Venture investor described Ethereum killers as “toothless” based on the assignment of tokens to those involved in a project

The founder of Myth Capital, Ryan Sean Adams called the Ethereum killers “toothless” (lack of strength), Citing initial tokenization schemes that often prioritize those involved in the project:

Source: Twitter.

Adams se referenced to a recent report by Messari summarizing the token distribution of some of the most popular alternatives to Ethereum (ETH) released over the past two years. There are four main categories of distribution: public pre-sales, community assignments, people involved in the project, and the specific bases for each project.

Source: Messari.

The authors of the report suggest this The proportion of tokens allocated to the people involved in the project (team, company and venture investors) is crucial in evaluating projects. “Projects that distribute tokens to the people involved in the project (team, founders and investors) at the expense of the community are disadvantaged.” You 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 sizeable.”

Venture investor described Ethereum killers as “toothless” based on the assignment of tokens to those involved in a project
Venture investor described Ethereum killers as “toothless” based on the assignment of tokens to those involved in a project

Furthermore, The authors argued that all of these blockchains (with the exception of Kadena and Nervos Network) use evidence of consensus that they believe only exacerbates the problem:

“The realignment of the stakeholder relationship to the network community after the start is an uphill battle that can be more difficult for PoS networks (Proof-of-Stake), as early stakeholders have a constant right to the Lordship”

For example, the report states that, Placeholder Capital prefers projects where between 20% and 30% of the token offer is intended for those involved in the project. The average of the twelve platforms above is 43%, and only Kadena and Edgeware meet the stated criteria.

Ways to ensure that new cryptocurrency projects get a fair start have long been debated. Although Messari and Adams seem to be praising Ethereum’s launch, a The Bitcoin maximalist will be quick to point out that a significant amount of ether has been pre-mined. Others could argue that Satoshi Nakamoto has managed to mine a fortune in Bitcoin in an environment where there is virtually no competition.

In this case, it’s more about determining what type of layout will produce the best possible results for a project. A significant allocation for those involved in the project has opportunity costs. These coins could instead be used to create incentives for the community. Furthermore, The parties involved often receive their tokens free of charge or at significant discounts. This allows them to sell early, which leads to a drop in prices. The entire topic of the token economy 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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