Your idea sounds nice for sure, but you never talk numbers.
What’s you USD valuation for these 20% SMR you intend to mint ? Looking at Kusama, if you extrapolate that shimmer’s marketcap will be 10% of Iota’s, then the lifechanging fund you are talking about will be worth the amazing amount of… around 16M$. And that’s praying that bitcoin doesn’t dive further, which, in the shitty macroeconomic climate we are in, is almost wishful thinking.
As much as I want iota’s ecosystem to succeed, I don’t see your fund making the slightest difference about the fact that in any case, the growth will be slow and organic anyways, because it’s not a few millon dollars that will make much of a difference anyways. But in 2 to 4 years, having been diluted by 20% will show, especially for the die hard iota holders who did not sell their iotas in the slump to earn their smr.
For me it seems everybody here is in just for a quick buck and not for the long success of the IOTA mainnet. People talk about who the supply increase will affect their SMR holding value, instead of talking about what the real purpose of Shimmer is.
Shimmer is supposed to be a fancy testnet with some monetary incentives for builders and attackers. The purpose is to test out and battle-harden upgrades, which after a couple of months land on the IOTA mainnet. So Shimmer is here to serve IOTA and not to become it’s own full fledged network.
As of now more than 60 projects are announced to build on launch on Shimmer. This should be enough to test it for 3-4 months before Stardust hits the mainnet. We just don’t need more to test the network.
However, on the other hand, if the supply increases and incentives are given out to builders the value of Shimmer will probably rise. While one might appreciate that, there will also be serious complications for the future. Let’s just assume Shimmer without the proposal implemented reaches a valuation of $1m - $10m. This would be enough incentive for attackers to proof the network to be secure, but still keeps loses small enough and manageable. By implementing the proposal the value might rise to levels like $50m - $100m or more. These numbers aren’t small and a loss of these funds would be catastrophic for the community. Furthermore, Shimmer can’t be used as a staging network anymore as releasing potentially buggy software on a network that valuable would just be responsible. In the end a staging network for Shimmer would be needed, which defeats its purpose in the first place. On top of this, if Shimmer becomes too successful the IOTA community might split up into two. Do we really want this?
I prefer that Shimmer keeps it’s original purpose of just being a testnet. In the end it will be just another 3-4 months until Stardust then transitions to the IOTA mainnet.
If everybody sees shimmer like that, who will buy shimmer and create the value?
At the end devs, investors, everyone wants real money. If you are creating 20% of supply straight from thin air because you left things out from your tokenomics model before kickstarting the staking it’s not holders fault. You are forcing your holders to become donators, why not take a softer approach and at least force them to become investors.
Nobody is going to buy a token that everyone wants to sell
My understanding is that Shimmer starts much as you describe as a validating network for Iota, but eventually Shimmer will have its own path with its own governance. It could be very successful on its own. This proposal is therefore important for creating funding for a strong Shimmer community based governance long term.
If my understanding for the use case of Shimmer is correct (as a layman i could be misinterpreting)
value will be created by the demand of developers to develop on the ecosystem, hence the need to incentivize developers to build on the network.
“Once the Shimmer network uses the IOTA 2.0 consensus mechanism, holding/owning SMR tokens will be required to issue transactions in case of congestion, based on the Mana generated through SMR tokens.”
In the long run i believe the Shimmer Token will hold value.
In relation to the 20% token increase, I agree with Kchucky
“I think it’s easy … At this point Smr hast No value
So adding 20% makes no difference.
Market will decide the price.”
If I may add to that. I think the positives out weight the negatives for the 20% increase.
Reading through the comments I was back and forth agreeing with the proposal, agreeing with some of the new proposals in the comments but ultimately came to the conclusion the initial proposal by Kappy would be the most beneficial to the ecosystem.
First of all I commend those who distributed the Shimmer token in such a fair way.
Compared to the distribution models of other projects, this may seem too fair, maybe even naive for some. However I see this as a big chance of becoming a flagship model for well established communities in this space.
This a counterproposal to the proposed 20% increase of Shimmer supply.
I recommend everyone to read through the well written proposal by IOTA X-Team member Kappy:
I agree with all the points made by Kappy regarding the positive impact of a community treasury. However, I oppose increasing the supply by 20% retroactively because 20% alone wouldn’t even make us competitive and as I believe such a fund can be achieved in a more legitimate way.
Do not initialize a disadvantage
The SMR token is not publicly traded and no one can say exactly how much it will be worth. So how can we say that 20% will be enough for the ecosystem fund?
Let’s take a look at the list of prominent examples provided in the linked proposal:
If we make research on these examples, two things become clear:
All these projects have made public before that there will be a treasury which is used to attract new projects and grow the ecosystem. (In our case, unfortunately, the same cannot be said.)
We would need at least 30-50% in the treasury to be competitive.
The way I see it, we need a bigger fund, but expropriating 30-50% would make too big a ripple and even the most selfless staker would feel treated unjustly. Here one can see that the idea of changing tokenomics after investors were incentivized to accumulate IOTA to get their promised share of SMR is wrong at its core and that it only has to be a more tangible share while the 20%, at least that’s what it feels like to some of us, is a tolerable mediocrity. My thesis is that subsequent increase of the supply and be it only by one coin represents a case of injustice.
Respect the small investor
Suggesting changes is good, playing with other people’s money isn’t.
Investors bought into IOTA to participate in the airdrop, accepting to lose money owed to the market condition during the airdrop, and now should be expropriated by 20% afterwards?
If this is not dubious please imagine the same scenario with Assembly:
Asian VC’s invest in a clearly defined idea, and while their tokens are locked, the tokenomics are changed because the community wants it that way. How does that sound? It would be unthinkable to even consider it. Why is it even conceivable with Shimmer? Is the right of a small IOTA investor smaller than that of the venture capitalist?
The idea of changing such fundamentals afterwards is inherently wrong and even a referendum doesn’t justify it.
Now those who say that investors didn’t buy extra IOTA after the Shimmer announcement from november 16th, and all the tokens they received were free anyway, should take a look at the IOTA Volume Data on exchanges.
This is only the USDT pair on Binance as an example:
The volume spiking 10-20x compared to the days before speaks for itself, and the worst part is that if these people disagree with the increase of supply, and it happens, they will have to watch it with their hands tied since they do not have any fair option to market sell their coins as a form of protest but even if they could it would still be a mess. My opinion is that a subsequent increase in supply, even though it could harm the projects reputation, should only be possible on the condition that Shimmer funds are not blocked and that people are able to transfer their funds to at least trade over-the-counter, otherwise I fear expropriation.
Cause and effect and the future of crypto
Among all Crypto Communities the IOTA Community is one of the few that can proudly call themselfes OG’s as we have existed continuously for 7 years while many projects have failed. So if important decisions are to be left to such a well established community, it is important to keep in mind that future communities will likely look to us to justify their actions, which can lead to a legal vacuum if we do not act wisely. What I will say is that announcing an airdrop and then changing tokenomics while tokens are locked violates the rights of participants and not only damages the reputation of a project, but also pushes the entire space in an investor unfriendly direction where people lose trust and the big money naturally stays away from. There are things that can be voted on however some things shouldn’t be even considered like our current proposal as we have noted above increasing the supply by 20% will neither make us able to compete with the big boys, nor will those who push this proposal through retain their integrity and the longterm effect of all this might even be worse.
Don’t cheat the team, incentivize it
Having underlined the dubiousness of increasing the Shimmer Supply by (only) 20% I would like to finally bring my actual counter-proposal.
We have this status quo and it is up to us to make the best of it. To find the best solution for this problem we first have to understand the motivation behind human behaviour. The drive for our actions usually originates in one of these three points, and all of them are reasonable points as long as others are not harmed:
We do it for our own pleasure (consumption, enjoyment, prestige)
We get paid for it
We follow a higher purpose (do the good/right thing)
I think we all agree that creating an EDF belongs in the third category as we all want IOTA to succeed and many of us are even ready to sacrifice a part of their SMR stack to support such a plan and enable a kickstarter effect for the Shimmer ecosystem. But since we know that investors will get harmed financially we should probably consider including points 1 and 2 to prevent doing unjust.
I propose that we start a donation drive. Everyone who was willing to enter the 20% call should also be willing to donate 20% (or more) themselves, but since this will probably not be nearly as many as expected and those who participate might want to be acknowledged for their selfless act each donation address will receive an NFT indicating how many coins and what percentage of their stack they have donated. The amount will be represented in the form of an artifact, and the percentage donated from their individual stack in the respective color. This will have an upselling effect, let’s just imagine 4 artifacts and 4 colors resulting in 16 different traits.
(These are just random examples and numbers can be adjusted by people who have better understanding of the matter and even increase amount of traits by adding more diversity)
1-33% = Poop brown
33-66% = Shimmer blue
66-99% = Honor gold
100% = Ego death black
The official IOTA NFT will give SMR holders the opportunity to exchange their inflationary SMR into a scarce asset with utility which for example can serve as a ticket on IOTA events (like those kickoff events we already have once a year) and will give the community back a proof of contribution as OG’s before their names get drowned in the unmanageable complexity of our thriving ecosystem.
NFT holders will also be able to make votes on topics like which project will be approved to get funding.
Voting power will multiply depending on NFT colour:
Brown = 1x
Blue = 1.5x
Gold = 2x
Black = 3x
This will encourage people to donate a larger rather than a smaller portion of their stack to get as much voting power as possible.
On the IOTA Conference the artifact can give the owner different service levels:
Triangle = Free Entry
Square = Seat Guaranteed
Hexagon = Drinks 4 Free
Circle = Special Seat
This will give whales the respect for their actual amount of donation.
I think I can talk for everyone if I say that we would rather be honoured with NFT’s and owning a proof of our contribution instead of being expropriated and not receiving anything at all.
I haven’t come up with the ultimate solution, and I don’t see myself in charge of writing a master plan, but I hope I’ve been able to provide some momentum and get people to think about it and summarize what they think, and I’m sure we can come up with a great, legitimate alternative to Kappy’s well-intentioned proposal.
I only ask the IF not to rush into anything on such a sensitive topic.
I have always thought that IOTA’s reputation could have been better considering its technology.
I often feel that people have an impression that IOTA is a scam, which is not.
Probably it’s because of some events in the past.
What I would like to mention is that we need to build the best technology for sure,
but we need to build trust too from now on.
Building trust can be started by keeping promises.
I can still find ‘Limited Shimmer Jersey Genesis NFTs’ article in a shimmer blog, which has not been done.
People have bought and staked theirs for what IF has been said. They paid the opportunity cost.
Thus, I believe the promised SMRs should be given to the stakers.
I personally regard the staking as a contract between IF and myself.
If a contract can be canceled by voting, which I am against, I don’t think this is something I can trust.
It’s not that I disagree the community treasury. we can make the treasury after receiving SMRs.
There could be several ways to make a community treasury. for example, it could be using NFTs as murkser said, or making a DAO, which redistributes what has been resulted from the members’ investment.
Let’s build trust.
p.s. I hope that I wrote my opinion with proper English,
and thank you @murkser for writing the most similar opinion to mine.
As worded the current Shimmer Ecosystem Funding Proposal on Firefly could be misinterpreted. Based on reading the discussion thread, the following could help clarify.
Should we incentivize builders and activity on the Shimmer network by increasing the Shimmer token supply by 20%? A yes vote will be to give the Shimmer Community Treasure DAO and the Tangle Ecosystem Association (TEA) each 10 % of the new total supply of Shimmer tokens.
I want to start by saying thank you for taking the time to think this through and putting it forward. Regardless of the outcome, participation and ideas are very valuable.
From my point of view I see the following issues with this proposal.
Creating a fund and allocating resources to a structure that has not been agreed upon.
It is incredibly difficult for me personally to justify funding a project where you don’t even know what the project really is. I mean, yes it is nice to say we can figure out the details of governance and fund rules and management later, but that is a recipe for disaster in any serious project. Having money to give away is not a good enough definition of what is needed to approve such an entity.
Why arbitrarily fund a treasury when there are so many tokens in wallets waiting for projects to invest in?
Why not let projects ask current token owners to support their projects by issuing their own project tokens. How is that any different from going to a centralized treasury fund to ask for tokens. That in my view is true decentralization for all these small developers who may have good ideas, and it also spread the risk on inevitable scams and or simply on projects that can’t deliver.
There is no real direct skin in the game for any of us voting on what projects get funded if done through the treasury and so it will be centralized in the sense that only fund managers/voters getting some sort of management fee are incentivized to do due diligence. At the end of the day we want some sort of return to actual people if we were to choose successful projects that turn a profit. Again, nice to say we will attract great projects with lots of money just there for the taking, but let us be honest and realize most of crypto is full of scams and maybe cool projects, but not very useful or profitable projects.
A centralized structure of funding already exist under the IOTA foundation.
Real value in supply chain integration, accessible finance mechanisms, cross border fee-less transfers, safe, secure, cheap and reliable data storage, verification and transfers require a more hands-on approach like what the IOTA foundation is doing with European partners, and others such as zebra, Bosch, etc, etc. If we centralize that much money without a clearly defined framework for project evaluation, curation, follow up, etc. We will be concentrating risk and actually making the network more fragile in the long term. A few bad decisions and the treasury fund will take everyone down with them. Investing in dev projects should be something we do through voting in the sense of putting our tokens where we each consider they make a good investment.
For these reasons, at this moment my vote is no for this proposal. Again i want to reiterate that I personally appreciate you taking the time to propose this.
thank you for the time and effort, you’ve put into this counter-proposal. With much respect to that I disagree on the following points:
You say that those 20% could be way less than we will need (compared to other warchests) and then you put up an idea, that will even generate less than 20% for the treasury. That’s inconsistent.
You’ve justified this counter-proposal with the original one by Kappy being unfair to the stakers and a financial disadvantage, but
a) the funding of new projects could well attract new developers and this could raise the price of SMR. So the financial disadvantage could turn into a financial advantage very quickly.
b) the amount of the SMR token is still (even if those 20% are added) way below where it could have been if everyone would have staked back then. So the stakers don’t only get a supply that’s way below their original expectations, they additionally get a warchest to even raise their tokens value more.
Most important to me is, that this proposal would only change one „felt disadvantage“ for another. If big whales could donate that much SMR that their voice will even be multiplicated (!) in future proposals, how is that fair? We should go the exact opposite route and ask ourselves, how we can balance voting power to be fair to the whales and the shrimps. Instead this would ban the shrimps opinion into total irrelevance.
While I appreciate the incentive to be fair and efficient, this counter proposal doesn’t meet any of those goals, while the original proposal by Kappy does imo.
First of all, thats what makes Discussions worth alot - Pro/Con Positions.
But i dont agree on what youve typed here.
You mixed up funds from mainnets with a possibly upcoming fund of a staging network. Thats not fair.
20% increase will dilute everyone and not only some ppl that are willing to donate and those who dont donate will be the lucky ones that get more than “the stupid ones that donated some SMR”? So, increasing 20% is a way more fair process than hoping for some donations.
Hoping that someone donates anything for some NFTs is high risk. How will you specify the price of all the NFTs? You’ll never get 20% (of the ttl Supply!) or more from just donating for stupid NFTs with some random perks. Donating will get you - let me see other rounds - 5-10% of the total supply imo.
BUT: Selling NFTs for getting the Treasury much bigger might be an additional way to get more funds AFTER a 20% increase.
Look at all the Projects that will bulid on SMR. They are also the true OGs of SMR and will - with the right tokenomics - push the price in the 1st few months and the treasury will kick in in some specially voted cases.
More funds doesnt mean more sustainalbe Growth. Just spending 300m USD on something doesnt mean that this is really worth it. Look at the projects on FTM or AVAX, there are so many projects that just did and will do a money grab seeing such arbitray numbers. The Key is to use the funds wisely and not just having 4bn USD.
It’s true that with only donations we would probably not get as much as we would get by just creating 20% out of thin air, but as I said I did not come up with a masterplan.
To expand this approach we can for example, depending on how much we received in round one, launch a second round with financial incentive and implement a game theoretical approach by assuring shares of projects that make use of the fund and giving those who donated in the first round 1.5x in return of their donation while people who donate in round two only get like 1:1 of their donation. This will animate people to rather invest in round one, and maybe we get so much that we won’t need a second round.
For the system in round two we could copy Kappy’s approach (even though I would not agree on that) but this would give people who want to donate for the EDF anyway give their well deserved Bonus (if they will donate in round one).
I think this is a good point but I would think that through a couple of times.
Only because technically the supply could’ve been much larger if all IOTAs would’ve been staked doesn’t changes the fact that we had clearly defined rules from the beginning and the size of the supply is the result of these rules and our plan would still be breaking those rules which represents a case of injustice.
I think you misunderstood my point. The mulitplication depends on the share of your whole stack. If someone is so greatful and donates 100% then he will have 3x of his voting power no matter if fish or whale, so if a whale want’s to increase his voting power by x times he needs to sacrifice the same percentage as a fish although the actual amount is much higher.
We won’t distribute the whole fund in one day so there is no need to rush and the first donation round will give us a time buffer where we can come up with greater ideas or even feed the fund with tokens coming from inflation to increase the buffer.
These are just random ideas and should serve as an inspiration for those who read.
You mean the Assembly example? Why is that not a fair comparison?
Please imagine this and tell me if this sounds fair to you:
A major is advertising for it’s city and offering houses for a great price to incentivize people to move to that city.
Everyone of us bought a house in this new established city.
Environment and infrastructure is good but on day one we don’t have lot’s of businesses there to bring life into our city. So we force everyone to give away 20% of their houses living space to those businesses so that they can work on their products and services and therefore attract more people and businesses to come to our city.
The idea of attracting people and businesses is good but the way it should be done isn’t.
Besides the fact that our city has superior infrastrucutre and many new businesses will come anyway without needing to attract them with free living space we can still ask our citizens to give parts of their houses to those businesses if they wanted to - which will result as a winwin situation but everyone can choose on their own.
We do not only give everyone the choice to offer from what is theirs, we can also reward them financially afterwards (read the game theoretical approach from my answer to Stone).
Only because the major of our city did not plan well, it’s citizens should be expropriated? This doesn’t sound really fair to me and has communism character…
We do not have a price for the NFT. Anyone can donate as much as he want’s and depending on the donated amount the donator will get an NFT with it’s respective trait. You can basically read the donated amount through combination of color and artifact (this will have an upselling effect).
Flip it bro! - Let’s start with donations first and then afterwards depending on how much we received incentivize for round two or even make use of Kappy’s approach to get a 30-50% fund. This would be a compromise and would at least give us a little more time to maybe even think of a better solution.
I agree but we have to measure with something and to have a fund which is financially competetive we would need 30-50%. What you say can also be an arguement against a fund.
thank you for your reply. Please let me place my thoughts.
I know where you want to go with this but I’m not sure about the route you are taking, since those 20% (or more) and equality among the holders would be hard to obtain. But maybe this is a good start for a discussion. Let’s see if anyone joins in.
There are obviously two perspectives to view this, when disregarding the genuine purpose of Shimmer being a staging network for IOTA:
a) The general one, that’s insisting on playing by the rules that have been set up back then. Priority: Compliance.
b) The pragmatic one, that’s only oriented towards the outcome (more token don’t mean less value). Priority: Maximum profits.
Both perspectives are relatable but in the end one probably prefers 80% of a more valuable token instead of 100% of a less valuable one. It’s all about priorities.
You did mention the percentages but also fixed amounts. Sounded to me like you are proposing a mixture of both parameters in order to determine the final NFT. That wasn’t what you’ve proposed?
And if you didn’t: How to prevent whales from splitting up their funds into several wallets? If they are depositing 1% of their coins to a new wallet, it’s easy for them to get the „ego death black“ status and after obtaining the multiplication NFT, they could sent their token back to that wallet. Maximum voting power for 1% of their funds.
But still I get and appreciate your point of view. Thanks for sharing. That’s valuable food for thought.
I don’t see why point “a)” should exclude point “b)”. We can have both.
I agree that the 20% approach is pragmatic and it’s good to be pragmatic if the core idea is good. However, if the core of your acting is wrong then being pragmatic makes it only worse (Nazi’s in 1936 were pragmatic too).
I am 100% in favor of the EDF, but just because we get this fund doesn’t mean we will be successful with it, the outcome won’t be clear and forcing this at all costs I think is wrong.
Exactly this was the idea regarding the NFT’s. This will have an upselling effect like imagine you wanted to donate 20% of your stack but then you see with 13% extra you can get the Shimmer Blue trait and if you have 150k MSMR in total the 33% would be like 50k than you only would have to add up 19k to go from Triangle to Square trait.
So we’ve gone from the Poop Brown Triangle to the Shimmer Blue Square, and in this particular case, this person has donated 40% himself instead of 20%, without expropriating anyone, without harming anyone, just by incentivizing and allowing people to trade in their inflationary SMR for a scarce asset (which has utility and honors the owner and more)
We don’t need to enable the transfer of SMR tokens for users to exchange them for an NFT within the wallet, so that won’t be a problem at all. I don’t know how many wallets hold SMR, but if we limit the total number of NFTs to let’s say 10k, we can artificially increase the psychological demand even more.