Jeff Kirdeikis has written an article on the Uptrennd token economics:
I suggest you re-read this article.
Since it is important I have decided to write an article with my thoughts and not just comment on it.
I'll start with the problem:
The Uptrennd site works with a POINT system. There is no limitation on the amount of POINTs the system can make.
Today, Uptrenndians can convert their POINTs into 1UPs, which are the Uptrennd token, with a 1:1 ratio. 1UPs amount is fixed – 1 Billion tokens.
Here is the problem: converting from an endless system to a limited system.
This means that if Uptrenndians start to withdraw their POINTs and convert those to 1UPs – there will be no tokens left….
For an example: Let us assume the community has 1,000,000 members and each member withdraws 100 POINTs per month:
1,000,000 * 100= 100,000,000 per month.
Within a ten months period all 1UPs will be withdrawn and the Uptrennd system will not be able to function and UPVOTEs will have no value.
Before I'll go into the optional solutions, I wish to discuss the goals:
- To keep the Uptrennd system alive for ever.
- To give (good) content (valuable) incentive.
- Make it an easy to use system.
I wish to add some more goals:
- To use 1UPs for better system abilities, for example, buy better servers and database systems.
- To use 1UPs to compensate the entrepreneurs and working team.
As you can see the goal to make the 1UP token as deflationary one – is not set in my goals.
By definition a limited supply of tokens make it a deflationary token. Burning more tokens will deeper the problem between the unlimited POINTs system and the less and less amounts of the 1UPs. Please, do not burn more 1UPs tokens.
There is no such thing as: "cold storage". Not even, if you take a hardware wallet and put it into the freezer…-J.
- The Uptrennd team has offered to change the conversion between points and 1UPs. Lowering the conversion ratio allows for a longer ability to keep the Uptrennd community alive.
- Limitation on conversions between points and 1UPs.
- Forking the 1UP smart contract.
I think that the preferred solution is to wait. At the moment, there is no threat to the Uptrennd existence and the system is growing rapidly and intervention in its economy might harm its' growth.
Let us wait and think again.
What do you think?
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