Thread by @beniaminmincu

1/ The RIDE listing has been a painful and instructive lesson.

Very difficult and heartfelt.

But as many times before, we will find a way to solve things, and see the light again.

All focus has been on carefully investigating what happened, and defining important next steps.

2/ The problem as expressed by many in the Elrond community is that the RIDE listing was somehow an unfair game.

Unfair because of some perceived advantages, or disadvantages, that lead to unfavorable outcomes.

3/ In Elrond, we've put a lot of thought into creating better and fairer opportunities that are available equally to all of the community.

This has been the Elrond spirit.

It's why the Elrond community wields unparalleled strength in this space.

4/ In some sense, this listing went against that spirit.

Understanding how exactly, and what can be done to completely prevent such a possibility in the future, is what we've been thinking hard about.

5/ To better make sense of what happened, we need to differentiate between proximate cause, and root cause.

While a proximate cause seems like the actual problem, it's merely a symptom.

The root cause is the underlying cause, that has the power to alter all proximate causes.

6/ The observed proximate causes were:

a - demand for holoride was overwhelming, available supply was quite low. In this case, with demand far exceeding supply, price was expected to see a rapid and abrupt appreciation.

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b - based on the above assumption, everyone designed a simple strategy preparing to buy immediately at listing, hoping to realize huge profits by selling later to other buyers coming in.

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c - understanding that this was the simple strategy everyone was playing by, some other people designed a more refined strategy, to ensure they would, in fact, be able to execute the same strategy faster than most other people.

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d - thus, some people bought at the first moment at great prices, some others bought at the second and third moments at worse prices. Then the first group of people sold, breaking the strategy of the second group of people, leading to a lot of confusion, frustration and pain.

10/ In short, the problem was not that some people bought earlier--buying is fine and actually contributes to growth--rather the problem was that some people were able to execute huge buys, followed by immediate selling, realizing large profits, *at the expense of the community*.

11/ More concretely, the key proximate problems were:

First, that one account was able to buy ~10.79 million RIDE with 5600 EGLD, at a price of ~$0.155/RIDE, and has sold this amount immediately for ~119.000 EGLD (!), at the expense and to the detriment of the larger community.

12/ To be clear, buying and selling is part of the normal market behavior. It happens all the time, at every listing, on every exchange. It's just that when the buying is too sizable, and the selling is done at the expense of the smaller community, we have a huge problem.

13/ Second, an account owned by one of the staking providers, bought ~6.9 million RIDE, with 10k EGLD, at a price of ~$0.43/RIDE, and sold part of those immediately for profits.

It's not buying that is the perceived problem, it's the selling at the expense of the community.

14/ Third, that an Elrond affiliate has bought ~5.29 million RIDE, with 3 transactions of 8k EGLD, 12k EGLD, and 8k EGLD, totalling 28k EGLD, at a price of ~$1.61/RIDE, and has actually not sold any RIDE for profits.

15/ Importantly, no bots have been used in this case, buying was done manually, at a market price above the current one (~$1.61/RIDE), no selling has been done, and no profits have been realized.

16/After carefully analyzing the problems, we have come up with several solutions:

First, the elephant in the room: to ensure a swift solution, the Elrond Foundation has bought all the RIDE tokens from the affiliate & will use them as an incentive for community and RIDE holders.

17/ Second, we have been in discussion with the staking provider, to ensure that the profits made by selling RIDE at the expense of the community are actually returned to the community.

A more general measure will be discussed below, to prevent any such issue occuring again.

18/ Third, we have identified the first & largest buyer, which sold 119k EGLD of RIDE at the expense of the community, realizing huge profits.

After several rounds of discussions, we have reached a conclusion: 40.7k EGLD & 1.1 mil RIDE profits will be returned to the community.

19/ The three solutions are in the process to be implemented.

A detailed proposal will follow explaining how the tokens will be rewarded to the community.

This will be the public address where the EGLD & RIDE will be returned: explorer.elrond.com/accounts/erd1s…

20/ With proximate causes addresed, let's look at the root cause:

The four points mentioned initially, have created the premise for a buying arms race — one which ultimately trumped the smaller community members, and went against the best interest of the project and launch.

21/ The most relevant question thus becomes: how do we ensure that such situations cannot occur at any other initial listings on the Maiar DEX?

Here are the important measures we're immediately taking:

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a - Smarter price discovery mechanisms: requiring people to stake the amounts they want to buy/sell with several days in advance, and granting a clear image of where the price will be at the start.

23/ b - Transaction size caps for the first 12h-24h: ensuring no transactions above a certain amount can be performed at once, and opening the possibility even for smaller buyers to buy.

c - Shadow-ban mechanism for repetitive actions performed by bots the first day of listing.

24/ With these important measures in place, the initial listing opportunity will be equally open and fair to all Elrond community members, making sure that the premise of the game can lead to favorable outcomes for the community.

25/We understand the pain and discomfort the initial listing has caused to many community members & will push hard to solve the immediate problems, create some new incentives for the RIDE holders, and implement new preventive measures to ensure the root problem cannot occur again

26/ The Maiar DEX is still at the beginning, but it has already brought a huge added value and utility to the ecosystem and community. The RIDE ecosystem brings a lot of promise.

I wish we had learned these hard and painful lessons in a different way.

27/ Having learned them, we’ll push hard to do much better.

Implementing solutions, and designing new products & processes with the Elrond spirit in mind.

Because the only way to win is by working together.

It’s what has brought us here, and what will bring us a lot further.