Further Flow Control ideas to stabilize creator coin economies

Tech/Network Upgrades
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Catching up after some time away and enjoying the great ideas and discussion on the Whale Creator coin thread. Look forward to seeing the latest from the community call as well.

I wanted to build on some of this to see if we could improve incentives for fans to buy and continue to hold coins early even as the economy and the value of their holdings grow. In short, create more stability for Creator Coin economies.

On the one side, the community activity rewards v2 creates an incentive to hold, with the time based holding pro rata direct distribution of RLY. On the flip side, the bonding curve design can create a strong incentive not just to buy a coin early, but also to sell as the value of their coins can increase very quickly and quite dramatically.

Flow controls that limit the sell amount based on holding time have been demonstrably helpful in this regard. Importantly, we see that the sell limit vesting controls effect the capacity to sell out early, but not the incentive to capture profit by purchasing a new coin as early as possible after release. It’s hard to judge if the slip based fees have been effective at all as a penalty since they aren’t visible to my knowledge and likely unknown to most participants. They do however redirect some portion of RLY back to the community.

How can we do more to stabilize the RLY backing a creator coin? I think we need to create stronger disincentives to sell newly acquired creator coins, and/or disincentivize speculators from jumping into coins early in the first place with the goal of capturing liquidity and rewards from the true fans and those who support the coin later. How can we limit siphoning away of RLY backing a CC?

Options to conduct fair launch sales, new bonding curve designs and staking mechanisms will all be helpful in this regard, but I wanted to propose a couple other ideas for consideration. Certainly pros and cons to each along with implementation challenges, so I’d like to hear if any of these are interesting to creators and fans out there.

Implement slip based like fee based on holding time (instead of liquidity from the curve) - Similar to how RLY CAR rewards vest on holding time, do the inverse for coins sold soon after purchase with a steep fee that gradually declines as holding period increases. This fee could be reallocated to rewards pool for that coin or direct to creator in the form of CC. TL;DR Create a steep penalty for selling after short holding period that declines with holding time - instead of gradual, could also be daily/weekly.

Further flow controls - Test much much more restrictive time based vesting for sales of coins for fans. Have any fans complained about this or do any creators have feedback from their communities on these restrictions? We’ve seen some coins have steady sales happening from early supporters who are only held back by these controls. It seems hard to argue that a fan should be able to, or have a need to quickly turn around and sell such quantities of coins they purchased the same day or even days earlier. I’d for one be open to much higher restrictions/slower vesting of coins for sale that shouldn’t hurt fans, but should keep more RLY backing creator coins and may make coins less attractive for speculators.

Donate - I know there are plans to improve community activity rewards to account for donations and holdings and in general usage of the coins based on individual creator use cases. What I think we could also do is explore a mechanism whereby those who donate coins could see the restrictions on slip based fees and flow controls relaxed by some amount. What I am getting at is the idea that those who are provably fans/supporters/part of the community through their donations, are in turn given a break on controls that are designed to keep rewards and support in the community. Maybe every coin donated would in turn open up a coin for sale for that fan beyond the standard flow control restrictions.

A few ideas!

Cheers,
Grand

P.S. Thank you to those who supported me and the others for the Creator Council. We’ll do our best to serve the Rally community in our capacity there. Please reach out to any of us on the council with questions at any time.

Link to slip based fee and flow controls discussion: Creator Coin Restrictions

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After reading your ideas, they make a lot of sense.
Understanding there will always be greed in any system is the starting point. In many financial concepts, the speculators provide liquidity but you have to understand their path and thinking. In the normal world a profit of 10-15% in a few days could be the exit point for some but in the world of Defi we are dealing with multiples of those percentages. My guess is that ~100% in 2 days you could see speculators get out. These types have the biggest impact as they move a large amount of coins whereas the supporter is a fraction of these transactions.
When a new coin comes out, it’s difficult at first glance to differentiate supporters vs speculator but after some DYORing {DYR = Do Your Own Research} you can see patterns. Initially the big purchases helps the supporters and the creator. This likely leads to other speculators trying to “jump on the “bandwagon”. After all doesn’t the world now follow the top 100 Robinhood buys/sells? If the supporter is smart they would take some profit before the speculator gets out but I think we have to take a step back and understand the supporter.
It was once explained to me about the new economy out there. The "feel good’ economy where someone will pay for gratification [eg twitch with tips or subs]. The supporter might not care what the price does as they know they are doing their part to help their creator because they get satisfaction from them. After understanding this concept … that the real demand for a creator will help it gain momentum even after the selling as the supporters will do what the creator intended [support them].
The selling penalty is a good idea but if the speculator is up +100% not sure a %penalty is going to dissuade them unless it’s very punitive. We don’t want fall into a trap where we are setting all of these obstacles stopping a free market. So as more creators come on line and we begin to approach milestones of 250/500/750/1000 creators; we will probably see some new patterns and this pump and dump occurrence limited to a lesser percentage of CCs.
In summary, speculators are necessary evil. They provide liquidity. It’s a micro impact on the price but in the long run if a creator does their job the macro impact is a higher price. We need to get feedback from creators and decipher that information with the help of Bremner [our marketing expert]. Then report back to the community the findings and then continue the discussions. This would require some work for the council but I believe this could be the needed maintenance work on Rally engine. The council would become the “handyman/handywoman” allowing the Rally team to focus on the infrastructure build.

As well thank you for the support you showed me andfor the Creator Council. We look forward to engaging more of our community to build a stronger and more informed community.

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My humble opinion as a member of a community that introduced a creator coin: this discussion is more about perception and feeling that about actual end results or practical calculations. The whole idea of participating in a micro economy is likely to be foreign to most people, and adding the “cryptocurrency” buzzword to the conversation only increases the alien factor.

I think the primary situation that we’d be trying to avoid is the following:

Creator: Hey everyone, our new $COIN is ready to go! I know many of you have been itching to try this whole thing out, and now you can! Head over to Rally and grab your coin, first 100 get an Edible Arrangement!
Fan #1: Sweet! I just dropped $100 and got 90 $COIN. How do I get the new server role?
Creator: type !coinjoin once you have your Discord account connected and you’re in!
Fan #2: Proud $COIN holder!
Fan #3: No idea what I’m doing, but let’s spend some $COIN
Fan #4: Wait, hold up - you got 90 $COIN for $100? I just paid $100 and only got 50 $COIN. Is it broken?
Fan #5: Same here, I bought $50 but only got 25 $COIN. Is it random?
Creator: No, the price of $COIN fluctuates as people buy and sell.
Fan #4: Huh?
Fan #2: Wait, so what are my $COIN worth now? I bought $100 but it says it’s worth $200?

Fan #1: Mine too!

Fan #5: What the $&%?
Creator: That’s just because the whales are pumping the initial price. It’ll settle down.
Fan #4: So I’m just screwed?
Fan #3: Whales? I’m so confused

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I think you are right in the desire to maintain a free market and that the fee would need to be quite high to actually dissuade the actors we are targeting with such changes.
Perhaps finding more ways to launch coins directly to their supporters before listing on rally.io and/or fair launches could go much further to protecting these creator economies, while also ensuring that CAR is distributed more fairly across the network.
Thanks for your thoughts here!

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you bring up valid points again … maybe there should be some Fact sheets that can be distributed to new creators to help educate their community. I would like to thing the ultimate goal would be to provide support on marketing and growing coins. Rally is in setting the foundation for success and resources seem to be dedicate to the infrastructure from what I gather. There will be valuable lessons and much needed input from the community as you are doing.

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I am very much for exactly this point that @Grand is making:

“Finding more ways to launch coins directly to their supporters before listing on Rally and/or fair launches could go much further to protecting these creator economies…”

The basis of creator coins is help creators monetize their creations by bringing it more directly to their fans. The 2 keywords:
Creators
Fans

You want to create a strong Creator-Fan relationship. As Rally, you want to support this as strong as possible. Because every creator wants to join the network that brings their fans closer to them. And every fan wants to join the network that brings their creator/idol/etc closer to them.

The perfect way to do this, is to facilitate a creator to invite their fans to come and join them. And if a creator wants to really engage all the fans (big money and small), the creator should have a way to onboard them on their coin before it hits the global market.
Give every creator the possibility to onboard their fans through their own network (in a few days or perhaps a week). This way, the real fans get at least the chance to buy a decent amount of coins from their favorite creator for a good price.
This will be the base of the whole community. Then you launch globally. Whales can come in, if they want, and bring up the price, and later dump it to lower the price again. But because the fans buy first, it will never impact their initial investment, AND the fans have a decent amount of coins, which is great for the creator. Now (s)he can give away perk for everyone who holds 10 or 50 coins.
That is what binds that local community together.
All the economics will be on top of that. But the basis of creator coins should be enthousiastic creators AND fans.
If you got raving fans on the rally platform, you can be sure the word-of-mouth will spread about this amazing platform where you can get really close to your idol. Unlike being the platform that will be talked about as ‘yet another crypto sc*m’.
Rally got something truly unique here. Dont’ throw it away by focussing on how to have damage control, when it should all be about Fan and Creator satisfaction. That is what will make Rally the winner on the long run.

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You are making a mistake here too:

You want to create a strong Creator-Fan relationship.

Not all coins are creator-fan coins. For instance, BOT and the upcoming PLAY aren’t single creator, but multi-creator coins. The flow controls as implemented is actually already hurting them…for instance, if I build a bot and want to sell it for BOT, I’d tell people to go buy BOT coin, …and then wait 3 days for flow control to end before they are able to send me the coin they just purchased for my product? Tough sell.

And that’s really just the problem with making assumptions around an economy so early in the game. Everyone keeps saying “this is how it IS” and “this is how it WORKS”. If we get too prescriptive, we start limiting what RLY can become and how effective it can be. It wasn’t broken in the first place, it was just inconvenient. So talking about further fixes now is frustrating as it makes it harder to use as a currency between people within a community (which makes it actually valuable) and instead limits us to using it as a different way to donate to a creator; great short term, but has no real long-term potential.

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Ah, I see. I might have been not specific enough in my description.
My proposal is to give creators the option of letting their real fans come on board before they launch globally. It is not a must. It should always be up to the creator how they want to launch and grow their coin.
If a coin doesn’t have fans they care about, but set it up to be a means of cheap transactions, then they clearly need a different set up.
It is true that it is al very early, and that there should not be too many limitations.
But I am doing my best to give my perspective from the other side: giving possibilities to creators. Not to limit anything.
If flow control is limiting creators, it should be possible for them to turn them off for their coin if they please.
If onboarding real fans before going live globally is a way for a creator to get their fans enthousiastic, that should be an option too.

Giving Creators the options to set the ‘parameters’ for their coin is what can make Rally the flexible platform that can accomodate for many different coin use cases.

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Sell and Send are different things. Flow controls wouldn’t stop you from sending coins you just purchased…at least that is my understanding.

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I’m pretty sure they do. Check the release notes from today (April 8th): “flow controls from Sends from fans to creators were incorrect if selecting the creator from ‘Favorites’ in the Send flow. Transfers from fans to creators should now be unlimited…” suggesting that flow controls limit sends in all areas except that one. Probably because if sends were allowed, pump and dumps would be possible again: make a user account and put 1000 RLY (or however many) into it. Wait til flow rate allows you to withdraw it all. Make 20 accounts, putting 50 RLY into it over the course of an hour; everyone gets excited because the price is skyrocketing and buys more. Have all your new accounts send their CC to your first account. Withdraw as much RLY as you can (at least the original 1000). Worst case scenario, you’re exactly where you were before the pump and dump. But likely you’re quite a bit ahead.

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You are right, send is limited unless it is to the creator. I didn’t have much experience sending outside of donations/purchases from creators and hadn’t encountered the flow controls here before.

The scenario you describe is plausible, and you are also right that we need to consider different types of communities when thinking about flow controls and changes to the network. Thanks for highlighting these.

There’s a real challenge here in that Rally wasn’t designed for multi-creator communities. It can work for them (and should!), but you’ve highlighted the friction that flow controls create for them. Your post also shows why these controls are so necessary to prevent pump and dump…so what’s the solution?

Since these flow controls are largely to protect fledgling coins, I might propose having much higher flow controls when coins are first introduced for the first month or so and then have them relax over time when the opportunity and threat of a pump and dump wouldn’t be as present as it is early on.

Another solution could be to build off of the recent campaign feature, by allowing fans to create campaigns that are approved by the creator and wouldn’t be subject to the flow control limits, thereby allowing one to sell a bot for instance, or other fan made product within a community.

Definitely welcome other ideas on this front!

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My purpose was not to say “this was foolish look at this problem it created!”, but rather more abstract. I was trying to point out that saying “it is X” or “it was designed to do Y” is full of hidden premises that can cause later problems if not implemented carefully; what’s a pain-point for one creator is not necessarily a problem for all creators (and could arguably be seen as a benefit). As for this particular issue, there are a number of solutions; for instance, flow control could exist only in the first 4 weeks of the creator coin. That would level off their rewards and take away a lot of the benefit of the initial pumping. Alternatively, @emiel had a really good idea by making all of these things optional by the person who establishes the coin (although that would be a nightmare to develop lol).

And as for “Rally wasn’t designed for multi-creator communities”…well, it kind of is. If it’s just a vehicle for my money to get into my creator’s pocket, then it’s not really worth the trouble and Paypal is typically cheaper transaction-fee-wise anyway (initial transaction fee to get into RLY, plus any payout fee to get back to fiat). It really only makes sense if people are sending RLY to the creator, who is then paying other people to make things for them. Each “minted coin” has to swap to at least 2 people to be worth it. And once you consider that, it seems like an obvious step to have members of your community buying goods/services from other members of your community, as it provides additional utilization for your coin.

As for the “campaign” feature they’ve built, I’m not really a fan. It seems over-complicated and extremely limited. I probably would never use it. I get what they were trying to achieve, but they didn’t have the manpower or the tools necessary to pull it off at the time, and so it kind of didn’t turn out great.

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I’m glad you like my idea for tapering off the flow control.

To clarify around multi-creator communities, I’m simply drawing a distinction between coins that back a single individual or group, and these others that are more designed around what might be a collective endeavor, shared enterprise or passion.

I’m 100% in agreement around community buying goods/services from other members and having a system that supports robust user generated content and services that can be monetized. I think it’s essential for the continued growth and health of most of these economies.

There’s a reality however that the first 60 creators or so on the network were almost exclusively individuals, and things like flow controls would be in place differently if the network were designed and optimized for coins like PLAY, ART and BOT. So it’s maybe just a nomenclature thing here where I would call those coins multi-creator communities and others like FAN or 3cr8 or any of the incoming Tier1A coins a creator community (regardless of the exchanges between fans in those communities).

To close, I’d just say that I think we are honestly on the same page here, though I think Emiel wasn’t making a mistake so much as he was only half right in saying that you want to create a strong Creator-Fan relationship; the other half being that you want a strong Fan-Fan relationship. In doing that, one takes your point to heart of considering the impact of changes from the perspective of creators and users across different communities with different use cases across the network.

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So what would be the issue with a “private launch” feature? I.e., the new coin doesn’t show up on the main list for the first day, you can only get it via a private link that the creator controls? That creator can then choose to distribute it only to their Discord group or email list or whatever, or they could choose to blast it on Twitter, or whatever. Then the next day it opens up and it’s open season?

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The main problem with a private launch feature is that when it goes “public”, it will already be at price. It won’t go up. Whales won’t invest in the coin, 1) because they’ve lost much of the ability to get rich quick off it due to it being cheap, and 2) they’ll already know exactly how much outside income that coin is capable of bringing in. This is more stable and seems like a great idea at first, but remember there are only like 6k holders (before Coinlist there were only like 1.5k). That means that some of those whales are VERY big proportionally. And if they decide they can make more money elsewhere easier, then they cash out; they’ve already proven they don’t care about the creators. That would crash the RLY economy, and essentially ruin all faith in RLY. Can you imagine buying an Allie coin for $31, and then RLY drops from $1 each to $0.05 each? Except it’s EVERYONE else, all coins at once? That would be far far worse than letting the whales play. Once we get 60k-70k people in RLY then doing something like that would be far less risky.

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I know that I am holding an opposing view here.
I believe there are indeed a few whales that are very big proportionally.
But letting the whales play now, it would mean that they would get even bigger by proportion.
Since they are the once making profit, on behalf of the actual supporters.
So eventually, the pain will come when they bail out. And that pain will only be increased over time.

RLY went up really quickly to $1,-
And ofcourse, that virtual money looks nice in a portfolio.
But what goes up quick, can go down just as quick.
I think the stable value of RLY might be quite a bit lower than what we see at the moment.
(I think in the first graphs, the predicted price of RLY was around 3-4 cents)
So a healthy correction now makes more sense to me then waiting for the inevitable.
The big plus of having RLY go down a lot, is that it becomes much cheaper for new people to buy in.
Thus getting a much higher percentage of total hold with the small holders.
Getting more people on board early on will build a stronger base for moving forward.
New buyers wouldn’t even know that they are getting their creator coin so cheap (if the RLY price would crash), since they never held RLY before.

This is the reason I am for the ‘private launch feature’ as an option that creators have (not as a one size fits all). Since it is a feature that the creator can decide to use or not, is would actually be a unique selling point from Rally to new creators. It helps creators who want to build together with their fans.
‘Building up density’ for RLY, so to speak.

The current buy and sell spree that happens with new coins definitely is not giving ‘normal people’ confidence. And has nothing to do with the creator economy that Rally is envisioning.
Rally will need to get through the pain at one point in time. And doing it now, will give the 6K ‘first movers’ the option to buy in more.
(IF the price crash would happen because of a optional private launch)

Apart from this, I do feel it’s quite unfair to new creators that they will have 0% change of any rewards after their first week of launch. While the reward system is meant to give the newest coins extra incentives to create oppertunities to grow. For example BTX will be rewardless this week, and probably the next weeks too. Thanks to the buying spree on moment of launch, and the selling spree that followed.

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An addendum to mrq02’s post. Beyond the supporters, the CoinList holders would be outraged

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