Dominic Williams recently sparked debate within the ICP community with a post on X asking, “Does Caffeine need a token?” The post opened the floor to discussions about the mechanics of token issuance and its potential impact on the ICP ecosystem, highlighting new possibilities for tokenomics and governance in blockchain innovation.
In the post, Williams used a hypothetical scenario to explore how Caffeine’s tokenomics could work. He suggested that a fully decentralised “App Module Store” might charge a 20% fee in $ICP, which would then be used by algorithms to buy and burn $CAFF tokens from decentralised exchanges (DEXs). This was presented as an example to illustrate how such a platform could function, showing the potential for $ICP to gain further utility while also encouraging the burn of $CAFF tokens. He also referred to a possible model involving the Internet Computer’s Network Nervous System (NNS) to manage token distribution and governance, with a portion of tokens being airdropped to neuron stakers and another portion sold in token sales.

While Williams did not propose this exact model, it provided an interesting framework for how tokenisation could work on decentralised platforms. It also highlighted the growing importance of balancing platform-specific tokens with the underlying value of ICP itself. The example demonstrated how tokens could be utilised to drive value within the ecosystem, burning tokens in the process and potentially increasing the value of ICP as the platform scales.
This thought experiment ignited passionate responses from the community, with some users supporting the idea of giving more control to decentralised autonomous organisations (DAOs) like the SNS DAO. One response from @ajki76 advocated for distributing the tokens via an airdrop to ICP neuron stakers, based on their stake size and duration, to encourage greater participation in governance. This approach aims to empower those who are actively involved in the network, providing a way for them to reap the rewards of their contributions while strengthening the overall decentralisation of the ecosystem.
This sentiment was echoed by others who emphasised the need to include more people in the governance process, particularly as many ICP tokens are held on centralised exchanges (CEXs) instead of being actively involved in the ecosystem. By creating an opportunity for greater participation, the community hopes to address liquidity concerns and encourage more active engagement from ICP investors. The thought of incentivising participation with airdrops has sparked excitement, with users viewing this as an opportunity to draw more people into the ecosystem and boost its overall health.
Another perspective came from Malo, who suggested that integrating $ICP tokens into Caffeine AI’s ecosystem would bring attention to ICP, helping to attract more developers and projects to the platform. Malo acknowledged that if Caffeine were to develop its own token, it shouldn’t be viewed as competing with ICP but rather as contributing to the growth of the entire ecosystem. This aligns with the broader vision of creating an interconnected network of platforms that benefit the decentralised ecosystem as a whole, rather than operating in isolation.
As the conversation continued, Williams responded to the feedback by explaining that the ultimate goal of platforms like Caffeine is to scale and burn ICP at scale. He highlighted how the creation of millions of on-chain websites, web apps, and services would drive the consumption of ICP cycles, leading to the burning of ICP tokens in the process. This deflationary effect could help increase the value of ICP as more users and developers begin to rely on it for their applications. Caffeine’s role in this is crucial, as it would generate widespread adoption of the Internet Computer by powering a large number of decentralised services, which would in turn increase demand for ICP tokens.
Despite the support for token issuance, there are also concerns about the potential risks of launching a token too early. @CULT2140.sats expressed caution, suggesting that Caffeine should follow the Solana model and focus on building the product first before issuing a token. This model involves launching a working product to prove its value before committing to a token sale, ensuring that the platform has gained traction before introducing tokenomics. Williams has acknowledged that Caffeine would need to be fully operational before a token sale could take place, but he remains confident that the platform’s inherent value would attract users even without an immediate token offering.
Adding a layer of intrigue to the conversation, @CULT2140.sats also speculated that Williams might want to position Caffeine as an American coin for ICP, particularly given the increasing push for American-centric cryptocurrencies. This idea stemmed from the growing regulatory pressure in the US, where figures like former President Trump have advocated for the use of American-issued coins. If Caffeine were to align itself with this trend, it could carve out a unique role in the broader ICP ecosystem, particularly in the US market.
With the promise of millions of on-chain websites, applications, and services, Caffeine stands to play a major role in the evolution of decentralised technology. But will Dominic Williams take the plunge and launch Caffeine AI in Switzerland on World Computer Day this week? The community is watching closely to see what happens next in this unfolding story.