Interesting idea - I've worked on a couple simple incubator type tokens as hypothetical exercises (and I actually have the INCUBATOR, KICKSTARTER, CROWDFUND etc tokens reserved for such projects on the counterparty platform.
As a rule, I do not like schemes that involve using profits to buy back the token, because the broad spread of the token is actually a big legitimizing factor. The more hands which posses a given token token in amounts to make them feel part of it, the more valuable it is to work with that incubation platform since the token holding base = the initial audience that will care about it.
When you're launching a token you are creating an ecosystem so rather than thinking "it will have little demand because it has little utility besides as a fundraising vehicle for my immediate needs" I would encourage you to think of ways to give it utility.
The most obvious is to use it as a first class citizen with which to acquire rewards in endeavors that launch through your system.
So I would bring my art project to you and I would ask for funding in exchange for selling tickets to my exhibit in ARTSTART coin as well as bitcoin and dollars. The value of ARTSTART coin would float with the market, so there is no exposure risk to the artist and there is utility for the token.
The artist would of course get to keep and do whatever they want with the ARTSTART they raise, and they could offer multiple things including more hard-to-value things like "Hanging out at the studio for an afternoon" or "A Skype call to talk about influences" - These should be priced on an auction basis because its not about value so much as it is relative demand in the ecosystem. Imagine putting on an art show and auctioning the pieces for ARTSTART at the end via a website with a bunch of auction vending machines.
So every time a new project launches on your platform, its like a new groupon for all the coin holders except they already bought the tokens and just need to decide if they like this deal or want to wait for a future one.
Pretty sweet gig, and you get funded up front.
@adam, I’m don’t want to cling to traditional finance philosophy since the space in which we exist right now challenges everything we know, but I do believe in the idea that one can treat these tokens more like “stock” or “shares” as well. Rather than creating utility through an ecosystem, a valuation can be determined by the current and future dividends.
If people are rewarded for their work in ARTSTART, then I see the primary two ways of creating value for the coin is by either creating an ecosystem in which it has redeemable value, or using it as a means to distribute dividends proportionate to the work that an individual has contributed.
I think the ecosystem approach for LTBCoin is brilliant and I see huge potential in that token as I have an enormous amount of confidence in the Let’s Talk Bitcoin team, show, and vision (I started listening around episode 2 and haven’t missed one yet). I also see some great challenges with creating an ecosystem as an individual.
In my ideal scenario of using ARTSTART as a means of distributing dividends, it would work something like this:
- Content creators are paid in ARTSTART for their work.
- Content is distributed on a website and monetized with advertisements that pay in Bitcoin to a public address.
- Once the funds reach a certain threshold (maybe 0.01 BTC) the funds would be automatically distributed as a dividend to the holders of ARTSTART.
The value of something like this is that individuals can see exactly how often dividends are being paid and can begin to fairly evaluate the cash flow (or rather, "bit flow”). Of course, they would also need to know a precise distribution rate to be able to price in the effect of diluting the shares. In this way, I also would not need to necessarily have a hard cap on the number of shares, just a predictable model where the dilution is transparent.
It seems like it could be easy to “game” the system by sending large amounts of BTC to the address and knowing that the dividends will be higher and thus causing the market to overvalue the shares, but any unusual spikes to the funds being received at the address should be transparent, particularly if the advertising revenue is able to be paid daily or weekly.
To incentivize the early adopters, either a larger number of shares of ARTSTART are distributed at the beginning, or their could be a distribution of ARTSTART shares to shareholders each time someone is rewarded with ARTSTART.
Example: Bob and Charlie each have 10 shares of ARTSTART and there are 20 shares total. Dianne does some work and is to receive 10 shares of ARTSTART. Rather than having Bob’s share be reduced from 50% (10 of 20 shares) to 33.3% (10 of 30 shares), I could distribute an additional 10 shares to current shareholders. So Bob would receive 5 shares when Dianne receives her 10 shares and he would then have 15 of 40 shares which would be 37.5%.
I may be overly focused on preventing shareholder dilution in this post, but I think if you’re treating the token as a means of distributing dividends and will not necessarily have a finite supply, dilution becomes a critical component in evaluating value.
So the tools I am currently missing in this plan are the following:
-
a more robust only advertising system that pays in Bitcoin, or a transparent system of using traditional online advertising (i.e., AdSense) and automatically converting it to Bitcoin
- a tool that automates the distribution of dividends on Counterparty
I can also see a version of this project where the function of ARTSTART tokens as a means of distributing dividends is not mutually exclusive from the idea of a creating an ecosystem. If there is a dividend stream, then you can create an approximate valuation of what each token is worth and choose to accept it for goods or services within the community as well.
One of the things I like most about this approach is that I’m not fundraising so people aren’t risking any money. People are only risking their own time to be creative, and if you are creating something to share anyways, then it strikes me as being minimally risky as well as allowing creators to share in any profits from the very beginning.
