5. Advertising around Secondary Market Creation

It is also important to understand that regulators closely scrutinize the promises and marketing related to the potential secondary trading of tokens. Regulators examine whether a project's founders or a core entity make promises or actively promote the token's future listing on trading platforms or exchanges.

If the founders or any central entity emphasize the token's tradability and the potential for value appreciation, it indicates an intention to create a tradable financial instrument and suggests an expectation of profit derived from the efforts of others. Therefore, it is generally suggested that entities related to the network refrain from:

• Making statements about the potential value or future performance of the token, implying any returns on investment.

• Promising high Annual Percentage Rates (APRs) on the chain.

• Providing false or incomplete information about the token sale, such as the number of tokens offered, token price, or total funds raised through the sale.

• Marketing a token as having a specific use case or function but failing to deliver on those promises.

By positioning the token as a means of accessing goods, services, or resources, the emphasis shifts away from being a traditional investment. This clarity and emphasis on utility within the network can also help mitigate the perception that token holders anticipate profits primarily from the efforts of others.

Instead, successful teams have commonly adopted marketing strategies that:

• Clearly state that the tokens do not represent shares or equity in the project and derive their value primarily from utility within the network.

• Educate and emphasize the token's utility by creating informative materials, such as blog posts, articles, and tutorials, that explain the token's practical uses, its role within the network, and specific use cases.

By transparently communicating the token's practical applications and benefits, it helps set appropriate expectations for potential holders and reduces the likelihood of it being perceived as a speculative investment. Emphasizing the utility and functionality of the token within the network reduces the perception of it being primarily an investment opportunity.