Do whales kill new creator coins?

This topic is a result from the discussion in RLY discord:

I noticed some big players coming in (100K RLY Bridge-ins)
What now happens is that those whales buy large amounts of (very) new coins for cheap.
Result: price goes up quickly, leaving the ‘real fans’ of the creator with the only option to buy for a higher price.
Then, the whale will sell everything (after flow-control is over).
Result: Sharp price drop and the new coin now is stuck with a super high 4 week average, while the current volume is much lower. So: no way of getting any reward for a while.

Whales make a lot of money (doubled or tripled their RLY volume) and go on for the next victim. New coin is left bleeding and perhaps never able to get back up again. The real fans see how their value of their creator has decreased, and might get serious doubts about the whole system (many aren’t into digital currency in the first place). And fans that see ‘their creator’ drops in value which doesn’t do any favors for the creator either. (Examples: BOLD, GROG, B2B, CPA, and probably many others)
I believe this is very bad for the thing that creator coins are supposed to be standing for: Making a connection with your fan base, and exchange value with them. And if it’s bad for creator coins, its bad for RLY as a whole.

My idea to solve this: I would suggest to put a limit in how much coin any account can have of a certain coin. Let’s say you can max. hold 1%-2% of the total amount of coin in circulation. (this percentage is arbitrary, can be anything) So in the beginning you cannot buy more then 500 - 1000 coins. This stops big whales from ruining the dynamics right from the start. There can be all kind of extra’s on this. eg. this max coin hold is only for the first 4 weeks. Or the coin creator can decide what the % will be for specific accounts (co-founders), etc.

Maybe there is a different solution to this problem entirely. But at this moment, it just is too simple to make a lot of money when you are a whale, and the real fans and the creators are the ones suffering. And this kills of the very basis that creator coins stand for.

There has been a small discussion about with just price appreciation. You point is valid, There is it is a concern by a small number but you have to realize there are different types of player/users of the CCs. The main goal is to grow the CC ecosystem. In any project there will always be someone trying to find the loopholes. Rally has addressed some of this with new rules put in place but ultimately the team is focused on the big picture of getting MORE creators. In the crypto space whales are a necessary evil at times but there is a Tale of Two Cities here. The creators are making money with the whale buying their coins and the real supporters might be getting hurt initially but in reality they are benefiting from the appreciation. The more limitations we put on things the more we are stopping a free market. As the platform evolves, more data will be available [my thoughts] to see different movements in coins allowing users of CC to become more educated on the economics of the Creators coin.

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@sixmofo: Agreeing with most part here :+1:
But I guess my main concern is that new coins on the platform might get discouraged straight from the beginning, when a whale comes in at day one. Because that whale eliminates:

  1. possibility to buy cheap coins for real fans
  2. Rewards for probably 4 weeks (only first week will give rewards)

On the long term, definitely the economics will establish themselves for that coin.
But by that time, the positive energy is probably gone, and the feeling that many people have beforehand about digital coins are a scam, will be reenforced.

That is the real shame that these Whale actions bring upon new creators that are finding their way around. And it would be great to have the system preventing this from happening. Or at least give the creator control over how much coins can be bought by one account, to give them some ‘weapon’ agains (killer)whales.

Example of one of the creators that expresses this discouraged emotion on RLY discord:

Your point is valid. The true supporters have access to the drop of the coin. I believe there is a small is a time lag for when it hits the general market [if I am not mistaken]. The human emotion of this project is being addressed by the new team in place. It won’t be solved overnight but by bringing this discussion forward it helps to get the creative juices flowing in the community to help offer solutions.

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I was not aware of the time lag before the general market hit.
This would give the creator and their fans some time to get organized and get the best deal for the most loyal fans. I hope this is part is indeed up-and-running.
And I am very happy to hear that the human side of things are part of the team that is working on bringing Rally forward. Because as a project like this evolves, it is probably even more human, as it is tech. Most other projects fail because they do not see this balance is crucial for success.

My “lockup” idea would be ideal.

We launch creators with an initial “lockup” period where their fans are supporting the creator to get them launched.

This allows the “true” fans to buy coin before it’s officially launched and public. (ideally this would prevent whales as we could even do a list)

Then when it goes public it is truly public domain and if a whale comes in then everyone benefits!

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YES! This makes so much sense!
But I am confused now.
@Gary: you say “My lockup idea would be ideal”
@sixmofo says "I believe there is a small time lag before it hits the general market (if I am not mistaken).

Looks like we are agreeing that this would be a great help for creators to have the lockup time.
But it also looks like it is not implemented yet (If I understand it correctly from Gary).

In this case, the question is:
What is the process to get this on the Rally roadmap asap, so new creators and their fans can benefit from this?
(I am new in this decentralized structure, and I haven’t figured out the process about this yet)

Most of the complaints of this are from before flow control was put in. It was possible to come in, buy a crap ton of the coin, and then sell the next day spiking the coin. This wasn’t really as big of a deal as people make it out to be, because a lot of the competition was actually between whales taking each other’s money back and forth; whoever’s first wins. You can see that at reward time on the coin, many of the whales actually got out BEFORE the rewards were distributed, because it takes time to sell, and you want to get out as soon as the rewards are distributed, so you had to gamble. But I digress. Anyway, flow control levels this spike, which is a blessing and a bit of a curse. Now it goes up when whales come in making money fast, but it shouldn’t dip anywhere near as swiftly afterwards, allowing new people to more or less maintain the price it’s at; as the whales dip, new blood comes in to replace them mitigating the drop. The curse, here, is that if not enough new money comes in to replace the whale, it takes weeks for them to fully divest, meaning it will be a long time before the coin can start earning rewards again; this is what happened to JASON for example.

All of this is somewhat irrelevant anyway. People are upset that they’re not getting the rewards, but the rewards are honestly not very much anyway. If, as a creator, your key selling point is the rewards then your coin is doomed to failure anyway; the rewards will sharply decline from week to week without new investment, and will eventually disappear. That is why coins like BOT and BEE are so successful right now; BEE was subject to this rewards issue (no rewards for 5 weeks), but is back high again, and if BOT ever experienced a sharp drop it was before I bought any of it. The reason they both are doing well is not because they have giant communities with deep pockets, but because they either “are providing” or have detailed plans of “how to provide” value/utility for the coins and everyone in their community knows that while the coins are essentially useless now, within a few weeks that won’t be the case. BEE is a great example of this; she has a Patreon account and mentions multiple times every time she’s live on stream that she has a developer working on a site that will allow you to purchase her Patreon rewards but for cheaper; without having to give Patreon a cut she can charge less but receive more. And so some people are buying her coins because they are planning to cancel their Patreon.

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Thanks for joining in the discussion @mrq02. Actually, it was your post about BEE a while back, that got me starting to think about all this. About how the real fans got really upset about the drop because of whales getting out. So I guess it’s thanks to you we are having this discussion :slight_smile:

What I am looking for, is a way to make creator coins available for all fans. The creator-fan connection is one of the biggest values that the coin delivers. As a creator, you want the connection with as many fans as possible. The more fans you have with at least a minimal amount of coins, the more connection you can make with your fans. So a creator should have a way to at least allow as many people as possible to own 10, 20, 50, 100 coins for a minimal price.
This can be done with the first 20k coins that are for sale. Those are low price (in RLY). As a creator, I could get a 1000 fans with at least 10 coins, without my fans needing a lot of money. THAT would be amazing for many creators. Because now I can do perks for my fans who own at least 10 coins (or 20).
After those fans are on board (let’s say as a creator I worked hard on that for a week), the coins become available for general sale. Now, everyone can buy, which means, the price goes up, and its harder to get to that minimum of 10, 20, 100 coins. No problem, because my loyal fans are all on board. If there are new fans coming in, they will have to pay more to become part of that group, but that is OK.
This would give more equality, instead of having a few fans having lots of coins, and the rest nothing. I guess I’m trying to look at creator coins from a fan perspective, that will benefit the creator. (and therefore will benefit RLY)

All of this above should be by the decision of the creator of course. So it should be an option during the onboarding process of the creator.
But if Rally would give this option to the new creators, you would have a unique selling point that would be a big bonus for many creators.
(and you would erradicate the whole whale issue for your true fans, since the price will never drop below what they bought it for (counted in RLY).
The value in creator coins is not only to make it rise in value. The value for many creators will be that it allows to create a tighter community that you can share things with on different levels. (and even let fans share things between eachother). Therefore, many holders with small amounts is a big plus. Due to the bonding curve value, this can only be achieved in the beginning. I believe this is a big oppertunity for Rally to shine.

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I love this whole thread.

The core team will build this, and work with the Rally community on the parameters.

Great to see the community come up with such amazing ideas to make the network better for creators and for true fans!

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Ah, yes, but I was talking about early days before flow control was implemented.

As for the stuff about doing things for fans and setting a threshold for them to “have X coins”, that is actually beside the issue. It’s solvable by releasing your coin, waiting a day, and then determining X. Coins are fractional to like 8 decimals, so there is no actual reason to say you need 1 coin vs 0.1 coin. This conversation keeps getting derailed (which is fine in a conversation, but not in a proof/logical argument) by side-issues. If the problem is one of “I want my fans to be psychologically invested in my coin” then it doesn’t matter how many actual coins they buy; just figure out how many coins are worth $10 USD at the time of the “group buy” and then afterwards ignore the RLY to USD ratio (the creator could even theoretically cash this back out basically instantly since they know when it’s going to happen). This leaves the whales with no actual benefit, and it is irrelevant if the CC to RLY ratio drops when the whale pulls back out. End result: this is not a coding/platform problem, and can already easily be solved by the creator themselves.

The only problem that actually WAS a problem was if you wanted someone in your community to turn a USD profit off your CC. This was essentially a problem because of pump and dump; the only way to really turn a profit on currency is to get in early before other people do, wait for it to go up, and then get out before other people get out. This is a problem only because if the whale gets in first and out first, then they profit rather than the community. This problem was more or less solved by flow control. No whale is going to sit there cashing out 1 coin every X minutes, whereas someone who only has 10 coins will. So what happens is that the people who care about turning a profit (now the whales AND your early community adaptors) make a profit by taking the money from the people who didn’t actually care about making a profit anyway. This essentially solves the problem. V2 of the rewards goes even further and makes sure that the whale can take only the share of the rewards that they have earned (which I suspect will actually end up being about the same as before, and is already an over-optimization, but we’ll have to wait and see). End result: this problem has already been fixed.

The only problem that remains is if you want everyone in your community to profit. The only way to do that is to seal the creator coin off entirely from the rest of the market. But the thing is, you won’t profit. The only profit is incidental because the value of RLY itself goes up. And there are either two ways the rewarded RLY works: either it is already included in the total value of RLY in relation to USD, in which case you’ve now created a situation where people who put in money can’t fully profit from the ecosystem (disincentivising them), or it is not already included in the total value of RLY in relation to USD, in which case the rewards that creator receives actually devalues RLY. No matter what, there is no way for everyone in your community to profit.

Ultimately, the only way to increase the value is to get more people to buy in, and the only way to do that is for the creator (or the community itself) to provide value for the coins; earning extra RLY is worthless if the RLY itself is worthless.

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I agree that v2 of the rewards will bring a whole new dynamic around whales.
What that dynamic is going to be, we will find out in the coming weeks.
But for the short term: Yes, I expect this Saturday (today) to see the last massive ‘one moment sell off across the board’ happening. The new dynamic will be more dispersed.

Multiple topics are rising to the surface in this discussion.
I like that: It gives a broader perspective and it all relates (and influences) eachother.
The reason for me to start all of this, is because I want Rally to be a success.
For that to happen, Creator Coins have to be a success.
For that to happen, Rally must:

  1. Support new creators in the best way possible
  2. Get as many supporters of the coin on the platform as possible and give them a great experience.
    Important to note here is that (most of) the creators, as well as the supporters are not into economics and not into crypto.
    Both the new creators as the supporters should have a positive experience from the beginning. This creates the kind of positive buzz people will talk about, which gets new people to look at the Rally platform and its possibilities.
    I think a great kickstart for this, can be the process I described before: Give creators the oppertunity to onboard their supporters before hitting the general market. It allows fans to buy in a cheap as possible, which allows more fans to hold a certain amount of coins. Rally and Creators have to work together in the pre-launch to get this done. Big players (non-fans) coming in is not what the creator coins are about in essence. It is about creators and their supporters. I don’t think this system is harming any of the other dynamics. And on the long run, it is the adoption of the creators but even more so of the supporters that will make RLY a success.
    One part in the equation that seems to be overlooked is the role of the supporters. And they are crucial to the future of RLY. So everything that can be done to help creators get as many supporters on board AND give those supporters a great experience, is worth to focus on. I think it helps the experience to let the real fans buy first (if the creator decides to do so), and let the whales come in afterwards, if they are interested. This way, there is a solid supporter base from the start, that will never go in minus (at least in # RLY).

I actually wanted to find out if one of the KPI’s from Rally is # supporters. And if so, how high that number is, compared to the amount of creators.

Quite new, but isn’t the circulating supply only 1% of the max supply? So wouldn’t this make the price rise artificially as well. While pushing the price down with every new coin distribution.

Great thoughts.

On distribution of tokens to fans: Today, the launch of tokens comes with a “grant tier” with every Snapshot. For example $PLAY is at the $2K tier. These grants go and buy $2K worth of $RLY to insert in the smart contract above and beyond what the creator genesis block would create. We work with creators to distribute these grant tokens to their true fans as part of a token launch. So these Creator Coins minted by the grant are a way to get broad based fan support.

https://snapshot.org/#/rally/proposal/QmSYtnF8tqz99VsggW5mmTEC4RdrGB9PGc5hSsFjhDuSDg

KPIs - absolutely, the # of supporters I think will increasingly become a dominant KPI for the health of an economy, much like any token project’s Etherscan number of holders. The most broadly held tokens today are $PTM at 782, $STANZ at 569, and $ART at 459.

You can click on the column header of supporters to easily sort - https://www.rally.io/creator/

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I’d love to see the KPI around supporters getting more prominent over time.
For me, a broad base of supporters, means a broad adoption of RLY.
It might even be helpful for creators to see what a decent ‘growth curve’ is for their coin.
But that would be linked with other creator tools, that will be later on the roadmap.
It might too early for that now, but getting insights in how PTM, STANZ and ART are growing their user base would be valuable for other creators for sure.

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I agree here. I have a KPI internally of 500+ supporters of the $GARY coin before April is over! I’m leaning in HEAVY there!

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slightly off topic
A discussion on Discord made me realize that the numbers that are mentioned here are not unique accounts. They are unique to that coin.
So in theory, there could be only 782 fans, of which some also hold the other coins.
I’m sure the Rally team can see # unique accounts.
That would be an interesting KPI.
And perhaps even an incentive for creators:
Every X number of new accounts that you bring in (buy your coin before anything else) gets you a bonus.
Because the more unique people on Rally, the better it is for everyone (adoption)

We do report on this KPI in the community call.

About 19:25 into the video, 6,159 unique creator coin holders. While we have a lot more accounts on Rally.io, this is the active unique coin holder count.

What you’re talking about in terms of incentive for creators for bringing on a brand new fan into the ecosystem is a great thought as well. @kevindelphi @DaddyFatSax

Spotify actually rewards their sales team and creators this way; if a new podcaster for example brings on a brand new Spotify user/subscriber, they get an extra bonus.

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I’m good with these measures but I think the best and most equal access is to have an inflow control for newly launched coins. I don’t like the ambiguity around who is a “fan” and who should get access to the early 10 coin special. If we just launch with inflow control then everyone has a chance to buy some day 1, and the amount you could buy could just unlock over time. I think this will lead to overall slower builds for bigger creators which will be more beneficial to their economy and their long term believers/fans.

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Agreed; I think we have to try to keep markets fair and not restrictive on ambiguous lines between fan and crypto community participant. Overtime, these two can and should blur more and more.

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