As mentioned in the intro, CR member, Michael “Econymous” has made an interesting proposal, initially as a forum post, seen here:
We reached out to him to discuss the most controversial part of his proposal, an inverted pyramid that seems to reward those that lost the most financially with greater governance over the ecosystem as a counter to the rich gaining too much power in a community consensus-based governance system. Here is his impressive explanation:
“One of the major challenges in the crypto space is distribution. Perfecting it has implications for stable growth, democratized governance, and incentivizing the advance of the industry. But achieving this distribution has been elusive because those with more money and power have been able to buy-out the little guy and wield their influence in ways to funnel further profits into their own pockets. The “resolve distribution” hypothesis may provide a solution to this dilemma.
The idea is controversial, so the core concept is best addressed immediately. It involves inverting a pyramid scheme to generate “resolve tokens.” The pyramid is hosted by a smart contract, modeled after Jochen Hoenicke’s Ponzi Token. The original contract is simple; sending ETH to the contract will mint bonds within the contract, and the price of each bond increases as the supply of bonds increases. Selling bonds back to the contract will burn the bonds and reward ETH. This functions as a typical pyramid scheme, because if other people buy in after the first person, the bonds of the first person increases in value, and they can sell the bonds back to the contract and turn a profit while leaving the last buyers with a smaller net worth.
The beauty of smart contracts is that they can capture that exact decline in price & use it as a multiplying variable when minting new tokens. This delivers a ratio of loss against the slope of the pyramid that meets a monetary value of distribution. Most people lose out on a pyramid scheme. So that means most people get that multiplier. By definition, “most people” is “most distributed”. And you get it at a ratio to investment.
Half of the value is that it’s distributed, the other half is that the distribution is fair to those who hold the right to a weighted vote. Another value of resolves is that they earn dividends from a fee applied to every buy and sell of bonds. The implementation of this fee is variable.
The final feature to the resolve token is that it’s centralization resistant. A whale would need an exceptional amount of buying power. As the pyramid drops, creating resolve tokens will cost less and less ETH to mint.”
In the proposal, Michael presents the “proof of weak hands” concept, which essentially proposes that the greatest losers who don’t care about the ecosystem will sell their contract tokens immediately for whatever profit they can, while the strong hands will hold on to their contract tokens even if they lost money because of their faith in the project.