CLOUT Split [PRE COINBASE LISTING]

[blackstock]

There is a card in the "Large" task labeled "CLOUT Split".

I was curious if this was in reference to a token split to increase the overall supply it Bitclout tokens?

I am of the opinion that the current CLOUT price is too high and that we should prioritize increasing the supply before being listed on more exchanges. My preference would be a 1,000/1 split, taking the current price of CLOUT down to ~ $0.10/coin.

There is a strong bias in finance for retail investors to prefer cheaper tokens/coins/stocks etc. While it should be psychological, it does influence how investors view the potential upside of an asset. For example, most investors think it's easier for a token to appreciate from $0.10 -> $1 as opposed to a token appreciating from $100 -> $1,000 (both a 10x increase). We see this play out with cheap tokens all over the Crypto landscape and even in traditional finance with Penny stocks.

I think CLOUT should be a fun, social currency and should be priced such that the majority of retail investors can buy large quantities of whole coins. And as irrational as this sounds, buying 1,000 CLOUT for $100 is more satisfying than buying 1 CLOUT for $100 - at least for a material number of investors (myself included).

[tijno]

Ive been curious about what that card is about.

Note that only a few months ago we had the opposite:

deflation bomb

which reduced supply considerably.

Clarification on the intent of that card would be welcome.

[blackstock]

Cheaper CLOUT could translate to more users and adoption because users feel like they are early and have higher ROI potential, which would lead to a more balanced distribution.

This isn't a new idea, the majority of top-100 projects have over 100M in circulating supply. Of the top-100 projects, only 4 projects have a smaller circulating supply (Yearn, Maker, Compound and Kusama).

I believe this is a limiting factor with Clout right now - it feels expensive for a token/coin that few people have ever heard of.

Are you opposed to splits in general, or just a split of that magnitude?

[blackstock]

@maebeam @diamondhands0 @redpartyhat any insight you can share with this particular "Large" CIP?

[tijno]

@blackstock

Are you opposed to splits in general, or just a split of that magnitude?

I guess for me turning a $100 coin into a $0.01 coin feels like we want to turn bitclout into a penny stock. I dont feel thats the right value proposition for this coin.

It may help with people betting on it on exchanges - but I dont see how it helps users to actively be onboarded and using bitclout.

Eg to get started - they need sufficient balance to to 3-4 weeks of posting probably. Right now - with just 0.1 clout and they can keep going for a while.

If price is reduced 1000 fold they will need 100 clout - which could be seen as "oh my this is expensive to post".

Thats just my personal feeling about it. I appreciate that i may just be a lone voice.

However - what is important is how you think it would affect creator coin prices and the bonding curve.

Could you elaborate on that?

[blackstock]

@tijno I don't think this would impact the quantity of creator coins. It would just impact the amount of CLOUT that purchases/sales are denominated in. So, for example, instead of the first creator coin costing .1 CLOUT (or whatever it is now), maybe it costs 10 CLOUT. I'd need to look at the actual bonding curve math, but in my mind, this doesn't seem like a big refactor.

And maybe a 100-1 split is better if you're concerned about penny stock optics. That'd bring the current CLOUT price to $1/token at the current market cap of $1B ($10/token would translate to a $10B market cap).

[tijno]

I feel its still optics that in my experience mainly day traders care about.
So not convinced of the benefits to user adoption.
But then again I am not the norm either.

Lets see what others think.

[tijno]

In light of the recent townhall, looks like this is indeed a 100 or 100x split.

If its going to be split - then 100x should be the focus - not 1000x.

I think 1000x will push deso into funny money / territory.

For reference - supply of top coins:

btc 21m
eth 117m
bnb 170m
sol 500m
ada 45b

Keen to understand how split would effect:

1 - creator coin bonding curve
2 - fees
3 - miner reward

Also split should be considered in light of thinking around proof of stake - it probably wont have an impact unless there was some plan around minimum stake.

Lastly - it could be perceived deso keeps tweaking the key "rules" / tokenomics. Further changes ahead as well with proof of stake. Will this reputation ally work in our favour? Or will people see DESO as typical SV break fast mentality?

[stet]

this is so funny. but i actually agree.
i also think $deso in reality is only worth less than $10 but this launch sort of bypassed reality thank to the magic of the bonding curve.
but now it is unattractive to all beyond the earliest buyers, which is a known controversy of the project.