The more reading and thinking I do on this, the more inclined I am to restrict the distribution of all tokens to existing holders (i.e. a split or a cap) because there’s a massive benefit to having:
- absolute confidence in the supply
- very little if any incentive to take over a section (Sybil attacks become very unlikely to be tried or succeed) and we ensure the network is almost provably secure from day zero.
The above is a massive win which we shouldn’t overlook. If mutation is also shifted away from the network we have a mindblowingly secure, efficient design.
I think there will be a lot more focus on those facts from the technical and crypto community than on how the tokens were distributed. Some speculators and investors will complain, but I don’t think users, farmers and application builders will care much about that, they will be much more impressed by the above benefits, and after launch it is they who matter.
I am still concerned about giving more power to existing holders, particularly any remaining whales, so we should think more about that. Perhaps start a topic discussing it with the aid of @mav’s statistics on the number of holdings, coin movements etc.
At the same time we can have another linked topic to look for ways to mitigate this by widening the distribution. For example by allocating a proportion of funds to the foundation to be distributed in a clearly defined way over time. Perhaps donations to educational charities earmarked for regions of the world with low GDP per head of population. I suggest not replying here with comments on the latter two points, but replying on a new topic for each of:
- Analysis of MAID distribution and impact of a split or cap at launch
- Ways to mitigate the impact of a split or cap of SNT distribution
If anyone wants to start those discussions I’ll link the above to the topic(s).
EDIT:
I think there may be some additional benefit to the split/cap distribution in terms of coin price because if the only source of SNT is sales by holders (and none from the network) the price is likely to rise to the level at which demand for SNT (from users wanting to store) matches a price at which holders are willing to sell.
I think that this rise will be a benefit because it will highlight SNT immediately after launch and gain attention. It may also lead to a relatively stable upward price profile, driven by a combination of increasing demand to use the network, and holders wanting a higher price as their holdings diminish over time due to disposals.
At the same time this should not affect storage costs, because these are calculated by the network as the amount of SNT needed to ensure farmers are just profitable enough.
These seem like useful secondary benefits of the split or cap approach.