Exploring and sharing thoughts & ideas on token distribution / redistribution for activities over time for better long term balance.

Ongoing thought & to add to: Giveaway as a Token Distribution strategy by @furion

Token Sales & Top Holding Whales

With our traditional means of distributing things we have been selling the tokens to the masses on markets. While this works and makes sense to some degree, we seem to be seeing some complexities arising. If the tokens and token holders were equal within themselves this would work just fine. As with investors in stocks for example as a classic example. Each investor owns stocks which are each an equal part which is equal rewarded. The complexity seems to arise because of token use and influence for example.

While large holders may be good in some instances it may not be in others. So thinking this out maybe we could consider allocating so many tokens for sale and so many to be given away. In thinking this through I would like to think in some backwards engineering model if possible. What if we tried to simulate the token in the working model. Then think about how many we want to circulation for value, usage, features, redemption, burning, and so on. No simply answer with so many things to think about and arising complications.

Sources & Sinks

Some thought may be given to the ideas of sources and sinks. The token's system and what users put in and take out of the system. Token developers, nodes, witnesses, and miners are some of the things to think about to be properly rewarded. Each needs enough value to be willing to put in the time and energy. Then the time and energy will go through the tokens. Tokens will be exchanged by users in regards of time and energy of theirs or others for them.

Who gets the tokens? - An idea of redistributing distribution

What about the idea of everyone can get X amount of tokens. This would be by account of course. So you could get more with more accounts. Then also each account could buy so many tokens potentially unless they are all to be given away. As an example of what PayPal did when they started they gave $5 for every new sign up that processed a sale. So this in effect rewarded a user for bringing a new user while performing a transaction that added value to the system.

Token distribution by activity

What about tokens being distributed for activity. Given away for actions and milestones. To take STEEM as an example. We get STEEM for the basic activities. What about getting more as STEEM POWER and reputation increases. Then voting to distribute to miners, developers, and nodes that the token needs for the system to run. Any of this of course brings us back to initial distribution.

Initial distribution of one (set amount of) token per user account

Could initial new accounts be coded to get just one token each. Then as we all create accounts each would have one token each. Then balance this with some other action to introduce some bigger holders that we may trust. This would of course include initial developers and miners. But could we incorporate a community of users to vote on these matters to have their say encoded into the blockchain in the form of a pre-consensus. And somehow reward the overall individual and collective efforts and input for the start of a better distribution. Maybe the initial genesis block distribution to the core team could be given away to an early community and investors. Since this is what we know and understand. But then only use a small portion of the tokens for this. Leaving the mast majority of tokens to be given by the system and distributed to those who put in some source of value that may be balanced by a sink in the tokens from the source of tokens.

Maybe this could be a way to distribute tokens with most going to future users and a minority to be held by the initial investors, developers, and miners. This way this initial usually privileged group would actually hold far less than 51% of the initial token distribution (after this distribution process). Then upon creating the initial distributed tokens they would be dispersed to many potential users right away.

This could in turn incentive everyone to add value to the token! With a more equal chance of being rewarded.

The developers, miners, nodes, witnesses, and what not would still have their little advantage with given roles to be earning right away. But right behind them would be any and all users that would be able to earn right along with them at comparable rates. This could help balance initial reward distribution which is another complexity.

The 80/20 problem

There seems to be some additional problems in relation to 20% of people doing 80% of the work kinds of things. Then there are bots and non contributors. Or the super users. What if we could cut out these groups. Let them be rewarded for their efforts which will be properly rewarded over time based on the value that they add.

Distribute to the middle 60%

Tokens could be distributed to existing members of cryptocurrencies. As a way to utilize existing invested contributions, stake and reputations. This could be another system of an alpha/test network of some sort. This early phase could be a sort of alpha test net that would be used to help better determine better token distribution. This way it could be initially skewed. Large holders could get involved and have a bigger stake / influence in who gets tokens how. This way initial investors, developers, miners, and witnesses could all have input and more say early on. However with the official system they would hold rather small token stake proportions. This would be like a different form of delegation.

Everyone could start with the same reputation and number of tokens. This would allow a more democratic vote and input process. While still having a witness approval something like a board of directors to review / vet such matter as a group of advisers to finalize voting matters. Maybe this could be a way for the large majority of users to have say while the smaller group has say as well. As this is done in some coin models in some forms already. However part of the goal would be to better distribute the tokens.

No one should own more than some low percentage of tokens such as 1% or even lower at some fraction like 0.1%, 0.01%, or smaller still. With largest holders being a small individual percentage holder a new user would not be so dwarfed by so called whales in many of our token holding distributions. This may be yet another factor in mass adoption with too much power being partially centralized. If decentralization is our goal then central token holdings should possibly better diluted.

Thinking upon this recent point token distribution should not make account holders rich. This creates another layer of complexity. We are exploring inflation to give / create less tokens over time. But that may be in fact backwards to how it should be. Much of nature gives more as it ages and matures not less. This leaves more people being rewarded less tokens over time. Perhaps initial tokens should be trickled out into existence. For example 1% of all tokens set aside for distribution and initial core team of workers to only retain 1% of that amount or 0.01% of the initial token distribution.

Initial core people could use code and witness positions to have more say and influence. This way they would have to continue to earn these early positions and influences. This would also more easily enable new users to become miners and witnesses. Effectively more balancing the playing field in this realm that seems reserved for some sort of elite which is what we are trying to get away from. In short maybe witnesses should be power token holders or accumulators. Rather some trickle disbursement with enough value for their energy and time while being more equal to what others add to the system in other (potential) roles.

Hope you enjoyed my brainstorm and will continue with our shared thoughts and endeavors.

Best,