Registrar in January of each year of US $854. There is often a secretary fee involved in this case along with legal fees based on whether the constitution protocols need customization.

It takes about 1-2 months to set up a foundation. The legislature also replicates the American and English legal system which makes it easy to work with for international legal firms.

Check out the list of legal consultants here

Marshall Islands: The Republic of the Marshall Islands announced that it will allow DAOs to register as legal entities early this year. The Marshall Islands passed an amended Non-Profit Entities Act 2021 which will let DAOs operate in the country. The country’s first DAO was launched by MIDAO, a domestic registering company co-founded by country’s former chief secretary Bobby Muller. 

The agreement to set up a DAO in the Marshall Islands needs to be only signed by the founders. The governance protocol needs to be incorporated on the smart contract after that. 

The members who own more than 10% of the tokens are required to disclose their identity and other information. The rest can remain anonymous. 

Non profit LLCs are also exempt from paying taxes in the Marshall Islands. The DAOs will not come under US Federal Laws but can access US postal services. 

Check out the list of legal consultants here

British Virgin Islands: The BVI’s Financial Service Commission approves the Financial Action Task Force’s definition of a virtual asset which means digital tokens can be traded and used for transactions. They allow this to be recorded as a payment or investment too. 

If Crypto exchanges provide additional services, they are subject to Securities and Investment Business Act (SIBA), 2010. This means that they will need an investment license to operate

There are no specific taxes levied against cryptocurrencies in the BVI. The BVI is a tax-neutral jurisdiction and does not have any withholding tax, capital gains taxes, income tax or corporate taxes. 

Few points to keep in mind while establishing DAOs

DAOs can have different entity structures based on the objectives of the foundation.

It is important to remember that legal entities will have more advantages than foundations which do not have a legal structure in place. They can own assets, protect the interest of the community in terms of taxation and also interact with external entities.

Source: Andreessen Horowitz – A Legal Framework for Decentralized Autonomous Organizations

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Building Community in Web3

You might be aware of how Web3 works by decentralizing the internet and putting power back to the hands of the people. But if you’re building a product in Web3 from scratch, you might wonder how to execute this concept and build something where everyone has an equal voice. 

So here’s what you need to know. The fundamental of your project should be ‘Building WITH the community’. 

Suppose you are a two man army building the potential disruptor in the Web3 space. Based on your research you have identified what you are going to do in order to bring your product to life. You announce your enterprise and excite the community with your teasers. While you’re impressed with the outcome, the finished model might not be quite like what your target market anticipated it to be. As a result, you could see low engagement, challenges in user experience, etc.

To avoid this, ‘Build COMMUNITY before product’

Founders make the mistake of building a product first and then build the community. This is a Web2 approach. In Web3, you put your idea out, get like minded people together and build the community. You can then start working on the product step by step while ensuring that you’re taking community feedback simultaneously to be in sync with the sentiments of the ecosystem.

There are multiple ways to have your community built:

1. Twitter: use as a broadcast page and for public interactions. Announce, answer and respond to every mention you get and as soon as you can. People need to know you’re an active community. This will showcase how involved the stakeholders are.

2. Telegram (start with channel, once you have bandwidth start a group as well). The Telegram channel should be used as a broadcast page. You can share key updates related to your product and the market as well as any significant movements.

3. Discord – this is where the key conversations would take place. This is the place where you can talk about the product, technology, marketing strategy and just about anything. You can eventually start recognizing the top contributors to the community and make them eligible for rewards to motivate others to contribute as well. Treat this as your team hangout area. Community is your team, especially when you’re just getting started. Have this from Day 1.

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Weekly check in: 

Community makes you more responsible. Make it a point to post weekly updates on all the channels that list all the work done in the previous week. This does two things: 

1. Makes you accountable. Since you know you have to put out weekly updates, you will not slack off 🙂

2. Gives your community ownership. When they read all the weekly accomplishments, they know they’re building this with you.

If you want to take this a step further then have weekly calls on Discord which can be joined by everyone from the community. We do this at Shardeum for the marketing team. Every Monday we have a metric+TODO call that is joined by everyone from the community. You can view some samples of the metrics here https://bit.ly/shardeum-marketing-trello

You can witness the next call by joining the Shardeum Discord. We have these call every Monday 3:30 PM UTC

Do you want to take community ownership a step further? Open up your Google Drive. Let everyone from the community have access to it the same way your team has access to it. Shardeum does this as well, you can check it here https://bit.ly/shardeum-public-drive

Have more questions on building community? Drop them here and we will help you get started

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Raising capital

While some try to sell Equity + Tokens, truly decentralized startups have no need for equity.

So going with token issuance is just fine. But it should not be done just because everyone else is doing so. If you issue a security token, that might act as equity so it needs to be a token intended for compensation for contributors of the network but also needs to have real world utility. You need to ensure that the token has returned for the community.

You will be compromising with the decentralization aspect of your project if you issue equity tokens to the community. This might create unequal voting rights eventually with the ones having equity getting more stake in decision making. Equity is the first sign ‘Never decentralized you will be’

If you only stick to tokens, your chances of transitioning to DAO are faster and smoother.

When you are trying to raise funds from VCs, angel investors, etc, make sure that your strategy about ownership and distribution rights are transparent so as to avoid any confusion regarding equity dilution. In Web2, you eventually end up giving investors more rights and risk your own community’s say in the operations. In Web3, most investors are clear about their position right from the start. After an initial round of raising funds, the enterprises move to decentralized forms of fundraising or start this right from the ground up.

Investment DAOs invest in funds as an entity where token owners vote on which projects to vote on. The treasury is supported through token sales and the governance is based on which region the DAO is established. Investment DAOs are more inclusive in nature and there is less risk of liquidity. 

Tokens can be sold: 

Private: Accredited investors, angels etc can buy the tokens. Do this if your product is not live yet. Tokens sold before product is live can qualify them as securities in some countries especially the US

Click here to access the list of Web3 VC funds. Please feel free to add more names to the list.

This is a list created by Marina Spindler of Torogos Dev. It is a comprehensive list of women investors and founders in Web3. 

Here’s a list of top Web3 investors. 

Here’s a list of top Web3 seed investors. 

Please feel free to add more names to the list of investors for everyone’s reference. You can drop in your suggestions in the comments section

To ensure decentralization you can put a maximum cap on how much investment each fund can make. This ensures no single investor has a large stake in the project. Investors with large stakes would lead to centralisation of power. Hence it’s important to keep the max cap. 

Public: You can sell tokens publicly if you have a working product live. 

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A new way of getting access to capital is to create NFTs. There are no clear laws currently and we’ve seen projects selling NFTs even before the product is live. 

This is a great way for early investors to have intellectual property in your project. You can record all investments, token sales, etc on NFTs. You need to determine the pricing of minting and NFT and sell it. Be mindful of returns received in Crypto and how you can utilize them for your project. 

In order to have a concrete roadmap on fundraising with NFTs, seek legal advice. Here are a few firms you can touch base with for your queries. 

This is because NFT itself is a product. As long as you do not promise any future use cases and sell the NFTs as is. Disclaimer: none of these are legal advice, always contact your legal advisor before doing any of these.

NFTs sold without any specific product

NFTs like BAYC, Moonbirds, Cryptopunks, etc are created to establish a community for broader purposes. These NFTs are unique artworks and do not really have a product backing it. However, purchasing them will ensure that owners have access to their exclusive community and also enjoy certain perks. In the case of raising funds, it can be minted with the same goals. Once a considerable amount of NFTs are sold, you can build your product around it and allow investors some advantages early on. 

Grants: Many larger Web3 projects have their own grants programs. There are also DAOs that provide grants. 

Here’s a list of some of the Web3 grants for your reference.

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DAOs or Decentralized Autonomous Organizations are built on rules encrypted on blockchain. They are not governed by a single individual but operate based on the votes of the members who are a part of the organization making the functioning decentralized. The data of individuals are secured on the blockchain. 

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DAO Governance and Voting Mechanism

The most common type of voting is token based voting where every proposal goes through a vote and decisions are based on the majority votes for a decision. However, a specific number of votes determines the majority and if that consensus is not reached during the voting, then the proposal falls through.

It becomes a challenge when members are not actively involved. Despite community moderations and engagement, it could become difficult to get the desired votes or lower the bar based on participation. The latter could be classified as manipulation. Additionally, it is important to set a benchmark on how many tokens an individual can possess so that certain members don’t end up turning decisions to their favor.

Image Source: 101blockchains.com

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For quick resolutions of proposal

In case of decisions that need to be made on an urgent basis and sees low participation from the community, a relative majority DAO mechanism can be established where members can vote for or against a certain decision. However, it does not factor in the number of votes so a single vote against the proposed decision could make it come to a halt. In order to solve this, members can elect one individual or a set of core members who can take time bound decisions on behalf of the community. It needs to be someone democratically chosen and trusted (could be among the most active members) who can take a lead on decision making and implementation of propositions. 

Besides this, having sub DAOs for specific functions with each being led by a community manager who is actively involved in operations and has a good working relationship with the community. These sub DAOs can focus on decisions within their domain such as finance, operations, security, technology, product updates, etc. This ensures swift decision making with minimum deliberation. It also helps community members with interest in a particular field to contribute better. 

However the ultimate decision goes through the Super DAO and decision makers found to be manipulating votes or tweaking majority consensus can be penalized. It could also revoke their rights of making decisions on behalf of the sub DAOs

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Transitioning to a DAO

Ensure you disclose information such as project stake of founders, information related to tokens, their function, trajectory of the organization to all stakeholders. Shardeum does this by making its root Google Drive folder public, besides scheduling weekly update calls for members to be aware of day to day activities. 

Before you start enabling voting for the community, make sure you conduct stakeholder surveys to understand the response mechanism and how the community prefers to be involved. 

You can eventually start with one or two votes for specific functions such as design or operations to gauge the pulse of the community. It will also give you an idea of how to manage voting when the community grows and sub DAOs will have a sense of accountability no matter the magnitude of the decision. 

You may not be able to transition to a DAO overnight but if you start right in terms of making resources and information transparent, involving the community early on, it would be an easier process. You can try to do a phase wise transition to DAO for each function with the help of sub DAOs. Once all sub DAOs are running parallely, you can start integrating the same structure in the organization top down. 

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Vesting a portion of your tokens will ensure that the core members and investors have an interest in the well being of the DAO. Ideally, there is no specific number of tokens to be vested for each project. It will mostly depend on what function the DAO will serve. It should be discussed before the project starts so that stakeholders are aware of the time period of token vesting for core members which is an important decision making factor. 

This also prevents any pump and dump from the founders who are not building a genuine product or creating them simply based on positive market sentiment in bullish conditions. The vesting can serve as Proof of Commitment on part of the founders. Partners, advisors as well as the community who are responsible for creating a project get their token vesting conditions embedded on smart contracts and when these tokens are gradually released, the process is called vesting. 

The laws of token vesting can be drafted with the help of external legal consultants to ensure they are deployed on smart contracts and cannot be breached or tampered with. 

There needs to be a mechanism in which urgent needs of token selling can be taken into account. This can be considered at a later stage of course. Tokens can be either vested based on specific timelines as the project grows or a certain percentage of it can be allocated right at the beginning. 

Before tokens are released for vesting, there is a period called Cliff when tokens are locked for seed investors. The duration can be based on the purpose for which the tokens are allocated or to whom they are being allocated to. For example, an investor’s cliff period could be 12- 18 months. Once the stipulated Cliff period is completed, vesting period begins.

Project owners can choose to release a set amount of tokens in each phase of developing the project or choose to release some amounts of it in a calibrated manner with a set valuation for each phase. Vesting is a crucial part of tokenization for most projects as these prevent token holders from exploiting project valuations. This also prevents any fluctuation of token prices in the market.

There needs to be a fair balance between token holding among owners as well as contributors in the community. Setting aside 20% of tokens for the core team is usually done across projects. Standard vesting of tokens can be anywhere between 2 to 4 years from project launch. One factor that needs to be considered is how many years have been already put into the project at the time of fund raise. If fundraising for a project happens early, investors can have a standard 4 year vesting period. Usually the most preferred time period is 2-3 years.

While token vesting is a major aspect for project commitment, team member vesting is also needed when it comes to investing in a new project. Team vesting ideally should be on par with investor vesting. However, it need not always be the case depending on team background. New teams will find it harder to keep the vesting lower than standard. Standard is 4 years linear vesting if it’s a brand new project. If you’ve dedicated a few years of effort already with an OG team then you can bring this down to 2 years.

A proper vesting schedule motivates the team to deliver a good quality product on time without benefiting any single individual. 

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Most Protocols and Dapps start anywhere from $10M+. There are projects that get $100M and above valuations depending on a variety of factors such as team, product status, early traction, community strength etc. 

Since 2017, blockchain projects have gained investor attention and with their success, many early stage startups with a promising run don’t have a problem raising $100M+ even before they launch. With the prospect of more liquidity, a Web3 project can be estimated to have more value than a Web2 project when compared at similar stages of a startup journey. 

However when blockchains are valued, a few factors are taken into account

What a blockchain offers in addition to its features, such as scalability with increase in operational efficiency, rapid evolution and parallel processing of command, low cost and reduced security threat. The data that exists on the blockchain will be valuable once these elements are present on the network.

In addition to this, how a blockchain validates transactions, its reward mechanisms, etc are important to analyze before setting its value. Besides, how a blockchain benefits the ecosystem – whether on its own or by being incorporated into a technology application, whether there is a unique feature that can become a stepping stone for other networks are scrutinized by investors before they bet on it. 

Lastly, the applicability of blockchain, its utility and source of revenue are also of prime importance for investors. So when setting valuations of a project, these need to be kept in mind. 

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Proof of concept

A proof of concept (POC) is a presentation of an idea where it’s showcased how it can be turned into a real product. This shows the viability of the product and how it can be brought to life based on the vision.  

A solid Proof of Concept (PoC) will help your product define the requirements at various stages and the finished product goal. This sets expectations for all stakeholders in terms of what the product life cycle will look like and any features that stand out. This also helps developers plan ahead and involve community members as and when required.

Before taking the product public, a PoC can make a lot of difference. It can set the context for the product coming up and prepare potential enthusiasts for their involvement in the project. It need not dive deep into all details entailing the product but give a broad picture of the feasibility. 

It is a way to build confidence for the community and also give them the conviction that the project promises.

An ideal Proof of Concept should list the vision of the project, the goals and objectives, and steps taken to achieve them. A whitepaper would come as a more detailed description of the project but the PoC is the teaser. You need to ensure maximum impact through it to build curiosity among your target audience. It can also ensure the team members have clarity about the requirements and plan their strategy accordingly

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Creating an MVP

Once you’ve created a solid Proof of Concept, it’s time to unveil your Minimum Viable Product (MVP). 

The MVP builds on the Proof of Concept and introduces the product with basic functions in place. For example, if you’re building a blockchain, you should roll out an alpha version where builders can start creating dummy projects to test its functionality. It’s beneficial for getting feedback on improvements, design, way forward, etc. especially from the community.

Of course while building the MVP, one can take the liberty of designing it in their own way. But it should be in its elemental form where only the core functionality is available to be tested in order to keep the process simple and quick.

Don’t wait for the perfect product design or perfect model. Roll out and build as you go along with constant feedback and inputs. It could also test the waters with an initial legal framework in place to make sure all is going according to the law and there are no transparency challenges.

With an MVP, you save time and cost of building and revising your finished product. You are ready to take the product to the market quicker with little to no changes required as it has already been built according to the needs of the audience.

Few things that you need to keep in mind while creating your MVP are:
1. How you can justify its application to real world use cases

2. How you present your product at token sale in order to be completely clear on your goals and make sure that stakeholders are on board

Your fundraising process will become slightly easier with an MVP in place 

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Raising Funds

One of the key things you should chalk out in your fundraising strategy is what you’re looking for in your investor. With the onset of Web3, builders have more liberty of choosing who they want support from based on the vision of investors.

It is important that your investors are not just enthusiastic about Web3 but also support it wholeheartedly. Someone who has previous experience in the ecosystem would be ideal as they have a fair idea of backing and scaling decentralized projects. However, if new investors are willing to come on board, such as Web2 leaders/companies, they should be given a chance. But it is important that they are on-board with the Web3 vision. 

Your seed and pre-seed stages are crucial if you’re raising funds for a Web3 company. Most projects gradually stop raising funds after a couple of rounds. In the initial stages when you’re developing a MVP,  you can consider getting grants from Web3 platforms. 

However, the grants will only be helpful if the solution you’re working on is what the blockchain grants are also supporting. If not, going directly to the fundraising round with your MVP is your best bet.

Private funding rounds for Web3 startups often stand only till decentralized fundraising comes into the picture. In fact, selling tokens of new projects once a sustainable working model is built has become the norm.

While shortlisting investors, it is important to know if they will be able to support with the following:

  • Scaling the project
  • Creating the right tokenisation model (if applicable)
  • Advising on building protocols on smart contracts
  • Providing access to a larger network of Web3 professionals

With decentralization being key, you don’t have to rely on investors’ approval for your decision making process. Community incentives and growth trajectory can be determined by founders with inputs from the stakeholders.

Few things to keep in mind when you go for fundraising

  • Check the portfolio of your potential investor
  • Speak to your network about their contribution to the startup ecosystem if not specifically Web3
  • Make sure your core principles are the same as they would be for any new project regardless of whether it’s in Web3
  • Address any concerns regarding dilution or equity for new investors

Here’s a list of early stage Web3 incubators to consider 

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Testimonial break

Chainhash.io which was one of the first projects built on Shardeum, shares some insights on building on the L1 blockchain, getting support from the community and being mentored by NIschal. Here’s an excerpt from the conversation:

The following has been contributed by Chainhash.io co founders @vaijanath_eth, @puneetrst

“Once our co-founders joined the Shardeum discord server, they all started contributing to the OCC principles of Shardeum. It was at that time our co-founders connected and realized each other’s strengths and planned to collaborate to build together. This journey also showcases how a community member in Shardeum can become a Shardeum Contributor & also find their co-founders inside the Shardeum ecosystem. Our co-founders wanted to make a product which adds value to user experience and is collaborative, not competitive. ChainHash was born from the OCC principles of Shardeum.

We choose Shardeum as we want our product to be accessible to the masses while being Secure, fast & free from high gas fees impact. As all co-founders have been following Nischal and his innovations for a long time, it was on 2nd Feb that all our co-founders came to know about Shardeum when Nischal announced it on Twitter.

We decided to build an aggregator platform to make life easier for users by eliminating the paradox of choices and connect users to all liquidity pools on Shardeum through one platform. Our smart Router protocol fetches the liquidity from all the pools & gives the best value for each swap of an asset. It also solves the liquidity problems for high-volume trades on Shardeum.

The experience so far has been overwhelming, all the team members of Shardeum, the community, and the contributors have been very helpful. We already collaborated with some community members to contribute to our Platform & also with projects that are built on Shardeum.

Web3 is still in its nascent stage and we feel the most important aspect of building Web3 is educating the users & onboarding the next millions to Web3 & Crypto. The DeFi industry evolves starting with swapping/trading one asset to another. Till now the aggregator platforms have majorly been used by OGs and Degens but we want to make the most superior platform that is not only helpful to existing Aggregator platforms users but can also be used by new users thru educating them.

Our motto at ChainHash is Empowering Decentralized Economy and we want every user to have access to the benefits of a decentralised economy.”

The contents of this site do not constitute legal advice nor intend to be a substitute for legal advice. The information on this site is for general information purposes only.  You should always consult a legal professional before starting your Web3 venture. This site contains links to other websites that we do not endorse but has only been added for the purpose of information.

Announcing your Web3 project

At this point, you already have an active community. There are contributors to the project and early adopters who have been following the developments for the project for a while. It’s likely that they have tested your MVP and read news about funds you’ve raised from credible institutions.

While announcing your Web3 project, make sure you’ve prioritized the feedback from the community, based on their interaction with your initial releases. This will keep them motivated to be a part of the movement you’re trying to build and also make them feel valued. 

While you can customize your marketing strategy based on short and long term goals, target audience, etc., it’s important to focus on organic engagement instead of right away switching to paid engagement. Since Web3 is all about giving back power to users, you can follow the standard rules of incentivizing your audience with native tokens, opportunities to build their own projects, validate nodes, etc. 

Since India is an emerging market in Web3 and there is a lot of enthusiasm around the space, meetups are a great way to connect with potential users and Web3 enthusiasts. Lots of young people in cities across India are interested in participating in Web3. Shardeum has been conducting meetups across several cities to make this happen. You can encourage your community members to host these meetups. That way they get to lead new participants to Web3 and build a persona in the ecosystem.

If you want to take the traditional marketing route, make sure you prioritize educating the media about your project and its future. Since news stories will be one of the key pillars of credibility, it is important that journalists are well informed about updates in the community and the new products and services emerging in the space. Especially since it will help them understand how it will positively impact new users and they will be able to share the message with their readers.

Social media is a great tool for marketing your Web3 product. Twitter & Reddit have become important platforms for projects to unveil their offerings and also connect with the right set of people. Twitter has become quite Web3 friendly in recent months. It is the platform of choice for most Web3 marketers. This is where you can reach the amateurs and professionals of the industry alike by talking in depth about the tech, building open source projects, etc while also simplifying the whole idea to showcase the broader objectives. Don’t forget to share educational content occasionally to keep your readers updated about the intricacies of the Web3 world, be it tech, regulation, laws, etc.

While promoting your project, do not forget to build your online presence. It is something I followed while building WazirX which gave the platform the trust it needed when Crypto wasn’t perceived as positively as it is today. You can start by sharing your skills and vision as a founder/builder and what you plan to do for the ecosystem. You can also update the progress of your project and your role in it. Don’t forget to engage with followers to show that you are approachable and on the same stage in the Web3 journey as them, trying to build the project together from ground up. 

Hiring new members

While Web3 talent isn’t as extensive, there are many interested participants who want to join the movement. Techies in Web2 are increasingly recognizing the benefits of building on blockchain. They need opportunities to explore their potential in this space. Also, many product developers and marketers who do not have Web3 experience want in if they are pointed towards the right opportunities where they see themselves exploring their talent. Remember, there is a genuine need for UI/UX talent who will create the right infrastructure for Web2 users to transition to Web3. These are the talents you should scourge for.

Some points to remember before hiring new talent:

  • It’s not important for a candidate to have prior experience in Web3. They should be willing to learn. We are still in the early stages of adoption, and we must encourage more people to join the Web3 talent base
  • Focus on hiring members based on your objective at each stage of building the project, perhaps once in six months or once a quarter. Don’t create standard roles based on what others have done. Your project is different and it need not resonate with their hiring processes. For example, in the first stage, you want to build a solid technology foundation while also spreading the word about it and growing the community. Your roles should focus on that. In the next stage, you might want to hire someone who is good at investor relations and tokenomics, to raise funds, and also figure out an incentive structure for letting people have stakes in the project
  • Ensure that your potential team member also resonates with the fundamentals of Web3. If they aren’t familiar with the same, give them access to resources so that they can read, understand and make an informed decision.
  • Have a clear description of what you require from your potential hire. It should include a detailed layout of your project, your goals, expectations from the role and how it would help them grow as well. 
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10 months ago

Hi sir, my name is Sharik currently pursuing degree in Cochin University of science and technology. can you be our sponsor for building a web3.0 community in my university. If you are interested ping me.


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