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The founder of Mythos Capital, Ryan Sean Adams called the Ethereum killers “toothless” (lacking in strength), relying on initial tokenization schemes that often give priority to the people involved in the project:
Adams if reported to a recent Messari report, which summarized the toke distribution of some of the more popular alternatives to Ethereum (ETH) released in the past two years. There are four main categories of distribution: public presales, community assignments, people involved in the project, and the respective bases for each project.
The report’s authors suggest this the proportion of tokens assigned to the people involved in the project (team, company and risk investors) is crucial in evaluating the projects, “Projects that distribute tokens to the people involved in the project (teams, founders and investors) at the expense of the community are disadvantaged.” They also contrast these distributions unfavorably with Ethereum:
“Ethereum was successful because it made early investors rich. But it thrived because the pool of early contributors was considerably large.”
Further, The authors argued that all of these blockchains (with the exception of Kadena and Nervos Network) employ stake consensus proof, which they believe only exacerbates the problem:
“Rebalancing the stakeholder relationship versus the networking community after launch is an uphill battle, which can be more difficult for proof-of-stake (PoS) networks, as first-party stakeholders have a perpetual right to the lordship “
The report states that, for example, Placeholder Capital favors projects where between 20% and 30% of the token supply is for those involved in the project. However, the average of the twelve platforms mentioned above is 43%, and only Kadena and Edgeware meet the specified criteria.
Ways to ensure new cryptocurrency projects get a fair launch have long been debated. Although Messari and Adams appear to be praising the launch of Ethereum, a The Bitcoin maximalist will soon point out that a significant amount of Ether has been pre-mined. Others might support it Satoshi Nakamoto managed to mine a fortune in Bitcoin in an environment with virtually no competition.
The question in this case is rather to determine which type of deployment provides the best possible results for a project. A substantial allocation for those involved in the project has an opportunity cost. Instead, these coins could be used to incentivize the community. Further, The parties involved often receive their tokens for free or at substantial discounts, this allows them to sell early, causing prices to plummet. The whole topic of symbolic economics is very new and provides little empirical data or academic research. This makes it difficult to draw eloquent conclusions and makes it open to subjective interpretation.
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