Changes in the distribution of reward funds among communities
One of the key challenges we see in the long-term development of many communities on MAIN is the centralization trap.
When creating any community on MAIN, its creator always receives a large number of very cheap board coins. For instance, the first 20 board coins cost only 2,000 $MAIN, the first 40 coins - 8,000 $MAIN, and you can buy the first 80 coins for 32,000 $MAIN. However, if you want to buy the next 80 coins in the board, you'll have to pay not 32,000, but 128,000 $MAIN (three times more).
On one hand, this coin mint curve allows community creators to maintain control over their communities and benefit from their growth. But on the other hand, it limits the growth of these communities as it makes them unsafe for subsequent holders.
In our example above, if the community creator suddenly decides to sell all their 80 coins after the second holder buys the next 80 coins, he will get back 128,000 $MAIN, while the second holder will be left with coins now worth only 32,000 $MAIN (incurring a loss of 96,000 $MAIN).
The problem worsens if the community creator buys coins not for 30,000 tokens but for 300,000-500,000 or more, to increase the community's reward fund and attract more attention from the start. In this case, almost any subsequent purchase of board coins becomes a highly risky investment because when the community creator sells their coins, other holders lose almost the full value of their coins.
As a result, such boards mostly follow two development paths:
1. They either turn into a sort of staking where the creator deposits their tokens in the board and daily takes almost the entire reward fund, regardless of the content quality and frequency of posting.
2. Or boards are flooded with numerous small buyers, trying to get a share of rewards and not really being interested in the community itself or capable of influencing its development.
Additionally, a large part of the MAIN reward fund goes to incentivize these centralized communities, negatively affecting the development of other communities that receive less attention and rewards.
We see two main ways to make communities safer for all holders and, consequently, give them better chances of development:
1. Burn a portion of the first cheapest board coins. This will make the community creator's exit less painful for other holders. Although potential coin burning can increase token purchases and help the community creator earn more from commissions and coin value growth, they don't receive direct benefits from burning their coins, so there hasn't been much motivation to do it.
2. Buy fewer coins at the start so that other users can also join the board with lower risks. However, this approach complicates the community's launch. If the board creator doesn't have a reputation on MAIN yet, it will be challenging to attract new holders to the board, and a lower community capitalization will result in fewer rewards, making it harder to attract participants.
To help communities break free from this centralization trap and encourage the development of decentralized (even if not the most expensive) and safer communities on the platform, we've decided to change our reward fund distribution system among communities.
Starting today, rewards for a specific board will depend not only on its capitalization (although it will still play a decisive role) but also on the degree of its decentralization. This means that communities with a more balanced and decentralized structure of holders will have an advantage in receiving rewards over centralized communities.
Now, when creating a community, you won't necessarily have to spend a lot of tokens to increase its capitalization and, consequently, rewards. Instead, you can, for example, spend fewer tokens but burn a portion of the purchased coins, achieving the same or even greater rewards. Moreover, a more attractive and safer ownership structure can help you attract other major coin holders to your community, further increasing its capitalization and decentralization, and even more rewards for the community. We hope this will create a cycle of continuous community development that depends on a large number of interested participants.
In this update, we've also disabled monetization for communities with less than 10,000 $MAIN locked. These funds will now be redistributed to other boards.
We understand that these changes may seem a bit complex to grasp at first and may raise many questions. Over the next month, we'll try to answer most of them and provide more detailed instructions for both community creators and users.
What can you do right now?
1. Check out the communities that interest you and see how their reward funds have changed. You can also compare boards with approximately the same capitalization but different holder structures and see how their reward funds differ.
2. If you're a major coin holder in a community, you can try burning a certain amount of your coins (just send them to the official burn address 0x000000000000000000000000000000000000dEaD, like any other tokens) and see how your board rewards change. You can also try attracting other holders to your safer and more decentralized community, which can also increase its rewards.
3. If you're a user deciding which communities to join, now we advise you to consider not only the board's capitalization but also its holder structure and monthly rewards (preferably per participant). By choosing more decentralized communities, you'll not only secure your investments but also get more rewards.
Build decentralized communities! It's profitable now 😉
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