[Gateway Proposal] Scrap Pylon Scout

With the release of the new Medium article talking about governance, I think it’s important that we put our money where our mouth is – governance never voted on Pylon Scout and the community has been very vocal about how it will do more harm than good.

Pylon Scout is effectively an auction where new protocols sell a fixed number of tokens and investors deposit UST with the ultimate price being set at Total UST divided by # of Tokens. The idea being this is a “fair” launch where any number of people can participate with everyone getting the same price.

The problem: People ape into the launch expecting “IDO returns” (like Nexus), only to dump when they don’t see the price going up. This is compounded by the fact that this mechanism sucks all the buyers out of the market (i.e. everyone has access) so no one is there to buy post launch.

This isn’t a theoretical problem either – Party Parrot on Solana was crushed by this and the ensuing FUD that was generated. Yes, there were factors at play (low initial liquidity) but the discord group quickly turned from upbeat and hyped to toxic. This left the team doing constant damage control rather than putting to work the large amount of capital they just raised.

This also isn’t dissimilar to the current NFT problem Terra is facing – floor prices plummeting instantly after launch and screams of “sweep floor” drowning out the team trying to execute their vision.

A secondary problem is that this model does nothing to reward MINE stakers. Unlike the first problem this one is readily solvable – large airdrop of tokens for stakers, minimum staking amounts with caps on amount you can invest; however, thus far there’s been no suggestion that the team intends to solve it.

Tl;dr: Pylon Scout’s launch should be put to a governance vote before rolling it outand the team should write out a detailed post about how they intent to solve the clear problems & how it will be beneficial for MINE stakers.

This is exactly the point of having a governance system. The medium article says you’re serious about using it, then use it.

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I also agree this should be voted on governance. Then we will see what the community thinks about it and the governance will be properly used.

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A simple text based governance is trivial in this case.
As I pointed out in the gateway topic here the end goal should be parametrize the gateway and in this case scout so that an ido proposer can submit his proposal and governance vote.
Gateway parameters are relatively easy for the pylon scout we have to discuss a bit more. I would check the mars lockdrop idea for example and see drawbacks. For sure do not define a fix rule but parameters that can be adapted case by case in the proposal and voted accordingly.
Always there are 3 main actors, mine stakers, ido creators and pylon users. Pylon need to look for the best for all three to thrieve and promoting an active governance is the way to go.
Scout, well designed, can be a very good idea.
Should we create its own topic for defining parametrized smart contract for gateway and scout? And all what is coming next?

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That’s my point – the Pylon team should be putting together a complete proposal on their implementation views and subjecting that to a governance vote. The proposal should include how they plan to parameterize it along with the controls available for IDO creators.

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Isn’t part of the problem here a lack of expectation setting and education by the protocol’s that want to launch via Scout? It’ll be in their interest to have a satisfied core, so I’d hope they would discuss risks/benefits/strategies prior to the event. As a potential long term supporter it be a red flag if all I saw going into a launch like this was all “ape-in” messaging.

Protocol’s educating users prior to launch goes a long way. I was part of a Liquidity Bootstrapping Pool where the team explicitly messaged things like… don’t get rekt, here’s some potential strategies to use during, etc.

re: Benefits to Mine stakers for this style of launch. The Pylon <> Prism medium post has a section “How does this benefit MINE stakers?” where it mentions that with 3 launches there would have been 76% return in the form of $26.5m in buybacks. That seems like a pretty tangible benefit.

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All the auctions I’ve been part of have been a dumpfest (except GRO protocol).

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Thank you for sharing this, Pylon Scout clearly has a benefit for MINE stakers as outlined in the article you shared. Moreover, offering Pylon Scout provides Pylon with a competitive advantage. With that said, Pylon Scout could definitely be improved to better meet the needs of people contributing and MINE stakers.

Ultimately, I think scrapping Pylon Scout is quite a bad idea.

Here are a few points to note.

Relating to Prism’s launch.

  • Pylon Scout was 100% created by Prism and the code is being donated to Pylon for free.
  • Prism has stated several times now that they are going to use the scout model they created, and that they will either launch it via Pylon (with Pylon Scout) or instead do it themselves on their own platform.
  • Prism’s Pylon Scout launch will provide a significant amount of revenue for Pylon that will be passed on to MINE stakers. The alternative is to not receive this revenue and ALSO not receive the Prism airdrop for MINE stakers (as they wouldn’t be launching on Pylon anymore).
  • Prism has raised $0 from private investors, so everyone including whales and VCs has the same entry prices and opportunities. Although the model has it serious drawbacks, it is at least fair for everyone.

All in all, I do agree with you that this model is flawed and has serious issues (though all models have their own drawbacks). You did a great job outlining the shortcomings of this model and I also share your concerns. However, this is PURELY Prism’s choice as they’re going ahead with this model regardless of Pylon’s involvement, so Pylon may as well hold it on its platform so MINE stakers can at least benefit from it. Unfortunately, this hasn’t been communicated well to the Pylon community.

Related to future Pylon Scout launches.

  • Pylon Scout is very similar to a LBP model of raising funds for an ICO. Astroport is launching soon and will provide an LBP fundraising model for Terra projects to use. Pylon can at least provide an alternative for Terra projects looking to raise funds with this type of model by having Pylon Scout as an option. This way Pylon can provide a competitive alternative to Astroports LBP whereby MINE stakers at least receive some benefit. The alternative for these types of projects is that we receive nothing at all.

All in all, I agree that the Pylon Scout model has issues. My solution to this though is to tweak the model so that it 1) provides a level of special access to contribute to the launching project for MINE stakers, 2) tweaks the fundraising mechanisms so that it helps reduce the issues you outlined. This way MINE stakers at least get some benefit, whereas if we scrap Pylon Scout all together we stand to receive no benefit at all and instead give it all to our competitors.

Does this change your thoughts on scrapping Pylon scout at all @ActiveInvestor?

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You raise extremely valuable points, notably the one about this being Prism’s code which I feel has not been communicated well at all.

I think your summary points strike exactly at what needs to be done and why my post is more about submitting Scout to governance (so that comments like yours can rise up and be incorporated) rather than simply scrapping and not looking back.

The argument that “look at the fees it’ll generate” falls well short – a 76% return off 3 IDOs is nothing compared to the 36x return generated from Nexus. I’m not buying IDO platform tokens so I can make a modest return off that capital, I’m buying them for access to low cost IDO token prices.

MINE should be like a pass to a club that has the best access, not an investment in the hopes they can attract dozens of IDOs to pay the bills.

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It’s clear Pylon is not the only launch platform, and further, projects are ready to launch on their own, heck they are also building their own tools (scout).

When the choice is between having Scout and getting to launch Prism, and not having Scout and nothing to launch, it’s clear we have to go for Scout for Prism at the least.

Looking at the landscape of launchpads on Terra, it would be wise to start serious work on the lossless payments widget. At least there, there is no competition and a huge untapped opportunity.

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Yer that’s a great point. Worth trying to capture that market before anyone else moves in. Seems the issue is dev bandwidth and the current demand for launches. Hopefully with hiring more devs the team can get someone onto rolling it out.

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With so much hype about Crypto in general and Terra building up, not sure why it is so hard to get devs. Do was ready to help as he mentioned in the Pylon Twitter space held recently.

We should move fast, that’s what Terra is known for too.

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Yer great point. I agree that community governance around Pylon Scout is important, and I really hope our community can shape it into something amazing (for projects and MINE stakers).

I get completely where you are coming from. I purchased and stake a significant amount of MINE expecting some level of special access via Pylon Swaps for most launching projects. That said, in Prism’s case I don’t think the comparison if fair (36x or revenue), as the reality is more like revenue and airdrops or nothing at all. But overall, I agree that MINE’s ability to capture value through utility is best done through special access to IDOs for projects launching on Pylon, whereby revenue and airdrops are just a nice bonus.

With this in mind, it seems Pylon faces a hurdle in providing special access to MINE stakers that they didn’t expect nor communicate well to the community. They have found a lot of projects are expecting/demanding launch terms not involving special access for MINE stakers, with projects saying meet our demands or we will go elsewhere or launch our IDO on our own (i.e. look at Astroport, Mars, nearly Prism, etc.). Ultimately we are stuck between a rock and a hard place, and we need to find a solution to unlock MINE’s ability to provide special access to 36x launches. I feel MINE stakers will need to provide something special for these projects that they can’t get elsewhere.

If you’re interested, this was the solution I came up with to help get MINE stakers special access to funding IDOs. Marrying MINE staker's and launching project's needs

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The problem with the Nexus IDO was that the KYC effectively knocked out a number of potential entrants to that swap. If a number of future launches follow a strict KYC model to encourage mine staking, capital in those countries will likely lose interest in $mine. IIRC the full swap allocation for Nexus wasn’t utilized, so there was some missed opportunity there.

I think a thing to remember is that protocols want long term supporters and not folks looking for a quick 36x. So what types of activities as a mine staker could we show to demonstrate that we’re vested in the long term success of protocols that launch with us? I want some double digit gains too, but I think there needs to be a bit of give and take here to setup a mutually beneficial arrangement.

No option is perfect (though I really like the pools!), so giving more options (especially if it’s code from protocols themselves) to launch seems like a net benefit. Again, I’ll reiterate, that if a protocol chooses to go the Scout method, they should set expectation accordingly and educate users. You bring up a concrete example of why they should.

Beside, having Prism integrations w/ pylon seems like it’ll enable a lot of things like yLuna, (maybe yaUST), as deposits into pylon pools. This’ll further enhance the core feature of pylon (Yield Redirection). Blanket scrapping Scout will reduce future Pylon utility as it’ll mean Prism will likely just go elsewhere. (as @Woody has stated)

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While I fully understand the need to be flexible as the launching protocols have options, that argument falls apart when they choose to launch on StarTerra instead which has much higher barriers (mandatory KYC + $15k minimum for guaranteed allocation). Kujira is a perfect example, why was that lost to StarTerra?

I also think the Astroport, Mars, Prism examples aren’t valid:

  • Astroport is effectively initiating a Vampire Attack on TerraSwap. This makes FAR more sense given the that they’re an AMM than doing a traditional IDO.

  • Mars is doing a lockdrop because a large UST base controlled by users is critical to their platform and locking that in is worth much more to them than a typical IDO launch.

  • Prism: My understanding is they created the code for Pylon Scout. Meaning Prism was easily capable of launching without a platform but chose to work with Pylon due to strategic synergy. This is much more an edge case and not the norm. On this it’s totally reasonable to compromise but it should be communicated to users that this is a one-off and not the norm.

I like your idea’s take on the launching protocol effectively “receiving” an active community which I think could be done in ways you mention where MINE stakers are given tokens in the launching protocol but subject to restrictions that heavily encourage them to participate in the new community. I’m less convinced on the council/governance idea – too often the attempt to decentralize simply leads to a lack of leadership (see Mirror’s issues getting new mAssets added)

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As a community of seed investors, we do not have to use every tool from every project that comes along. We can say “sorry, thats not a fit for us”. :slight_smile:

We are the seed investors, we own and operate the IDO platform, we set the rules on how the IDOs are launched in our community!

If the core community of all of the top Flipside crypto chads are participating in $MINE, this is exactly the community that a new protocol like $Prism needs and wants to have in their IDO.

We should not underestimate our collective value-add to new protocols, and in the future, we should maybe hire a contractor to help us map, highlight, and present the profiles, skillsets, experience, and value-add of the army of 10,000 of chads who are part of Pylon!

We can offer fair terms to protocol founders, but we don’t need to cater to protocol founders that want to run auctions and screw all of us over, imho.

Protocol founders who desire to extract all of the value from the community are not community-spirited, and we need to remind them of the important role of the community as their core constituent that gives them legitimacy and social license to operate.

Clearly there is a balance here, but having been in the starved project founder role before and also having invested in many early stage companies and protocols, I know that projects need to reward all of the constituents in a fair way or else things get out of balance and there is animosity.

Definitely the core community – all of the Chads with Twitter accounts – are an incredibly important constituent in the mix – arguably the most important for cryptocurrency protocols – and protocol founders need our 10,000 man army of Twitter accounts to be aligned with them and not pissed off at them!

Also, for a lot of the chads, locking up for 6 months or 1 year just like the VCs do is perfectly agreeable. So our capital can be just as competitive.

Why would a protocol founder ever want to sell early-stage tokens to lazy VCs sitting in SF or NYC, if they could instead raise the same amount capital on the same terms with the same lock-up from the core community of chads on Pylon? :slight_smile:

We should aspire to make Pylon not only the most attractive IDO platform within Terra ecosystem, but, also the most attractive source of capital for any protocol founder, period!

Wagmi

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I think you raise a very good point here and have effectively identified one of the MINE community’s USPs - social media clout. A protocol could easily raise as much capital through Pylon as they could from VCs and just one of the things we can offer in return, assuming favorable terms, is a primed and engaged community with a huge, genuine social media presence. No VCs can offer that, but we can, and we should use that to our advantage.

What other benefits do VCs offer? Maybe we can provide expertise, mentors and advisors paid for by our community pool?

Launching with Pylon should get your fledgling protocol a VC like package plus a loyal, supportive and vocal user base that money can’t buy.

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The protocols set their IDO prices and a 36x indicates that the token was mispriced at launch. It’s wonderful that Nexus was so generous to the community, but it’s not clear that you can always expect a 36x from every IDO. The 76% return, however, is what is going to end up making Pylon a sustainable business and keep it around for years to come! There’s a balance to be found here.

One model that I think is better is for Pylon to build a treasury and let the DAO vote on what % of the allocation the treasury should buy. That way, $MINE stakers would get upside from every launch, regardless of whether they were able to purchase the token or not. Something to explore…

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Ed, yeah 36x is a bit much, but there’s a 2nd side to this coin, i.e. if a deal isn’t priced fairly relative to it’s team, tokenomics, and stage then none of the $mine community members are going to vote to participate in it! It will just go unfunded, right?

Question: are you thinking that the Treasury investing in IDO tokens could be a replacement for the Pylon Swap and Scout concepts? I do actually believe the approach of having a Treasury might solve the problem of BOTs and Whales, right? :smiley:

  • BOTs can’t really mess with anything w/ a Treasury model.

  • Whales could of course buy-up $mine to aggregate a bigger pro rata share of the Treasury, but that causes $mine token price to go up for everyone else too… so this is a way of harnessing the whales to hoist the bags of everyone in the community higher. :grinning: (in the current design, Whales can come into Scout and make-off with most of the allocation, and it doesn’t help the community one bit!)

Do you have any ideas in mind for how we would reward loyalty as a $Mine staker in conjunction with the Treasury proposal? I mean, we might not need to do any kind of “duration x time” calculus b/c loyalty would be rewarded by appreciation in the $MINE token price, right? The people who buy it the earliest gain the most price appreciation as the Treasury accumulates IDOs and value?

But, what is the value of staking then? I guess you still need to stake to have a right to vote in governance. And you need to stake to enjoy the fees generated from Pylon Pools. Is there any other reason to stake?

FYI, as a different point of reference, I’m in an angel investing club in the Bay Area, and here’s how it works:

  • there is a limit of 100 members (and a wait list to join)
  • we all make a monthly contributions into the club Treasury to maintain our membership (most people just pay a year or two ahead b/c they are too lazy to do it monthly)
  • the Treasury is used to invest in startups
  • a startup pitch involves a 30-40 minute call where the team makes a presentation to the club, and, at the end of the pitch, we discuss terms and allocation
  • then we dismiss the founder’s and we vote to invest or pass
  • once a year, as the club harvests exits, it distributes those profits out to the club members
  • if a club member wants to leave the club, they can sell their membership at its book value to a new member who joins

This likely wouldn’t be the right template to follow for Pylon, but, maybe a Zoom or Twitter Spaces call with the team before we hold a vote via governance could be a part of it? Maybe if the protocol founders see 1,000 Pylon chads on a call excited about their project, they would be excited to make us their largest allocation! :slight_smile:

I wonder how we could make the idea of $mine stakers funding the Treasury work? I guess the protocol emissions method of funding the Treasury does in essence tax every $mine holder via the mechanism of dilution, and, this actually is a lot like paying a monthly membership fee to the Club Treasury as is done in the Silicon Valley Angel Club Model! :slight_smile:

Also, once we get the tokenomics design optimized and the $MINE price starts to appreciate nicely, then the community could vote to lower the % emissions rate as a higher $MINE price would translate into less $MINE being needed to keep the Treasury properly funded!

I mean, if we want to invest $250k - 2m per deal and if we want to do 12 deals as a club per year, then we would need to fund the Treasury with ~ $15m per year in new protocol emissions.

Yep, the more I think about it, the more I like the idea of using emissions to fund the Treasury and then using the Treasury to buy the IDO tokens with a 12, 24, or 36 month lock-up concept. :slight_smile:

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So happy reading this, it is awesome to see someone else with a similar view regarding MINE staker’s value proposition. Our community is extremely valuable and is something projects should be able to tap into. I wrote about it here Marrying MINE staker's and launching project's needs.

I noticed someone else on Twitter also views it quite similar - https://twitter.com/BreadToInspire/status/1456231674316996615?s=20

The idea of a treasury instead of a ‘pylon swap’ style option is also something that could work within this value proposition, I guess it’s just a different way of accessing entry into projects.

Either way, it seems like something we should all collab on to eventually put forward a governance poll.

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100% agree that there is obviously an issue with the argument when you look at Kujira. I had asked for the team to comment but got nothing. It does make it harder to believe the claim that projects aren’t wanting to do swaps. Either way, with decentralised governance it is now time to for us to step up and make Pylon Swaps (or something of similar benefit to MINE stakers) happen. It definitely seems that a large amount of the community wants this.

I think the council will be of great use to help negate the issues you spoke if regarding decentralised governance. They should definitely be able to help organise and coordinate the community.

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