None of this is financial advice. I am not a financial expert, nor should you read this with any expectation other than entertaining yourself with my observations of the Koinos blockchain.
If you’re new, welcome! Otherwise, welcome back to my ultimate guide series which is a “deeper than most” dive into the Koinos Blockchain. These guides are information packed and specifically geared for people who enjoy and need heavy amounts of information before making any decisions.
To read this document, you must be a student of knowledge. You must also understand that the process of “selecting” which projects have the highest likelihood to succeed is very much a game. There are winners and losers which means there are also players. Which player are you and what are you willing to do to win?
For some, the game is easy because they have outworked other players. For others, the game is easy because they exploit unfair advantages. In this game, my
objective with these “Ultimate Guides” is to reach out to the players who are willing to out work everyone else. Koinos offers a rare opportunity to play in a level and fair field so the only way to be better is to outwork everyone else in my personal opinion. This is why my ultimate guides are not for everyone.
But to start, I’d like to first introduce myself since I feel its important for you to understand who I am. If you don’t care, feel free to skip ahead to the “How it started matters”.
WHO I AM
My name is Kui and I am the co-founder of Koinos Account Protocol or KAP. You can read our whitepaper and find more information about our project and at https://kap.domains. I am $KOIN token holder and I have skin in the game.
IRL, I am a Professional Engineer practicing structural engineering for the last 10 years in the City of New York. I like to share that bit of information because the structural engineering industry requires massive coordination to be successful in and our job requires a high level of effort to conduct safely.
I’ve been involved in blockchain since 2016 as a hobby and have seen the crypto industry go through its up and downs. During the pandemic in 2020, I became heavily involved in the Koinos blockchain as a community member during its testing and launch. I tested all version of Koinos test net and helped foster the Koinos community in its early days and still do. I’m now a co-founder of KAP.
In this document, I hope to share my view on what has lead to the current structure of the Koinos ecosystem. While I am a not a professional analyst, nor am I an economic guru, I believe that my observations provide insight to many.
I assume that the reader has already read my Ultimate Guide to Koinos before as I will periodically refer to information contained in that reading.
THE BEGINNING, MATTERS.
When Koinos first debuted, the team was wholly against receiving outside money. The impact of this decision was wide spread with many pros and cons, even up to this day and it has been a topic of sore discussion by the blockchain community.
Not receiving outside money means that the team did not perform an ICO, did not receive any VC funding, nor did they perform any private sales. The principal con to this is that the team had to burn through their own savings to survive the development period that ultimate lasted from October 2020 to November 2022. This also means that the team does not have the ability to buy their way to marketing success like many other projects.
Self funding a startup typically puts the founders in the mindset that failure is not an option. Further, we must appreciate that founders give up the opportunity for steady pay, health insurance and 40 hour work weeks in hopes of successfully creating something that solves a real problem. In this case, that problem was the need for a zero-fee smart contract, general purpose blockchain.
While we know Koinos Group succeed in the present, that outcome was not clear then and this uncertainty played an important role even to this day. I call this the “cost of decentralization”.
THE FAIR MINE
Due to the early decision of Koinos Group to forgo funding, the $KOIN token could only be freely distributed. Because the chain was not yet built, holding the token was nothing more than a show of solidarity with the team’s vision to create a more decentralized future through their free to use blockchain.
While it is easy to criticize this decision in hindsight without context, I’d like the reader to focus on the next subsections which discusses the outcome and nature of the distribution. Both of which are ultimately the reality we live in and not “what-if” cases that do not exist.
Purpose and Intent of Fair Mine
This is going to sound harsh, but it is the truth that no one can really deny. The entire blockchain is still a nascent industry and by numbers alone, it is almost entirely fueled by speculators and participants who are not actively working towards improving the ecosystem. None the less, these are important players in the grand scheme of things.
The fair mine, in my opinion, was the best compromise to attract a community with a common goal. If holders wanted the token, it was free, but they had to actively go get it. This also means that holders needed a basic understanding of blockchain concepts. After all, if you don’t understand blockchain, it will be hard to appreciate decentralization.
Which community best reflected this ideology the best? It was clear that the Ethereum community was the best choice, which is why the fair mine launched on ETH. But let us not forget history! At one point in time, smart contract platforms did not exist. It was the small Ethereum community who pioneered the smart contract platform and they too were laughed and scorned for such an idea by the Bitcoin community. In many ways, this was what many projects including Koinos had to endure.
Comparisons to other distribution methods
While I won’t do direct comparisons with other launches, there are may critics who like to point out the flaws in the fair mine approach. These critics fail to understand the purpose and intent of fair mine is the same as their suggestions, which may include CAPTCHA mining, faucets and air drops.
To briefly address this, here are some of the outcomes of fair mining that are similar to the other aforementioned free distribution methods:
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Free tokens: This method negates the effects of “restricted sales” to VC type holders whose sole intent is to fund development and profit by dumping on retail token buyers who serve as exit liquidity.
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Predatory speculators: It’s more likely that any free distribution method will attract the least amount of predatory speculators since the level of effort needed to get the token is so low. If I can get it for free, what advantage does a predatory speculator have?
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Open Market Dumping: The nature of fungible tokens is that they can be dumped on the market regardless of how they are acquired. This is a massive pro because it creates a bottom in which to build a strong foundation on.
Holders should be aware that no free distribution method negates any of these three possibilities entirely, so almost all of the suggest methods are reasonably comparable when the purpose and intent is to level the playing field as much as possible.
The Outcome
Reminder that I am not providing financial advice and I am not qualified to provide investment advice. My statements are merely my own observations and views.
Since access to the token was unrestricted, $KOIN holders do not appear to have the same appetite or urgency to dump the token because the volume might be so low that they cant get it back.
Eventually the price of $KOIN will rise to the point where existing holders will profit take, but bare in mind that the selling wont be from the hands of VCs whose sole purpose is to provide returns for their fund. Meaning they will sell and they will sell hard. This is a big deal because very few projects offer a compelling reason to hold.
HOLDING OF $KOIN
Despite the recent rise in price and volume of $KOIN being traded on MEXC, existing holders appear to have a strong grasp on the token because of the Mana property.
I believe that existing token holders wish to benefit from the Koinos economy through Mana sharing which requires users to hold $KOIN. For those who arent already aware, Mana sharing allows access to the Koinos blockchain without requiring the other party to hold tokens. KAP refers to this ability as “tokenless access” which is discussed in our whitepaper found at https://kap.domains.
As a co-founder of KAP, I am keenly aware of this potential and we are actively developing the tools to make this feature simple and easy to access. Because Mana can be shared without transferring tokens, and no tokens are ever lost, most users appear to hold onto their $KOIN so they can profit from sharing Mana instead.
This is very much unlike any gas type token such as $ETH, which must be spent to create value within the Ethereum community, $KOIN must be held to generate value. This widely understood requirement is key to why $KOIN volume has remained low. For new users, this feature is not apparent.
When new users and projects realize the ease of using the Koinos blockchain due to Mana sharing, they will likely want to buy and hold $KOIN. Our goal as early developers is to simplify access to Mana sharing as much as possible. This lays the foundation for exponential growth in both price and user base.
Massively in Profit
Another obvious point is that the majority of $KOIN holders are already in massive profits from acquiring the token at LOW prices during its early pre-main net days. Token holders either fair mined the token and got them for free or paid pennies and watch the project grow since its debut as a concept in 2020.
Despite being in massive profits, we simply don’t see much sales because holders believe that the potential for upside is much greater if they simply hold. This is because of the effort of key community developers and because they believe in the ease of access in which Koinos offers.
Further, my understanding is that the majority of token holders simply refuse to sell until enough time has passed to allow $KOIN to showcase its features.
I believe that that the first step to showcasing its features will involve the launch of 3 primary projects:
- KAP (Name service + Smart Wallets + Tokenless Access)
- Kollection (NFT trading platform)
- KoinDX (Exchange + Ethereum Bridge)
Once these projects launch, Koinos will be able to provide all of the fundamental services that existing blockchain users expect. At this point, non token holders will be able to experience the Koinos blockchain in the way it was intended and described in the white paper.
In the meantime, price remains speculative unless you spend significant amounts of time understanding the history of the project.
