Today EOS.io released a proposal explaining the initial plan for the EOS token distribution model. I wanted to take this moment to share the first thoughts that popped into my head. For those who don't know me, I'm a student of game theory and have a particular interest in auctions and incentives. This is right up my alley.
My thoughts
- It is deliciously ironic that they're proposing using Ethereum to launch the EOS token. If all goes according to the EOS plan, Ethereum, like the Titans of old, will give birth to the force which plots its own destruction.
- Practically, running the sale on Ethereum is a wildly smart move for publicity's sake.
- The model is clearly inspired by the AGS sale which was used to raise funds to develop Bitshares, DPOS, and ultimately Graphene.
- The sale will last a year, which means it will be difficult to evaluate intelligent bidding strategies early on.
- The fact that the optimal bidding strategy is not obvious means that whoever gets the game theory right is going to make a killing off this crowdsale. You should ask the team why they think a weird non-traditional auction is fair.
- There is no proposed cap on the amount of money to be raised - which will be deeply controversial and divisive.
- The first 5 days of the crowdsale will sell a block of 20% of the total EOS tokens, the remaining will be sold in equal blocks once per day for the remaining 360 days. Each block will be divided proportionally among those who contributed during its respective time period.
- Thus, the crowdsale is robust to changes in the ETH price, despite the fact that it's denominated in ETH. This is very clever.
- The first 5 days will set a baseline price for the token. Suppose $20MM is raised in the first 5 days; this equates to $0.10 per token. That means for each following day, on days for which less than $222,222 is raised, you'll be able to purchase EOS tokens for less than $0.10.
- The team will have to say something about whether the ETH contributed can be recycled back into the sale. In the AGS days, recycling was allowed - and this too was terribly controversial as it allowed committed team members to amass an enormous stake.
If this ends up being the final crowdsale plan, I'll keep posting my thoughts and analysis. Cheers!