[Discussion] Proposal to Increase the Shimmer supply for a Community Treasury

✍ General Governance Shimmer - Net
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Shimmer will be the first Layer 1 network in the IOTA ecosystem with a powerful native asset framework and smart contract capabilities that are fully EVM-compatible. The opportunities offered to token holders and community members with Shimmer are limitless (as is boldly advertised on the Shimmer website). We are finally able to create real token utility and use cases that go beyond simple payments or data integrity. Shimmer will become a vibrant dApp ecosystem for Decentralised Finance (DeFi), NFTs, GameFi and much more.

While there is a lot to be said about the opportunities offered by Shimmer, we also have to talk about the responsibilities that are on our shoulders as members of the community. Our dependency on the IOTA Foundation as the only entity pushing the ecosystem is already starting to diminish with more ecosystem projects that are launching new dApps, services, infrastructure and tooling. But we can take this a step further and accelerate the decentralization of Shimmer and the growth of its ecosystem. We should aspire for Shimmer to be the leading community-governed L1 network.

There is no denial that Shimmer is late to the L1 wars. There are already several well established players with large ecosystems and marketcaps. However, we have several key advantages over other competitors. For one, we already have a really large and dedicated community (thanks to IOTA) with a growing number of teams building dApps, one of the leading DLT teams (the IOTA Foundation (IF) really does deliver great tech at an accelerating speed) and a technology stack that offers feeless tokenization on L1, EVM-compatibility, MEV-protection, and a technical roadmap to scale multi-chain with Assembly and IOTA 2.0. Our biggest advantage however is the fact that we are an emerging dApp ecosystem, and everyone knows that the biggest opportunities in Crypto are at the launch of a new smart contract ecosystem. Shimmer will be able to fully leverage these opportunities, and we as a community need to come together to maximize the chances of success.

In order to launch a successful ecosystem I believe we need to have three key ingredients:

1. Novel technology stack, with full EVM compatibility (Check - we have a very unique L1 native asset framework and the ShimmerEVM on L2. In addition, Shimmer has a very compelling technical roadmap thanks to IOTA 2.0, L1 smart contracts, ZKP etc. - Shimmer, together with IOTA, will be able to compete with the established players).
2. Large community and builder ecosystem (Check - there are over 30 dApps already committed to launching on Shimmer, and that is without a testnet. There will be many more to come! And the IOTA Community is one of the largest and most amazing communities in Crypto)
3. Token supply with a community treasury to incentivise and fuel growth (<— This is the only thing I believe we are missing right now).

Assuming that the genesis of Shimmer is still some months away, we, the community, are empowered to come up with proposals to shape the future of the Shimmer network and its ecosystem. I am here today to bring you a proposal on how to leverage the token supply of Shimmer to increase our chances of success in the highly competitive crypto market.

Don’t hate the players, learn the game

2021 and 2022 were the most successful years yet for new Layer 1 networks (Solana, Avalance, NEAR, Harmony, Fantom, etc.). While their technical superiority is debatable, what is clear is that all of them have followed a clear pattern - we could call it a playbook - which significantly accelerated their growth and successes in the market.

The playbook is pretty straightforward:

  1. Launch a new token, with 30 - 50% of the tokens in a treasury controlled by the founding team / entity
  2. Grow the community and ecosystem with grants and big incentives. Oftentimes the founding team even built some of the initial DeFi dApps themselves (DEX, Lending, Bridge, etc.)
  3. Token launches with low circulating supply on centralized exchanges
  4. The native token is locked up either through staking, or in the DeFi ecosystem (e.g. LP on a DEX)
  5. After the network and ecosystem has successfully bootstrapped and the native token has enough liquidity on CEX and DEXes, the founding team begins to on-board key liquidity partners (most of the time large crypto funds)
  6. As part of the liquidity initiative, native tokens are sold from the treasury of the founding team to investors at a 50 - 80% discount with a 2 - 3 year lockup. Usually these are very big funding rounds ranging from $100m up to $500m.
  7. These funds from the fundraiser are then reinvested into the ecosystem as part of a grants program, or simply used in the treasury
  8. Lastly, massive incentive programs are launched for bridging assets to the network with on-chain liquidity incentives, grants, etc. Again, these tokens usually come either from a DAO or the treasury of the founding team.

Just to provide you with some references on this:

These are just some of the most prominent examples, there are many more of these incentive and ecosystem growth programs done by L1 and L2 networks. While the effectiveness of some of these incentive programs is highly debatable, most of them have helped to massively increase the tx volume, users, use cases, TVL and ultimately the value of the ecosystem.

Just looking at the address growth of Avalanche, which directly coincides with the launch of their incentive program and the on-boarding of new liquidity partners (Three Arrows Capital, etc.). This also coincided with a large increase in the value of the ecosystem and token price.

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What is clear is that if Shimmer intends to compete in this league, we need to come to the fight equipped with more serious firepower. Instead of hating the players, we should learn the game and execute better than the competition. We have a lot of data on which incentive programs work and which don’t, so we can more quickly adapt to our competition and their failures.

As it stands right now, Shimmer is not able to support any of these activities as there are no token reserves available and there is no ShimmerDAO or Treasury. Looking at the Foundation wallet, they only hold 1.7% of all Shimmer tokens - clearly not sufficient to fund such activities.

Proposal: Increase the Shimmer Supply to fund the Community Treasuries

Shimmer was a fair token launch, with 100% of Shimmer tokens going to IOTA token holders that staked during a 3 month period. Shimmer is meant to be a community project

The proposal for discussion is pretty simple: Let’s increase the Shimmer supply by 20% to set up dedicated Community Treasuries to accelerate and foster the ecosystem growth of Shimmer.

Old Token Supply: 1450896407 SMR

New Token Supply: 1813620000 SMR

As part of this proposal, we would send half of the new token supply to the Ecosystem Development Fund (the Swiss Foundation) and half will be reserved in a DAO.

Entity Token Allocation Purpose
Ecosystem Development Fund (Swiss Foundation) 10% of token supply (181361796.50 SMR SMR) Having a dedicated entity with a proven track record manage the Shimmer token supply is really key to our success. As such, the Swiss Foundation is a perfect candidate to be the custodian of these assets to represent the best interest of the community and can act in the immediate term whilst the Community DAO is set up.
Community DAO 10% of token supply (181361796.50 SMR) In preparation to the IOTA CommunityDAO, and in order to fully decentralise Shimmer, we will have our own treasury that will be fully governed by the community.

While it would be great to already now have a fully decentralized setup, I think that we will need a treasury that is managed by multiple entities with different goals. The Ecosystem Development Fund can be a legal entity managing the Shimmer tokens, while the Community DAO will be a fully decentralized treasury governed by the community.

As I understand it, the IOTA Foundation is currently in the final phases to setup a new Swiss entity which is tasked with distributing grants to the community. This entity would be a perfect vehicle to keep part of the Shimmer token supply in custody and manage them effectively by on-boarding the right partners. Nobody in our ecosystem has as good connections to investors, funds, exchanges etc. as members of the IOTA Foundation. We should therefore give them the necessary tools to do their work even better. We do need to have a serious conversation about the governance of this entity and the community involvement in it.

The community has done tremendous work in the past few months to set up several DAOs and get more experience. Many of these DAOs are still in the early stages though, and overall we as a community still need to better learn and experience the world of DAOs. Therefore I think it is really important that we properly define how the 10% of the Community DAO can be managed by the community (e.g. yearly budget). I am sure that we as a community will come together to discuss the best approach forward for such a DAO.

Considerations

I appreciate the complexity and potential even controversy in this proposal. We need to carefully weigh the pros and cons to make the right decision here. The below is a list of considerations from my point of view.

Consideration 1: We want Shimmer to be a competitive player in DeFi. We need financial incentives to attract and support builders and TVL.

We now have the first DeFi ecosystem in front of us, and it offers great opportunities for builders, token holders, speculators and community members. The only way in which we will be able to attract the best builders and DeFi teams is by offering them the right incentives and support. We need to have a dedicated community treasury to be able to offer these incentives and ecosystem support. Without it, we will not be competitive.

TVL and builders will only come if they are offered with the right opportunities and incentives. While there is certainly mercenary capital that will enter our ecosystem through these incentive programs, we can certainly define ecosystem support programs that will help to attract long-term investors and valuable builders.

The programs that we can set up through a dedicated treasury are plenty (TVL incentives, Bridge incentives, Grants for builders, investment programs, etc.) and we can learn from our competition on what worked and what didn’t. It is obvious however that we will only be truly competitive with additional incentives.

Consideration 2: The Shimmer supply is already lower than IOTA’s because of unclaimed funds

This is a very important consideration that is overlooked by many. The Shimmer token supply today is 1,450,896,407 SMR vs. IOTA token supply of 2,779,530,283 MIOTA. This means that Shimmer is only 52% of the IOTA token supply today.

Why is that? For one, because around 11% of the IOTA token supply has still not migrated to the Chrysalis network (most likely, these tokens are lost forever and will be voted on soon through a governance vote).

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Second, at peak, the staked IOTA tokens reached some 75% of the migrated token supply. This means that at most, only 1.86 Pi IOTA tokens were staked for Shimmer. Of course this number is less, as token holders did not stake for the entire 3 month duration.

Therefore, even if we increase the Shimmer token supply by 20%, it will still be way below the token supply of IOTA.

Consideration 3: DAO test trial for the community DAO on IOTA

We need to DAO it! All of us agree that DAOs are the future and that IOTA, Assembly and Shimmer should become leaders in building and operating DAOs. The unclaimed tokens of IOTA will soon be put up for a vote to decide whether to burn those tokens, or to send them to a dedicated community DAO. Considering that Shimmer is a staging network meant to experiment and try out new things, it offers us a perfect opportunity to trial run our Community DAOs.

Consideration 4: Only through a treasury will we achieve decentralization

Quite an important but obvious point. We as a community need our own Treasury in order to successfully decentralise the ecosystem. We need to remove our dependency on the IOTA Foundation and be fully independent in funding and growing our ecosystem.

Consideration 5: There are limits to DAOs, and we need legal representation

There are limits to what can be achieved with a DAO and we should not rush into the mistake of setting up a dedicated DAO which is then badly managed or incapable of effectively allocating funds. We need to have a “legal wrapper” for the DAO to be able to sign agreements and also shield ourselves legally.

Consideration 6: The Ecosystem Development Fund is the best legal entity we have to represent our interests

The new Swiss Foundation (Ecosystem Development Fund) which is currently being setup by the IOTA Foundation is the perfect entity to represent the interests of Shimmer. For one, this entity will have far fewer restrictions than the IOTA Foundation or the German EDF, and second, it is obvious that the team managing the Ecosystem Development Fund and the IOTA Foundation represent the best interests of Shimmer. After all, they are the main builders behind Shimmer and IOTA.

I believe that a crypto or venture fund would only sign a legal investment agreement with a team that they trust and know. And it’s obvious that the IOTA Foundation has the best connections and reputation in our ecosystem.

What we as a community should discuss is how we can get community representation on the board of the Ecosystem Development Fund, and how we can also get a lot more transparency on how the Shimmer tokens are managed.

Conclusion

I firmly believe that this is an important decision that we as the Shimmer community can make now to significantly increase the chances of success of the Shimmer. Ultimately, this will need to be voted on through a governance vote in Firefly.

There’s still many unanswered questions which we as a community need to come together to discuss, such as what will the requirements be for projects to secure funding and what type of funding should we provide (grants/liquidity/investment etc). One advantage we have in being late to the L1 game is that we can learn from others’ mistakes, and over the coming weeks I would implore everyone to join the discussion on how we could make the most of the ecosystem funding should this proposal pass.

The time to act is now, prior to the token being launched. I strongly encourage everyone to get involved in this discussion, let me know what you think! Let’s discuss how we make Shimmer a competitive L1 smart contract network. We should strive to make an impact and be part of the Web3 movement to disrupt the inefficient, non-transparent legacy systems which plagues our world today.

Let’s make a difference!

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I would even go further and double the amount of tokens that are supposed to create incentives. IOTA or Shimmer is lagging behind. In order to catch up with the others, this will not work with equivalent incentives. More must be offered.
Of course, it dilutes the amount of tokens a bit. But I’d rather have a few very valuable tokens than a lot of worthless tokens because they’ve missed the boat.
The only open question would be: when will the shimmer tokens be launched?
greeting
Bitcoin meeting place
Ich würde sogar weiter gehen und die Menge der Token, welche Anreitze schaffen sollen verdoppeln. IOTA bzw. Shimmer lauft etwas hinterher. Um den Vorsprung der anderen aufzuholen, wird dies nicht mit gleichwertigen Anreizen funktionieren. Es muss mehr geboten werden.
Natürlich verwässert es die Menge der Token etwas. Aber ich bin lieber im Besitz einiger sehr wertvoller Token als vieler wertloser Token, wil diese den Anschluss verpasst haben.
Die offene Frage wäre nur: Wann gehen die Shimmer Token an den Start ?
Gruß
Bitcoin Treffpunkt

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Could it be possible and a good idea that, as the incentive funds need to be available as soon as possible, we divide the Shimmer inflation by 2 (or another number that fits better) and used the remaining Shimmer token right now to fund DAO/treasury?

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Really great idea!
In hindsight, the approach the IF took with the NFT sale wasn’t that bad.
Just that the NFT sale is to be paid for with Shimmer Tokens.

The funds can then build on your idea with the 1:1 split between the DAO and the foundation.

That would avoid token expansion.

The approach would also strengthen the decentralized nature of the IOTA & Shimmer ecosystem, as each holder has the chance to become part of fund-raising and growing the ecosystem.

However, the incentives in the NFT sale should not be overly strong.

Possibly a staking increase of a few % for a period of 12-24 months as well as a right to participate (voting rights) in the Community DAO.

This would also guarantee a later resale of the NFT if the Shimmer ecosystem should grow strongly.

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Thanks Kappy!!!

We believe that with Shimmer we have a unique opportunity to build an entirely new ecosystem with such an amazing community and technology. This proposal is taking a comprehensive macro perspective on very successful strategies from other ecosystems and competitors - We should learn from them!

We have to be conscious that if we want to play in the top league, we need the right resources to do so. Instead of focusing only on our own bubble, let’s look at the whole game, master it, advance it, and do it even better than the competition.

Utility brings value. As other ecosystems have demonstrated, such funds are the necessary fuel for ecosystem growth. Smart money is being channeled into successful protocols that create utility for SMR and attract new long-term users.

Therefore, we believe it is an exciting proposal that could be of great benefit for our new emerging ecosystem.

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For more examples of effective incentive programs:
DOT
https://cryptoslate.com/polkadot-dot-founder-announces-774-million-development-fund-for-defi/
Terra
https://cryptopotato.com/terra-to-deploy-139-million-in-defi-projects-to-enhance-ust-use-cases/

All of the major players are utilizing large-scale incentive programs. I think this is a fantastic proposal and should be voted on prior to launch. The ability to kickstart the ecosystem with legitimate financial incentive will be essential to its success.

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Thanks Kappy for this very well thought and promising proposal.

I fully support this and looking forward to be able to vote on this.

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Also, you make an interesting point when you say « some of the early dApps are built by the project themselves ». Maybe we can extend this proposal to the IOTA treasury vote to allocate a part of unclaimed IOTA to a dedicated team that would build such dApps ( we already have very pro missing community built dApps, but maybe the more the better ? Like open source dApps that can serve as template on how to build on IOTA ? )
On a side note: i think such « foundation dApps launch pad » would work maybe even better that a « marketing fund » . The product would basically speak for it self. A few good yields and you don’t need a single add campaign , it would be organic. Pair this with seriousness the IOtA foundation has demonstrated with Firefly ( best wallet out there ) and you get a pretty good winning combo I think.

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Thanks for the great write up Kappy. Attracting liquidity from other ecosystems via incentives is a good idea and IOTA has a lot to offer to keep that influx of liquidity inside our ecosystem. Looking forward to seeing this being voted on.

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Absolutely agree that strong incentives are needed for the growdth of the eco-system. This is something IOTA was always lagging behind - eventhough IF always gave some incentives, these were never competitive in relation to other ecosystems.

It doesnt matter if IOTA is a better tech than other blockchains - if developers don’t have the right incentives they won’t find that out to start with.

I completely agree this should be voted and passed.

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Hey Kappy,

Thanks for providing this well thought out and considered proposal. As a shimmer holder who has been supporting IOTA since 2017 I would support this proposal…even though it will dilute my holdings.

As you state in the proposal it is critical that we have the right incentives in place to attract Devs to Shimmer, this is more important now that many L1’s are established.

A couple of thoughts:

  1. Devs can be fickle and we can use this to our advantage. They love to work with new tech and will jump over from their existing platforms, but only if the incentives are there.
  2. If an incentives fund is established it needs to be be managed more successfully than the IF has done so previously with IOTA grants. I’m a big IF supporter but we have to face facts. The IF funds have been a disaster in the past - slow, overly bureaucratic and too restrictive. It’s no use having a fund and then not awarding grants. That only serves to annoy and disengage the community.

Thanks again,
Hackney Crypto.

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Nice proposal, well-supported. Can’t give a personal verdict yet but looks good tbh. Ecosystem needs some boosting and this is definitely one way to accomplish that.

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I sympathise with your proposal and yes increasing the supply by 20% can help to boost.
the quality and amount of impacts needed. But which entity guards, decides and controls the
process . You gave some first thoughts on connceting it to the Swiss EDF but it to me would need and own independent legal entity and clear definete rules to operate and decide a DAO alone is legally
not capable to act accordingly. This needs to be discussed and solved beforehand.

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Hey Kappy,

Thanks a lot for your proposal.

In the following I want to lay out the joint opinion formed by the TangleSwap crew after having quite a few intense sessions & discussions on the matter.

We fundamentally share the sentiments laid out above: IOTA and by extension Shimmer are late to the Layer 1 Wars and thus have to find other paths & outlets of making up for this.

The root cause of the above-mentioned issue is — quite ironically — that IOTA was a front-mover and very early in establishing a proper governance structure by setting up a German non-profit foundation in 2017 and seeking — in hindsight — only a very moderate amount of funding by way of community donation. Had IOTA, with its very bold & ground-breaking ambitions, launched with a different timing, the funding opportunities available to the IOTA Foundation and by extension the ecosystem might look completely different.

That being said, no matter the outcome of this battle the war is far from lost. The technology currently being spearheaded by the dedicated members of the IF has the potential to fundamentally alter the way the mainstream uses and views cryptocurrencies and distributed ledger technologies. Those who recognize this form part of the ever-growing IOTA ecosystem & community. The above is why we are here, why TangleSwap & many other applications are being built on top of IOTA and why — ultimately — you are taking the time to read this right now*.

With that in mind, we would like to highlight one last fact before delving into the pros & cons of this proposal. As we laid out above, we have seen that being a little late to the party can counter-intuitively pay off in the end: let’s prove it was actually the other Layer 1s that were too early and raise the bar for an all-new level of funding & ecosystem involvement.

The groundwork for that is being laid by the IF as we speak. It remains on us, the builders, the community as a whole and each one of us individually to determine how to best use this groundwork and leverage it to become the leading Layer 1 platform in the crypto space.

Besides letting the tech speak for itself — which it will — we wholeheartedly concur that we need more efforts allowing us to give a proper kickstart to the ecosystem. The way we see it, the IF is currently building one hell of a rocket. What is very much needed is a sufficient amount of fuel to get this IOTA rocket into orbit. From there, we have no doubts about that, this thing will fly itself! :blush:

While we are going to take a closer look at your proposal, Kappy, in the following, we feel the devil does actually not lie in the details, at least not at this stage of your community proposal. Let us instead focus on coming to a common understanding as a community on whether to go through with this at all or not.

The gist of the governance proposal laid out above is an increase of the Shimmer token supply in favor of increasing the amount of funding options available to the ecosystem. The suggested supply increase is 20 %.
Let’s take a look at the apparent downsides of this proposal first.

The Cons

A supply increase will result in a corresponding dilution of current (rather: soon-to-be current) SMR holders. Everyone’s tokens will — ceteris paribus — lose 20 % in value. This might be particularly detrimental to those who specifically bought IOTA tokens under the promise of a certain value proposition, which included a certain supply.

While an argument can be made that not all IOTA were staked during the relevant 90-day period and as such the total SMR supply is not as high as it could have been, the point stands: an increase of the token supply now could be seen as a direct contradiction to the “ground-rules” laid out before the staking period and as such an affront to those who were counting on these rules being respected. This leads to a second downside, which has already found itself voiced by many concerned individuals within the community: a decrease of trust in the IF, the community or whomever ultimately responsible for breaking the perceived rules of the game.

Lastly, and we believe this to also be a valid point of view, the question arose of why we need a “semi-centralized” entity to take on the ecosystem funding when the community participants might very well themselves be able to use their SMR to fund and support up-and-coming dApps, content creators or other projects. This way, after all, everyone is free to make their own decisions by using their own tokens to fund projects based on their own evaluation and criteria. Is this not equal or even better than the proposal laid out above?

The Pros

Not necessarily! There are several advantages that come with the proposed token supply increase.

Firstly, there is an argument to be made that there are a significant number of investments that individual members of the IOTA community might not be able or willing to undertake, allowing for a more formal and in that regard — centralized — committee, legal entity or DAO to fill that void. This not only includes seed and pre-seed funding rounds of promising projects that have yet to demonstrate their full potential to the broader community, but holds especially true for “common goods” within our ecosystem that might not directly appeal to individual investors.

An even more important factor might be the amount of value derived from effects that go beyond the actual funds provided by the supply increase. These are most notably marketing and network effects from launching ecosystem-wide funding initiatives and campaigns. “Lots of individuals on IOTA looking to invest” is simply not bound to make Coinmarketcap’s headline of the day.

Lastly, and this might seem trivial but should be carefully considered as a strong indicator for this proposal: we have seen such moves work for other protocols. As such, they have not only become a de-facto necessity in trying to keep up with an enormous amount of capital that other ecosystems can provide, but they also show a great amount of promise based on the perception and actual results observable in other ecosystems.

Our Opinion

Ultimately, everything boils down to this one question: do the benefits derived from the supply increase outweigh the downsides?

Considering everything laid out above, we think they do, which is why we are in favor of the SMR supply increase. Nonetheless, we are also very aware that a relevant number of community members do not share our final verdict on the matter.

We feel very strongly that what we cannot afford at this crucial moment is a proposal that splits the community. Being able to rely on a large, vibrant and loyal community such as IOTA’s comes with an immense amount of inherent trust and a responsibility to uphold that trust above all else. As such, we believe a solution must be found that can unite those in favor and those to whom the downsides currently outweigh the benefits.

As the biggest perceived downsides of the proposal are the effects of the dilution of individual SMR holders, we believe we must find a solution that can eliminate or at least highly mitigate these direct economic consequences to SMR holders.

We believe to have found such a solution, at least on a high level. The details remain to be discussed and worked out by all of us.

The TangleSwap Proposal

Let’s go through with the supply increase and let’s keep it at 20 %. We believe this number set forth by Kappy above represents a middle ground of allowing for relevant funding opportunities while keeping dilution at a reasonable level.

While we truly believe the benefits brought to the ecosystem through this proposal will indirectly make up for the downsides, we believe a direct value proposition to SMR holders voting on this proposal is further needed to onboard even those sceptical of the supply increase. We propose this direct value proposition to be a prevalent (i.e. applicable to the very majority of cases) funding mechanism that directly benefits SMR holders by requiring projects incubated by this funding to airdrop a certain amount of their token supply to SMR holders. The relative amount of tokens to be airdropped could be tied to the (relative) amount of funding supplied by funds derived from the SMR supply increase.

An additional cherry on top from a game-theoretical perspective could be rewarding only those SMR holders via airdrops that voted in favor of this governance proposal. Whether this would be an optimal approach from a long-term perspective would remain to be discussed though, as there are valid arguments to be made against tying these airdrops to SMR held at the vote and what was voted. This is — by all means — not a necessity within our proposal.

We are more than interested to hear everyone’s thoughts on the matter and on our proposal. We sincerely hope this proposal might be able to convince even the remaining sceptics, while keeping all the benefits of the original idea. Only united can we — the IOTA Community — emerge even stronger from this.

It has become apparent that one thing is as true for DLTs as it is to maintain our healthy and vibrant community for a long, long time to come: We need consensus.

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In order to make a good assesment, I think we need to know something essential from the IF. Why does IF had not organized the token supply like that in the beggining? I could not imagine they did not thought about it so there is for sure some reasons they did not went that way. Perhaps those reasons remain fully valid. Please IF let us know in order to help the discussion

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As much as the proposal might hold merit, i do not believe that changing the SMR amount is a good idea, for the reason that it opens the door for SMR amount changes at any point in time and proposals to change the inflation rate at any point in time. Why would this proposal be the last proposal that should be taken under review. It means that i as an investor cannot be certain of fundamentals of the investment. I agree it might be a missed opportunity, and a 20% additional stack as a development fund might be beneficial (though the selling of the allotted funds will drive the price down). It also means that the trustworthiness of token creators is reduced. This weighs heavier then the missed opportunity in my opinion. There must be other ways then increasing the supply to form a community treasury.

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Thanks for bringing this up. Very important to talk about and excellent ideas from everyone.

A possible solution is having two entities, a centralized body which is transparent has strict criteria to access and is overseen by a legal body. This entity is essentially a grant system and can be accessed by bigger players who are going to build/ significantly value add to the space, as well as go through the slower/ longer & more arduous but important grant application process essentially like any government grant you go for.

Another entity is community driven and essentially acts as an opt in (see tangleswap proposal) where the people who opt in to the DAO, donate some of their shimmer and are rewarded in kind with airdops/ token access as well as a vote in who gets access to the treasury.

One issue which needs to be kept in mind with onboarding particularly quickly is that if it is performed poorly and the funds are spent without good forethought you will end with the typical crypto boom bust cycle. A whole heap of hype with limited infrastructure because you are throwing tokens at people to onboard them will likely be worse for the platform than slow organic growth.

Another factor to consider, is it is important to onboard developers but it is equally important to onboard users (obvious I know) but if you get a whole heap of builders with no end users both will die off.

Better to build something that works, let there be natural ecosystem growth and let the platform gain some momentum on its own. Bigger players who need access to funding can go through a grants process and the smaller teams can go through the community DAO.

If the IOTA tech is as good as I believe it to be people will onboard themselves.

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I’m strongly in favor of the TangleSwap version of Kappy’s proposal. But I worry that if it passes a vote, that those who voted against it will feel cheated, or lose trust, or simply feel like the community is leaving them out.

How can we make sure the community stays together and stays strong?

What about a game theory style adjustment to the TangleSwap community airdrops proposal that somewhat compensates the No voters if they lose? A 20% bonus multiplier on the airdrops. So if the community is getting Y, No voters would get 1.2×Y.

How might this affect the vote?

Pros:

If it passes it will have been passed by those who are enthusiastic enough about it to forego voting no just to get a possible boost.
Since fence-sitting voters would be more likely to chance the No vote hoping for the 20% boost, if the vote does pass it means it passed with a strong community mandate.

If it passes then those who voted No will receive some compensation from the rest of the community.

No voters would also understand that the community cared enough to do that, and hopefully that kind of good will is especially meaningful. It builds trust and inclusion even through disagreement.

No voters might also feel better knowing it wasn’t a close vote determined by casual voters going along with the crowd or uncommited voters selfishly looking for airdrops. Since those categories of voters would more likely vote No while hoping Yes in order to get the boost.

Cons:

It’s harder to implement.

There’s another layer of stuff to agree on, like the boost amount.

If you’re for the idea this makes it harder to pass the vote as there is an incentive to vote No while hoping Yes.

People committed to the proposal get less rewards than people who didn’t want it. (Although maybe that shows they’re more committed to the Community and so many would be OK with that?)

The boost would probably have to have some kind of time limit agreed upon and implemented. For the first 2 years maybe?

–

This approach isn’t something I’m strongly pitching here. But it seemed interesting enough to think about and maybe worth more discussion?

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Typically, if someone were to start a project, they would mint their tokens and launch a presale to raise funds. Then they would use part of the funds to fund their operations and put a part of it in the liquidity pool. As project makes money, they will distribute part of the profits to token holders and use the remaining to grow and create more employment.
Why do IF need more Shimmer for this?

Moreover if this proposal gets approved, who will decide which projects to fund?

I would not like IF to decide these things. I would like the projects seeking funding to guarantee that they will create a certain number of jobs for community members.

One problem I see is people will buy the tokens which secure funding. This may reduce interest in other projects.

I want IF to stop interfering. Shimmer was supposed to be up to the community and now already IF are asking for tokens so they can selectively support certain projects. Reject this!

IF quit Shimmer. Go away!

3 Likes
20

Make a second vote, after the buidl one: buy with those 50Ti (or half) 10% extra supply of shimmer token.
At 25 Mio$ would mean 250 mio $ valuation for shimmer to start with. From community treasury to community treasury

4 Likes