With the end of the Shimmer staking period, the total supply of 1450896407249092 (or 1.45 quadrillion) Shimmer tokens was minted. This supply represents around 60% of the total supply of IOTA (which has around 2.7 quadrillion). With IOTA we have introduced the scientific notation to make it easier for token holders to know how much they held in Ti (TerraIOTA), Gi
(GigaIOTA), Mi (MegaIOTA), etc.
Shimmer token units and notation - should we change it?
Shimmer is an incentivized staging network that gives our ecosystem early access to exciting new protocol features on L1 and L2, while helping to battletest and find potential bugs. The network offers us a testbed to experiment both on application layer, as well as on the native protocol. As part of this, we are also able to deviate from current design decisions made in IOTA to help find more optimal solutions. The very first discussion I would like to raise to the community today is the Shimmer token units and its notation.
The Memecoin Dilemma: With a supply in the quadrillions, the price that is available on exchanges will be in the millions of a cent. At a $10m market cap, 1 Shimmer token will be equal to $0.0000000069. While there are some interesting research papers on how lower exchange prices can lead to more significant price developments (that’s why all the Memecoins do it…), having such low prices introduce significant problems for all user facing applications.
Important things to note:
- The base unit should always be SMR. We do not want MSMR / mSMR be the unit of exchange.
- This is primarily a user facing issue. The total supply in the node software will stay the same. It is only a matter of how the wallets, exchanges and dApps display SMR, and the base unit they all use.
- None of these options will require any token migration or changes by the token holders. It will all be done client side.
- The below pros / cons are non-exhaustive and my personal opinion. Please share your thoughts below.
Option 1: Scientific notation (just like in IOTA)
Pretty straight forward, similar to IOTA, we would introduce TSMR (Terra Shimmer), GSMR (Giga Shimer), MSMR (Mega Shimmer), KSMR (Kilo Shimmer). In this situation, same as with IOTA where MIOTA is traded on exchanges, we would also have MSMR traded on exchanges.
The smallest possible unit of SMR will be 1 SMR token. This should make it easy for anyone to correctly transfer and accept SMR tokens.
The MSMR token supply would then be 1450896407. You can find an example table with the price at certain market cap levels below.
| Market Cap | Token Price | Token Supply |
|---|---|---|
| $10,000,000 | $0.0068922908 | 1450896407 |
| $50,000,000 | $0.0344614541 | 1450896407 |
| $100,000,000 | $0.0689229083 | 1450896407 |
| $250,000,000 | $0.1723072707 | 1450896407 |
| $500,000,000 | $0.3446145415 | 1450896407 |
| $1,000,000,000 | $0.6892290829 | 1450896407 |
Pros:
- Units are the same as with IOTA, so people familiar with IOTA have a known system to work with.
- Price will start relatively low, but should be no problem to display the price easily on user interfaces.
Cons:
- High chance that MSMR will be listed and traded everywhere. Something which we really don’t want.
- It’s confusing what the true “SMR” token then is (see problem above, MSMR vs. SMR). We want SMR to be accepted everywhere, but a Million SMR is the base unit. Is it 1 Million SMR tokens, or is it 1 SMR token?
Option 2: Introduce decimals
This option builds on the idea above, but instead of having a Million Shimmer tokens (MSMR) as the base unit, we introduce decimals. While the total supply of Shimmer will stay the same, we would have decimals and make 1 SMR the base unit in all user facing applications.
You can think about this as a reverse stock split. In this example, if you hold 100 000 SMR tokens today, they would become 1 SMR token.
For example: 100.000 Old SMR = 1 SMR token
New total supply: 14508964072,49092
Smallest denomination: 0.00001
| Market Cap | Token Price | Token Supply |
|---|---|---|
| $10,000,000 | $0.0006892291 | 14508964072 |
| $50,000,000 | $0.0034461454 | 14508964072 |
| $100,000,000 | $0.0068922908 | 14508964072 |
| $250,000,000 | $0.0172307271 | 14508964072 |
| $500,000,000 | $0.0344614541 | 14508964072 |
| $1,000,000,000 | $0.0689229083 | 14508964072 |
Pros:
- SMR would be commonly accepted everywhere (and not MSMR)
- Reduce the supply so that we don’t have the “memecoin dilemma”
- Easy to display SMR and its price on all user interfaces (even at low market cap).
Cons:
- This could be rather complicated to users again, as we now introduce decimals.
- We are essentially (artificially) reducing the supply.
Option 3: Keep it as is - Very low price, very high supply
The final option is to keep it as is, with a very low price and a very high token supply. 1 SMR will be the lowest unit and the one that will be generally accepted as base unit for Shimmer. This means that exchanges and dApps will need to find a way to properly display the SMR token price in their interface.
Pros:
- Keeping it simple (for now), as no changes are required. 1 SMR will be the base unit.
Cons:
- It’ll be a challenge to properly display the SMR price, exchanges may revert to displaying only a Million Shimmers, even though SMR is the base unit
- Shimmer will be stamped as a memecoin
| Market Cap | Token Price | Token Supply |
|---|---|---|
| $10,000,000 | $0.0000000069 | 1450896407249092 |
| $50,000,000 | $0.0000000345 | 1450896407249092 |
| $100,000,000 | $0.0000000689 | 1450896407249092 |
| $250,000,000 | $0.0000001723 | 1450896407249092 |
| $500,000,000 | $0.0000003446 | 1450896407249092 |
| $1,000,000,000 | $0.0000006892 | 1450896407249092 |
Conclusion
There is a lot to consider here, which is why it’s so important that the community actively gets involved in shaping and designing the future of the Shimmer network. Let me know what you think below!
- Option 1: MSMR (Million Shimmer)
- Option 2: SMR, with decimals
- Option 3: Keep as is, with low price and high supply
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