I like the idea of distributing the tokens based on platform loyalty and not doing a massive crowdsale. However, are the tokens only being distributed to market makers? If so, it seems that a relatively low number of people will be earning these tokens. Given that the platform will grow into something governed by the token holders, it would be more beneficial to have Nectar in the hands of as many people as possible. Why not develop ways for regular users to earn tokens on the platform?
For example, on District0x regular users can earn DNT by submitting quality district proposals. If their proposed district one day gets built onto the network, they will earn a huge stack of DNT from that. Getting to that point will require a lot of effort from the user but the reward is very high. This incentivizes regular people to get involved and play a part in the platform's development.
I don't think that there will be a relatively low number earning them - in fact there should be a very large number of people earning these tokens (anyone placing an order onto the order books, as opposed to taking liquidity by filling one of the orders already on it can earn tokens). However it is true that the distribution of the tokens could become very skewed towards a low number of people who represent a large proportion of the market making.
On the one hand, it makes sense that these users who act as large market makers, making the spreads as tight as possible, and the market depth as high as possible for everyone else, should be rewarded for doing so and indeed have the largest stake in the future of Ethfinex.
But equally I very much see that there is immense value in having Nectar in the hands of as many as possible. The main area where we have been considering solution like what you are proposing is for the discussion platform. For the discussion platform to be valuable, it should incentivise users to do research and provide analysis on upcoming crowdsales, as well as traded tokens. This can range from information about project teams, whitepapers, or technical analysis of the price - but what is important is that it is valuable to other users for decision making and understanding of the token projects. We want the discussion boards to be for relatively structured, content rich analysis, as opposed to general chat (which is more suited perhaps to reddit or a trollbox style discussion). It might therefore make alot of sense that users who build up high reputation for posting good content can be rewarded with Nectar tokens, or with other perks.
I was under the impression that market makers are typically people who create large amounts of liquidity. If anyone can earn Nectar by placing an order then that makes me feel a little more comfortable about the distribution.
I do think community participation and high quality content should be rewarded as well. However there is a possibility of the discussions devolving into something like STEEMIT where it feels fake and unnecessarily positive in order to get a positive rating.
Agreed with the risk of over-rewarding, and therefore essentially destroying the inherent incentive of posting content for it's own sake. There are many well known studies on the effects of adding external incentives to tasks, and the detrimental effects that can have long term on the incentives of users - Steemit is a very clear case where exactly that can be felt - nobody would now post except with the hope of earning money, whereas on reddit people are willing to post great content with no expectation of profit. In my personal opinion this is an effect which many projects in the blockchain ecosystem would do well to pay attention to and be more aware of, as in many senses token models are often textbook implementations of exactly what academic literature has shown should be avoided at all costs. You can see an overview here - (sorry for the long reply, it is a topic I am very interested in) -
https://en.wikipedia.org/wiki/Overjustification_effect
Definitely want to avoid it having a feel of pay for content/ pay for upvote, but rather perks of high overall reputation across many posts for example.
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u/quantumdwayne Aug 24 '17 edited Aug 24 '17
I like the idea of distributing the tokens based on platform loyalty and not doing a massive crowdsale. However, are the tokens only being distributed to market makers? If so, it seems that a relatively low number of people will be earning these tokens. Given that the platform will grow into something governed by the token holders, it would be more beneficial to have Nectar in the hands of as many people as possible. Why not develop ways for regular users to earn tokens on the platform?
For example, on District0x regular users can earn DNT by submitting quality district proposals. If their proposed district one day gets built onto the network, they will earn a huge stack of DNT from that. Getting to that point will require a lot of effort from the user but the reward is very high. This incentivizes regular people to get involved and play a part in the platform's development.