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!
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