[DRAFT] SIP 0009 - Evolution Sale

I hereby submit my proposal for a programmatic sale on Ethereum as the final programmatic sale prior to the tokens becoming generally tradable.

Among other thins, I propose to have this sale on Ethereum. I think the funds could be used to fund a Uniswap liquidity pool. However, i think that is debatable, and a separate question from the rest of the SIP. So perhaps it will be best to publish a separate thread on that matter.

I look forward to your comments.

The proposal can be found here: [DRAFT] SIP 0009 Evolution Public Sale - Google Docs

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Here is a handy-dandy sheet you can copy and modify if you want to play with the numbers.

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I disagree with the proposed pricing of 12-15k sats as I believe it is unfairly cheap compared to the previous price increase. It is very likely that SIP 6 will pass and therefore the following is assuming it does:

For context, Genesis sale was priced at 2.5k sats per SOV and then we have witnessed an extremely radical price increase in the Origin sale - up to 10k sats per SOV. It’s needless to say 4x increase between presale rounds is very rare and, to be fair, Sovryn might be one of the few (if not the only one) projects this year that have chosen this radical of an increase this year. Now, many people have called that to be way to expensive for a presale round, but I think people still understand that, due to the exceptionally high potential Sovryn possesses not only to us, but also to the crypto world in general, it is still well worth it to get involved. And so even if many people are vocal about it, they were still happy to participate.

The team justified this 4x increase by saying that they may have mispriced the token and that the demand is way more than anticipated. It’s basic supply and demand - you keep increasing the price until fewer people are interested and you have found an equilibrium between supply and demand. Well, it appears that Origin sale was equally successful and oversubscribed, just like the previous genesis sale. Of course you can argue, that Genesis sale sold out in minutes, whereas Origin sale pre deposits took over 24 hours to fill, but that is mainly due to the new pre deposit system we have decided to incorporate. Had all the emails been sent at once, I’m certain the pre deposit would have been filled in a matter of hours, again. Furthermore, just by browsing discord / telegram chats you will find that dozens of people were not able to participate - i.e. demand was greater than the supply! So now, when it’s clear that the team’s original rationale for a radical price increase (demand greatly exceeded the supply) is still present, I strongly feel we should have another price increase of similar proportions. Maybe not 4x as it was previously, but I believe 2.5-3x would be fair - 25k -30k sats. Otherwise, I do not think it is fair towards earlier participants.

I suspect that many other community members who love Sovryn, but do feel that the Origin sale price of 10k sats per SOV was a little steep, will have similar thoughts… That’s something we cannot influence anymore, but what we can do, is to make sure all the subsequent sales are priced fairly when compared to the Origin sale.

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I hear what you are saying - but I’m not sure why a smaller price increase would be unfair? If the price is indeed very underpriced, the token price will appreciate naturally in the market, so Origin sale participants will see the same price rise in both cases.

How would this negatively impact Origin participants? Do you think the main risk is a perception risk, and if so, what is the negative perception that might arise, and among whom?

For starters, for many it was very challenging to pre deposit btc in the Origin sale due to lack of experience and knowledge. While Sovryn makes it a little easier through their guides and resources, the amount of requests for help in chat was indeed overwhelming - as for most this was the first time they have interacted with RSK. Creating new types of wallets, changing metamask network settings and other - compare that to a comfortable sale on the eth network where everyone knows exactly what they’re doing. If anything, this adventurousness of users to venture out of their comfort zone should be rewarded with similar or higher subsequent price increase, not smaller.

Yes, just like you mention, it is expected that the token will appreciate naturally, but what my suggested price increase does, is that it gives more confidence to the (Origin) community. Your risk basis as an earlier participant is then way below the entry point of those, who joined later after you (when it could be done the easy way through eth network), which is how it should be imo. This way, you can stress a little less, knowing that a certain price floor has already been established.

With regards to your question about negative impact towards Origin participants, that relates to my paragraph above. Given that the team’s original rationale for price increase is still present, I simply feel that this discrepency in price increase would not be viewed well. I did see a user mention in our telegram chat that they do expect public sale to be priced with a similar price increase, so if more people feel this way but are just silent, this could create unnecessary tension between our early community of Sovryns.

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Thanks @FearCzech this is illuminating. Your thoughts on creating a price floor are interesting.

I would raise a possible downside - what if we price too high by mistake? Then the price might not rise in the markets as much and wouldn’t that make the perception of the project worse?

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Also, isn’t a 50% increase in BTC terms and a 100-150% increase in USD terms in less than a month crazy enough already?

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Yeah, there is always a risk. Depending on our decided price and/or possibly macro market behaviour, there may be a short term downside. However, as it has been emphasized several times, we have an ambitious project and are interested in building a long term community. We’re not here to please those, who came looking for a quick flip. Imagine if we capture just 1,2 or 3 % of btc marketcap - it will be physically impossible to have invested at any point within weeks of public sale and still be at a loss. Plus, if we establish a higher floor now, even in the case of a possible downside, your true Sovryns will be safe - back to my point about talking about their risk and entry price.

So I guess we will always have to make compromises.

Lower price now can make your early community a little unhappy, but public sale participants happy. Higher price now will give your early community comfort, but can make public sale participants short-term unhappy if we face a down side. To me it’s pretty clear that dedicated early Sovryns should be more important, but that’s of course for everyone to decide / agree on.

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To me, the increase is absolutely crazy, for sure. And to many others clearly it is, as well, as we have seen dozens of comments in telegram questioning the 10k clearing price. But, it is what has been previously decided on and so for consistency reasons, I suggest we (at least roughly) talk about an increase of similar proportions (at least a 2x).

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I echo these sentiments entirely, I also think a clearing price of maybe 15k-25k sats would be fair to origin sale participants. As @yago mentioned the price could indeed increase but it could also head in the opposite direction and the Origin sale participants deserve some protection as early believers in the project. The 10k clearing price has been the cause of much discussion and I think 15k-25k sats would be much appreciated and a show of good faith to the Origin sale participants.

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I largely agree with the call for higher prices, but I am worried of one possible danger:

If we keep raising the presale price, we might unknowlingly be creating a massive bubble since we are not yet fully aware of how the market receives us. There is a risk that due to limited presale supply, people fomo in, yet when it hits the market, the price will drop because we put presale too high.

One advantage to putting the price lower is you potentially create a sort of “united” demand zone, whereas if you put the last participants at too much risk, they are the first to bail and create sell pressure.

Conversely, if all works smooth, the rapid increases in presale prices set us up for even more rapid appreciation on the real markets.

Both perspectives are to be considered in my opinion.

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We’re not raising ‘‘presale’’ price, keep in mind the Evolution sale is the public sale and likely the final sale there will be. Plus, it is the most common for projects to increase pricing from presale to public sale, not from one round of presale to another.

I do like the idea of how correct pricing accelerates market appreciation, very well.

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Thank you for the correction.

Good point.

I think there is asymmetrical risk here. The risk of pricing too high is greater than the risk of pricing too low.

If we price too low, then no big deal, price rises in the market, and the price of the Origin and all other sales is soon forgotten.

If we price too high, on the other hand, the price fails to rise as much as people expect or even falls, and there can be a loss of the amazing momentum that we have built.

However, having a higher price for Evolution can, I agree, create its own confidence and momentum, so there is that.

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Yes, the scales are a little more weighted to one side - that is why I propose we should not follow through with the exact proportionate increase as previously (4x), but rather slightly less (2-3x), in order to offset the risk. But imo it should still be a very significant one and I’m glad to see others have been vocal about their opinions, too.

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I agree with @FearCzech

The difference between genessis and origin is big, a lot of ppl were confused at the presale instructions but made eventually made their deposits with huge help from your community admins (you have very understanding ppl there and they helped out toonnnssss of people) and I think they deserve a pump from origin to public price.

I belive that the price could be 30k sat so you give the origin people some edge it is not a big increese and public launch would still be a success. The given market conditions will prepell this price in no time. If we launch soon that is.

Maybe it really is a 50 50 thing here. But i am still for a price increese to 30k sat. But I 200% trust that any decision you make will be the right one.

Just my 2cents and I am sory about my broken english🤦🏻‍♂️

GO SOVRYN :muscle:

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Honestly guys, in spite of your arguments, I get whiplash at 20k sats. (I also got whiplash at 10k but now it makes sense, something to bear in mind).

Perhaps instead of looking at relative numbers we can look at absolute numbers.
Price increase from Genesis to Origin was +7500 sats.

Making the same increase in absolute numbers (17500 sats) would maybe be a compromise that caters to both sides?

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I think you have something there

I am very glad to see all these responses. I am particularly pleased that people are disagreeing with me. It leads to stimulating debate.

I have published a thread on the question of price. I would like to see deeper consideration of this point.

I think that while raising the price from Origin is a consideration, it is not nearly the most important consideration. I am concerned it may be too short term focused. The key question, I think for all stakeholders and for the project, is setting up the project for success - and this includes success in the market.

Allow me to describe a scenario - we launch the SOV/BTC market on Sovryn and people find it difficult to get RBTC. So a few people decide to sell, and there is not a lot of demand (on the platform) on the other side. The token value could fall, even if there was actually quite a bit of demand.

Another thing we should take into consideration: The token price is currently attractive to us, becuase we already understand and believe. However, future buyers might still need to be convinced, and higher prices need even more convincing.

To me the difference between Genesis and Origin, as a lens to look at Evolution to Origin is maybe the wrong lens. I would like to see more discussion of what we do to make Evolution to Open Market most successful.

I would also remind everyone that we didn’t know Origin was going to end at 10k. That was the highest possible price. The floor price was 3k sats.

Thoughts?

I think @AlykzAlex makes a good point - the absolute numbers are important.