A controlled amount of inflation in a token is a needed condition for long-term success

We also believe a certain level of inflation in the token is required, in order to create a mechanism for providing continuous reward to users of the platform. We very much understand the need for a fixed amount of tokens released under discretionary circumstances. We believe, however, that inflation should be a core component of a token and the rules should be encoded in an audible algorithm.

In fact we have noticed that public sales investors are usually crowds pushed by hype of viral marketing campaigns, big focus on design rather than technology. Think about Ethereum itself, one of the most successful crowdsales ever: during the first year of development, few information were known, the focus was on building the technology rather than generating hype around marketing.

Not many will remember, but the Ethereum Frontier website had a huge red warning flag! The technology was not user friendly at all, as most of the tools had to be built manually. There was no INFURA, no MetaMask, and more importantly, Ether was not tradable on cryptocurrency exchanges. Yet an extremely powerful community was created and is still growing around the technology and the tokens.

Interests disalignment in the current token model

Given the unique skills required to evaluate a blockchain project (finance, game theory, smart contracts and software architecture background), it is quite natural most of the contributors rely on influencers.

The biggest paradox is that most of the people participating to contributions are not buying the product for using it later, but rather they are just buying on the hope of getting rich quick with the hype, or just our of FOMO. Confirmation of this is that only a very small percentage of contributors are actual users of the alpha platforms.

Legal issues will arise

Non-utility tokens look very similar to traditional securities. The public sales world is still largely unregulated, but wise entrepreneurs will envision that, one way or another, regulation will come into play. And the reason is the success of public sales and speculation around the sector. Hence creating a model of shared interests protects a startup from future legal issues, and allows it to focus on delivering the technology first and leaving the door open for future funding when needed.