Crowdholding

How do we prevent hyperdeflation?

How do we prevent hyperdeflation?

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How do we prevent hyperdeflation?

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In a deflationary environment, when speculators hold majority of the total token supply, velocity of Yupie transactions could get low, that it could be better to hold the token, thus tasks and our ecosystem gets stuck.

To prevent this, we want to introduce what we call the Yupie Stimpack system. We need to set parameters for this to happen and these are the first suggestions, which would utilize a two trigger system.

Velocity of the Yupie will be our first trigger warning which will be announced publicly. As you see from the equation below, is a simple way to monitor when the velocity (is number of transactions compared to tokens within system). As the number of transaction decreases, velocity slows down. We need to set precise thresholds together with you, on what is considered as too slow.

Velocity = Number of transactions/CS

*CS - Circulation Supply

This is a precursor warning before hyperdeflation occurs. Why did the DAO fail? It’s because of exactly this. Users wanted to hold so no token movement occurred. Learning from their mistakes we must present a solution. Thus, why we have trigger two in place.

Trigger two will go into effect when Yupie becomes hyperdeflationary. Below shows a hyperdeflation line drawing. The graph to the right shows ideal Yupie deflationary growth we want.


How the Yupie Stimpack works? After trigger 2 occurs, from our own Company Yupie pool, we present a lower price than the exchange for a specific period of time as agreed upon with the community. The ETH that goes into purchasing from the Yupie Stimpack becomes a pool of ETH that goes to our businesses for funding which will be chosen by the crowd. This in turn will stop the hyperdeflation and restart the economy, thus thriving Yupie movement.

The only way in the future to create a truly decentralized community we must invent and test policies for a true economy in a deflationary market. Give us your feedback on our two trigger system. Do you have ideas that could shape this? Research is needed on exactly when to act on trigger two. Do you have suggestions? When would be the right time for the trigger? We look forward to your feedback.





25 COMMENTS 15 VOTES

Most recent Most voted Most verbose

The community will never agree to see their holdings diluted, which is the wrong term to use, btw.

10 months ago

As you can see, many people are quite critical to the idea you are asking feedback about. I think the strong reaction has to do with you playing with hypothetical situations when the company should be focusing on creating real life use cases for the Yuppie.

Time is valuable money in any new company, and wasting time with tasks that do not benefit anyone prompts people to lose faith in the company.

Some areas that I suggest you focus on: tying real life rewards to the yuppie, using the yuppie to buy in shares or stocks in new startups, using yuppies to crowdsource an idea from the community that will be seen all the way to a minimum viable product, and so on.

These are the kinds of things that the community can offer a lot of good feedback on and will help crowdholding, yuppies, startups, investors, and community members all be happy about.

10 months ago

Happy to see this post.
In terms of a metaphor or as I call it a story telling, money should be a medium for interactions: the vector that holds the spark of life. Like the water. In the village of my friend Don Chapeau no one ever own money. The mean of the money was stated as for appreciating the contribution to the village wellbeing. So, in my case, as a high school teacher in this village I might be payed the equivalent of some $327,468 per week. But I'm so busy with my schooling that I can't spend more than $385. And, as I agreed by joining the community, after let's say two weeks when I'm allowed to enjoy the numbers in my bank account, 90% of my account is reallocated to the community and goes into the appreciation of other contributions who need money. Like a farmland irrigation system.

10 months ago

This is the unnecessary and mental exercise we are talking for no good benefit.

Let's get the project started first. Thinking about astronomical token prices somehow leading to less liquidity and hyperdeflation is completely unnecessary at this point. I strongly disagree that any amount of mental or technical power should be wasted on such a thing.

Sorry for strong language but are you out of your mind? You guys dont even have anything to show for. Any market to trade. You have missed on every promise that you have made so far. Get the main functionality of the plaform running first.

Once there is a potential of the hyperdeflation, create a new smart contract for the token and exchange all the tokens for the new ones. Stop wasting time

10 months ago

Speaking of which, CH previously announced that it was going to triple the number of tokens issued to participants in the ICO. What ever happened with that? I know I still haven't received the additional tokens...

10 months ago

Could you introduce token splits whenever trigger 2 occurs? That way instead of introducing new dilutive tokens to the market, you are introducing additional tokens by issuing, for example, 1 additional token to every holder of 1 token. Because the holder now holds more tokens (though each will be worth half of what it was), he or she might be inclined to use some of those tokens in the platform.

10 months ago

Stimpack sounds like Quantative Easing in monetary terms. Not good for investors.

By pegging the Yupie to the ETH investors start HODL'ing.

The Coupon suggestion by Steven De Baets below is not a bad one. You can call it coupon/reward token/goodies or whatever.
Contributors get rewarded > they convert the Reward token to Yupie on internal marketplace > and now contributor can start investing/spending
Reward tokens & Yupies are pegged in price. Ratio tbd.
You keep recycling the Reward tokens towards new tasks in the ecosystem.
As the Yupie token increases in value, so does the Reward token. And viceversa of course.
Reward token holders can decide to issue own tasks, they set reward.
Instead of investing these reward token holders become influencers in the project. They can take the project to a whole new level or take it into the direction you don't want.
Well it's decentralised, so you have to let go.
Not your baby anymore ;)

These are my thoughts and thanks to Steven.

10 months ago

good

10 months ago

Creating interest will build value but also limiting how much people have access to

10 months ago

Instead of trying to play the market, create incentives for people to use yupies (I think this should be your major goal anyways). Furthermore, this is no closed market, if the value of one yupie rises in comparison to other assets, you get more of these assets in return for one yupie and, therefore, you will be rewarded less yupies for your participation on the plattorm (this will happen naturally).

10 months ago

The trigger should take place at least after the project has been out for a year. Also we definitely need holding rules because I would be afraid of people dumping right before the price buy decrease. I just wouldn't want to see the trigger hurt the price more than help the growth.

11 months ago

I don't think I fully understand the concern, nor the solution crowdholding is proposing.

I believe that when the prices of Yupies increase, the amount of yupies per reward will be adjusted given that the value of Yup is tied to and can be expressed in USD. Thus, in case of a huge price surge, the rewards in YUP will lower. If the USD value increases, the rewards in YUP will increase.

If I'm not mistaken the main issues to consider are liquidity and trading volume. This can be done by creating real demand and incentivise spending.

Here are some suggestions:

Given that the current crypto market is driven by speculators, many projects will be economically non-sustainable in the future. We can find examples of this in our recent history of the dot com bubble. Only companies which are intertwined with real economic activity survive in the long term. Therefor it is imperative that crowdholding focuses on tying real economic value to its tokens. There are several ways this can be done; I humbly suggest considering these options:
- Companies use the tokens on the platform for tasks (as it is done now)
- Allow users to spend the tokens for coupons (e.g. amazon coupon, store coupon, etc.) Companies will gladly participate in this; as this will give them free marketing. It’s a win win situation. There are many services which provide this couponing. Creating a market place within the crowdholding website will radically increase economic viability.
- Allow users to create bounties. As you know the crypto market is flooded with regular joe’s and janes. They will be the biggest buyers of the Yupie tokens in the short term future. Allowing users to create bounties could increase demand further. However some caution is necessary and this concept needs more consideration before being implemented.
- Create a research and development team. Allow users to develop an idea from concept to reality. A lot of examples can be found (from graphic designing to actual electronics or other products). Allow a way to harvest the power of the crowd.
- Create a platform for micro tasks (Think mechanical turk (amazon), etc.)

11 months ago

Ethan Clime

CEO of Crowdholding.com

Steven... brilliant. I see the concept of tokenizing coupons, as the first step for business accepting crypto. Nice.

10 months ago

Wow, you guys are really good at shooting your feet off before even starting. You have time to focus on hypothetical solutions for hypothethical problems? Which aren't even problems at all? Or possible?

There is exactly 0 chance of an event you call "hyperdeflation". Because if nobody sells, the price can't be defined. There will ALWAYS be people selling, there will NEVER be a time when people will just hold and not sell for any price. Ever heard of markets? If holding yuc makes you x amount of money a year, it is trivial to calculate the appropriate yuc trade price y. And yes, people will trade it for a price they think it is appropriate, or what is your idea? That people will just hold forever? With unicorns shitting rainbows and depositing dollars to yuc holders, more each day?

The community will never agree to see their holdings diluted, it's a silly thing to ask for. In a comment you wrote "By increase money supply through selling more yupies with lower price will boost the YUPIE price again. SO it is actually good for you :-)". Your logic is not even logic, even in your own logic. Because the price with your intervention will always be lower than in what you term "hyperdeflation", which is the wrong term to use, btw.

Even it the case an approximation of this "hyperdeflation" happens, economy stops, people don't trade yuccies, there are no tasks anymore. What exactly will prop up yuc price then? Magic?

Also no idea which DAO you're reffering to, the DAO failed because it was useless. That it got hijacked was just the icing.

Can you please stop posting requests for feedback that make us question your intelligence?

11 months ago

Ethan Clime

CEO of Crowdholding.com

DAO was useless because people weren't willing to spend in their voting system because users of the DAO thought the token would increase in time (deflationary currency). Thus, we are looking to prevent this in the future, for our application. More work to analyze this, and focus is developing the product right now. But we wanted to plant the seed of this topic, so we can prevent issues a year from now. Our end goal after (although you are likely right we should not use the word hyperdeflation) is to create a fully decentralized market place. But if no one buys products and invests in projects in our eco-system our result is the DAO. We made the mistake of analyzing this topic too early. More to learn while we develop. Thanks for the feedback. Cheers.

11 months ago

DAO was useless because there was nothing to vote on.

11 months ago

What's DAO that your are referring to here? I don't think artificial price support or suppression is a good idea. You should focus instead on the token's use in the system and trying to make it more useful to encourage the users to transact in it as required to support the velocity.

11 months ago

I agree. The proposed solution could just end up backfiring, because poeple might just start buying cheap Yupies to hold even more of it. Best case scenario, people will start artbitrage plays.

It looks more like a temporary bandaid than solution.

11 months ago

Ethan Clime

CEO of Crowdholding.com

That's exactly what we will be focusing on. As our eco-system grows with the use of the system, investors will make huge gains, and we will encourage spending of the Yupie token. However, hyperdeflation can cause a token crash. This can happen to any token on the market. For me it's common sense to protect investors to prevent a crash using a stimpack, just like governments and banks try to have policies to prevent hyperinflation. We are thinking ahead, on behalf of all of you.

11 months ago

Sure, protecting investors is a good idea. Ever growing number of coins have to deal with depreciating price due to lack of transactional support and limited real-life demand for the token outside of pure speculation. Many projects are trying to address this already by burning or term-locking the coins. The bottom line is that you should strive for a balance of healthy price speculation and real-life token demand.

11 months ago

Can you write that article again in layman's terms? I have no idea what I just read.

Why over-complicate things?

11 months ago

Okay i will try to help you! Basically, there is fixed amount of YUPIE on the market, for example 100. If more people begin to use, it is getting more expensive. When it is more expensive, people will not trade it, coz they want to hold it. This is same as the US great depression. If everybody holding it without trading, then yupie will be close to zero value. Crowdholding solution is to sell yupies at lower price when YUP actual price is too high, so people begin to buy it. There is trade of yupie on the market, so yupie price wont drop crazy :-) a protection to all yupie holders.

11 months ago

@Yang

Thanks for the explanation. Wow, I totally don't agree with this plan then.

I would not have contributed my ETH if I had known this was part of the plan. Of course people will still trade it. That's how the open market works, supply and demand.

We want the price of YUPs to increase. Why else would I have bought it? I could've put my ETH into Tether instead.

11 months ago

Hi, i think u misunderstood. What i mean is not as u thought. It is when no one is trading yupies, and this will trigger hyperinflation that YUPIE value will drop to zero very quick. By increase money supply through selling more yupies with lower price will boost the YUPIE price again. SO it is actually good for you :-)

11 months ago

There are easy examples you can look at in the stock market - secondary offerings and issuances of new shares. When a company issues new shares at below market prices, that has the effect of causing the market prices to drop. Happens every time. So to say that the price won't drop like crazy because Yupies will also be traded on the market is not accurate.

10 months ago