A Couple of Words on the Fair Sale of EOS

Yesterday I had a chat with Hive account@dan on EOS's Telegram Chat, discussing what "fair" means, as far as the distribution of the EOS tokens. Some of you may be surprised by the different interpretations of a single word, so I will try to summarize our discussion. This is a clarification article and I will neither throw brown handfuls at Dan, neither try to defend my or his understanding of the term "fair", as far as EOS's initial distribution is concerned.

After looking at EOS's Draft Contract on GitHub, I was a bit perplexed by the following distribution example:

20 EOS are available during the window
Bob contributes 4 ETH
Alice contributes 1 ETH
Bob contributed 80% of the total contributions and gets 16 EOS
Alice contributed 20% of the total contributions and gets 4 EOS

By "window", you should understand one day, during the 341 day long distribution period.

Following this example, it is clear that "fair" distribution means that the more a person invests during the window, the more EOS he will be able to obtain. On certain days, there will be well funded investors, optimistic about the future of EOS, who will be willing to invest (let's use the appropriate word here - "bid") a large amount of money, effectively raising the price for everyone, who placed their bids during this window.

So, on some days, you will get EOS at a higher price, on other days you will get it at a lower price, but eventually, if you bid every day, for 341 days, you will get a somewhat average price, which should be true for everyone participating (which questions the necessity for such a long distribution period).

So, in this sense, "fair" means mathematically "fair" - if you invest a lot of money, you will get more EOS.

Now let's take the above example and change it a bit:

20 EOS are available during the window
Bob contributes 400 ETH (because he is a millionaire, 120,000 USD are fine)
Alice contributes 10 ETH (because she can't afford to invest more than 3000 USD)
Bob contributed 97.56% of the total contributions and gets 19.512 EOS
Alice contributed 2.44% of the total contributions and gets 0.488 EOS

This is still mathematically sound.

But doesn't allow Alice the same opportunity to invest in a new currency, as Bob has. So in no way can we talk about socially "fair".

To elaborate on the above statement - if you are rich, you will have the opportunity to be richer; if you are not, EOS will not give you the opportunity to repeat Bitcoin's success. There's no social innovation to this project, no "Power to the people", "Cyber Robin Hood", "Hackers" (the movie), "Take Down the Man" and "Banks need to be destroyed by decentralization" feeling or opportunity. It is just a business project.

Certainly this whole EOS hype will bring a lot of money to Dan and the investors backing the project - after all, they've designed the distribution in such a way, as to have people fighting (bidding) over EOS's (unknown and speculative) value. And I understand that - it was his work and the investors' money, and they would like to sell their new product for as high a price as possible.

Which brings me to another point. Bitshares was created in 2013, in 2016 we saw Steem (and Steemit) and in 2017 we will have EOS. I truly hope Dan has the time to take care of his projects and not abandon them, but if one thing is clear, following Bitcoin's success story, it is that developers are creating one cryptocurrency after the other, making huge money from people's dreams.

Check out some of my previous posts: