MAID => SNToken issuance at launch

There are a number of issues involved with this.

Addressing first the marketing side. There is no need for the 6.7 SNT per MAID or 1 SNT per MAID, it will make little difference.

Addressing the 6.7 SNT per MAID, this has a few issues.

  1. The ICO stated that a small portion of the token would be issued first up and there would be estimated a 20 year supply (see graphs in paper) with purchases going to the network reserves.

  2. Market perception where knowing there is only 15% of SNT at launch then the price is based on that compared to the market seeing all tokens already issued to a select few.

  3. 6.7 SNT or 1 SNT per MAID. Discounting point 2. the 6.7 SNT in the 6.7 SNT/MAID will have the same price as the 1SNT in 1 SNT/MAID. IE for the 6.7 SNT/MAID gives 1SNT=1/6.7 the price.

  4. There potentially needs be a pool added to the system (6.7SNT/MAID) so that any movements in farmers/upload rate/whatever can be smoothed over. The 1SNT/MAID system has this as part of its core.

The biggest issue that I can see is the all tokens given out to the few. I understand some of the reasoning but there comes a point where simplification is not always the best option, and we see the “pools” may have to be added on bring us back somewhat to the original method.

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That is the logical way to look at it.
In my experience logic takes a back seat in the broader “crypto” market.

Edit: @happybeing I am struggling to convince myself that a 1 to 9 conversion won’t cause a run on MAID.

Here is my rationale, maybe you can convince me that it is flawed.

If I own 1% of MAID in circulation now that never meant that I would own 1% of total SNT to exist in the future.
My 1% current supply would not increase over time as SNT is released.

Actually my 1% of circulating supply will steadily drop as circulating supply increased with new issuance of SNT by the network to anyone who farmed. Unless I kept buying or farming at a rate to maintain my 1% share of network tokens.

But with the new proposal my 1% share of MAID now guarantees a 1% share of total network tokens to ever to exist.

My incentive is thus far greater to stockpile MAID now than it was before, no?

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Higher centralisation than what?

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Than not putting all the SNT in the hands of existing holders, but the network issuing it through rewards to farmers over time. Existing holders cannot prevent that by sitting on their stash, so they have less power and the result may be wider distribution.

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I think that if Maidsafe invests in improving token access now (e.g. broader exchange access and liquidity) then it is likely to minimize the sour feeling that only existing token holders can benefit from the Safe Network. If the token is as easy to access as most others that would help to mitigate the potential imbalance. Certainly, even the notion distributing more tokens (or capping to existing supply) would likely be catastrophic in the context of the present tenuous—at best—exchange situation.

Perception is king. Distributing more tokens to existing holders will be perceived as inflation (I.e. value minimizing), whereas capping SNT supply to existing MAID supply would likely be perceived as scarcity (I.e. value maximizing). While neither route us ideal, if one were to be chosen, I think capping the supply to existing MAID supply would be more optimal. So long as people are able to easily access the MAID (and eventually SNT) market then that would likely minimize the negative feelings of supply capped to present MAID circulation.

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If many of the larger holders, and I suspect it will be true, sit on even 1/2 their holdings for a year then what you point out is very important. It ties up a lot. Also I feel that it will be significantly more than half for those with say over 100K of tokens and higher the more tokens they have.

How long they sit on them will be a good question.

Well, here we have centralisation of the tokens over all network Elders.

We have about 20k addresses with MAID, could there be 5k owners perhaps? Let’s just use that estimate;

Then up to 714 sections (about 20k nodes), there will be more centralisation, than if the community had it all.

That’s the exact reason (part of it at least) we don’t want the network to be able to own or create tokens.
But it’s not all of it. Because if they can create those tokens, they can create any amount of tokens.

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That is not how I see centralisation when taking about the owners. That is a internal network issue and not a market issue.

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This could possibly be the “reserve” actually - the replacement for drip feeding the remaining supply via Elders creating tokens.

If the puzzle solving is a function of the network size for example, then we have the same stuff.

The difference is that there can’t be any owner, just one of the initial holders.

Some of those will be lost for ever (never a real prob). But the incentive to stay around would increase?

This however I think would create more of that effect you mentioned @Josh, if the information reaches the market (that information channel is not very functional though?):

This I think - provided that the information permeates out, otherwise not - should perhaps drive a greater decentralisation of the holdings?

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Centralisation of risk it is however. But I think that is the lesser problem when compared to:

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I was just pointing out what I and I believe others were meaning by centralisation

And yes I have seen the discussions around this issue of security if the network holds tokens and issues due to scale of holding.

But I also wonder if a “network held” holdings of tokens can be hacked then what is to stop people’s holdings also being hacked. Yes I understand size of holding is a reason. I did suggest that rather than the network creating any tokens they exist at start and security built to protect the holdings of each section. I did suggest in that topic a couple of ideas, but doubt this topic is for this aspect.

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If centralisation of risk in Elders is an unsolved problem it questions the whole basis of the network does it not? Are we no longer confident we have BFT?

We need to understand if that’s the case when considering the other issues being discussed here, because it adds another dimension to “wider distribution” which was not part of my consideration.

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This could be a really nice marketing tool in and of itself. If a safe site were set up like safe://safe-token-puzzles and people then had to install the safe-network to access the puzzles and get free tokens, then this site could also be used to educate people about the network at the same time and get people involved.

I dont like the idea of all coins being issued at launch, I think ppl would be less keen to participate in the network.
Then there’s centralisation, current large holders would have a much bigger piece of the pie which could initially allow easier price manipulation until the coins do reach better distribution but this could take a good while.

As for liquidity pool, as was mentioned so much could go wrong, not your keys, not your crypto.

I’ll gladly participate in market making as an idividual as I often do anyways, exchanges often get hacked but also often pay back any loss so I’m more comfortable with that.

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I fear “puzzle solving” may turn out to be “proof of work” which would be a terrible result.

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Could split it up into different accounts with different sites perhaps. So not a large honey pot but thousands of smaller ones. When one empties, then another is released to the public … maybe this could be automated?

lol … how about soduko and 2064 lol … no, I realize those would be too easy to use a program to solve … it would have to be something pretty tricky maybe and yet also not require specialized hardware.

EDIT: How about safe search … people can label/tag data for sites on the network and be given a reward.

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One of the brilliant game theory aspects of bitcoin was to leave the future on the table for those who would commit real resources to the system, either via mining or fiat bids for a share. I believe it is critical that potential participants believe that they could have/generate a real share of the network, instead of simply buying it from those that came before.

I think it would be most unwise to disincentivize either group (speculative fiat bids or resource providers). The rewards from actual use will be hard to foresee at launch and thus I conclude there must be a small ‘subsidy’ up front to support the critical function of onboarding.

One advantage safe has is actual use value (instead of pure speculation like bitcoin), but this will only aid liquidity (network use) rather than via the price → infrastructure participation loop. This may be sufficient to drive the buy side, but it would be systemically safer to add a small tilt in favour of buying as a speculative option. If people will buy to hold, the feedbacks will naturally lead to the network growing and their investment growing in terms of real services. Here, a hard cap on supply and a fair launch are the critical factors, as well as the reflexive aspect of potential participants believing that other potential participants see the game as fair.

I don’t believe there is much to criticise in the initial plan. Adjusting ratios has risk in and of itself, the only safe non-contract-breaking option is to make release of the reserve very hard and slow. As a long time holder, I would be staunch opposition to releasing all tokens at start (to existing holders… the ‘do they exist and are release slowly or are minted’ is immaterial) because I think it would kneecap the long term development of the network.

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The issue is around the network creating the other 85% as needed for rewards. I had suggested and thought from the start of SNT that all tokens would be created. The 15% distributed and the 85% held by the sections. Maybe a smaller holding for each section and splitting on section split and the central holding has many owners and the sections agreeing to distribute more to the section needing the extra,

But this is a separate discussion for another existing topic. It is an interesting one as to what is the best way to go because there are a number of competing issues at play.

My opinion though is the original concept of having 85% reserved at launch and the 10% distributed to MAID holders and 5% reserved for investors is the superior option for more decentralisation amongst the owners, original owners only have control over 10% and cannot control the market once the network is big enough because there will be quite a significant amount held by the farmers. If the 10% now hold all the tokens then they have control of the market for a long time since new people will only hold a fraction of the original large holders. Like 5% with new farmers and rest with original holders.

Also the larger holders holding over 75% of SNT may never need to be farmers since they hold 75% controlling the markets. Whereas with the original plan they will only hold say 25 or 30% after a few months and their control is much smaller and hold 10% of all after a year …

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“Proof of work” itself I don’t consider as bad, if the work is useful.
“Proof of useless work” would be bonkers :slight_smile:

Nothing in that area is absolute. There is more and there is less risk, and approaches and measures we choose to take.

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