Jonny Mack on Farcaster

Dan Romero pfp

The fundamental problem to solve for with personal tokens / creator coins / etc. is the psychological effect of a significant price decline. 1. Most people are not equipped to manage a liquid, global, 24/7 traded asset. 2. Current norms are that if someone buys an asset, they expect the person / team / organization behind that asset are incentivized long-term to make that asset more valuable. 3. When there's a significant price decline, many / most creators will be overwhelmed by the hole they now need to dig themselves out of. Layer on a bunch of angry, pseudonymous people screaming at them on the internet. 4. Additionally, what happens when you want to stop creating? Like Outdoor Boys recently did. Contrast to a publicly traded company where the founder retires—the value still continues to accrue. Possible ways to change this 1. Invent a new asset that's time bound. Closer to a prediction market or an option. "I'm speculating on X during period Y." 2. Change norms / culture -- this is super slow.

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Dan Romero pfp

A secondary problem: solve the norms for allowing the creator to sell. Today, if someone behind a crypto asset sells said asset, it's deemed to be "dumping" and a bearish signal. (People tend to ignore if number keeps going up.) In public markets, there are 1) planned sales (10b5-1) and 2) transparency around insider ownership (disclosed in quarterly financials). This doesn't exist in crypto yet (despite a few efforts). Consider two scenarios: a) Taylor Swift does a concert tour and generates $2B in ticket sales from her fans. That's a direct transfer of money from fans to the creator b) Taylor Swift does a concert tour and sells $2B worth of creator coin. Fans can attend the concert if they hold X amount of her creator coin. The increase in demand for the coin provides sufficient increased market cap / liquidity for the creator to realize value. In scenarios A and B, the creator realizes the same amount of value. But in scenario B, current norms make this feel bad, whereas scenario A is normal.

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Jonny Mack pfp

scenario b is significantly more complex, on multiple dimensions. why would the creator or the consumer want that? what additional value is being added in exchange for that complexity?

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Dan Romero pfp

*in theory* you would reward the early fans who went to earlier shows before the creator became a star. so they participate in the upside. to be clear: I’m skeptical but with perfect execution seems plausible.

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Jonny Mack pfp

how would early fans be rewarded by participating in the upside? by selling the tokens they bought prior to the creator becoming a star to fans that want to buy post-stardom? if that's the case, then the $2B in your example wouldn't be 100% realized by the creator, but some combination of creator + early fans (a net worse outcome for the creator) so even with perfect execution it seems... implausible?

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Ok, Jose pfp

the fundamental problem here is that we're shifting the premise for the exchange -- as a ticket buyer, my expected reward is a great show. as a coin buyer, you're creating a scenario where my expected reward isn't known until i either redeem access to the event or sell at whatever level i decide to.

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Dan Romero pfp

Sorry I meant to say they sell $2B worth of their portion of the token. So market cap would have be to be *much* higher. That’s the issue — big market cap with thin liquidity means the value that can be realized without a massive price impact is quite low.

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Garrett pfp

I think it’s more akin to having your fanbase participate in the upside if demand outstrips supply Creators would also like a mechanism to dynamically capture value if they price their tickets or merch lower than the market demand Very tough execute this simply and efficiently but i think it could be done

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