Thread by @kaiynne

Breaking the meta is challenging, but there is nothing that excites a degen more than a new mechanism to try to game. This is why yield farming was so effective in creating DeFi summer. Pool 1, pool 2, pool 8?... shut up and take my money.

This is why the points meta created so much excitement, and for the projects that got in early it was extremely effective at driving awareness and attention. Unfortunately as we have recently realised it was not sustainable.

Points were a hybrid of airdrops and yield farming. The problem is that points, unlike tokens, could be infinitely inflated, this allowed projects to farm the farmers. It's not much, but it's honest work.

When I decided to launch Infinex one of my main goals was to try to avoid the broken meta in token distribution. I spent a lot of time thinking about how to do this. There were many options I considered, including avoiding a token by bootstrapping and retaining ownership.

While this was appealing for reasons, there are issues with this approach. Take CZ and Binance, while retaining the majority of equity worked very well for him, if it were not for BNB I don't think Binance would have been as successful.

Obviously Binance was a brilliant product launched at the perfect time, it is incredibly hard to compete with that. But BNB created a dynamic where a lot of people were willing to look past some of the early issues with Binance because of alignment via BNB.

See also the Link Marines.

If I decided to bootstrapped the project and retained 100% ownership and control there was going to be no chance to take on Kucoin, let alone Binance. In crypto a token is table stakes, without one you are at a severe disadvantage. See Opensea...

Ok, so you need a token, how to distribute it? My view is as widely as possible. Now I don't know if any of you are history buffs, but we actually had a great mechanism for this called token sales. But then a few overzealous regulators came in and killed the entire market.

While this protected many people from scams, it protected an ever larger group of people from life changing returns. Look at every project since 2018, starting with Uniswap. If UNI had been sold to the average degen rather than a16z, we would have many more rich degens.

And probably a fee switch... but I digress.

If token sales had continued and the market been allowed to self-correct we would all be better off today.

It’s absurd we are still having the “are all tokens securities” debate ten years later. Governance tokens give holders the ability to participate in how a project is developed over time. They do not confer rights or claims to an enterprise, as in traditional investment contracts.

That said, if regulators had provided clear guidelines on how to do a token sale that would also have been fine. While I do not believe regulators should be able to determine how innovation happens, at least they would have been acting in good faith.

We did not get good faith though. What we got was an adversary attempting to shut down crypto. This is not good faith, and it is insane we allowed this to happen for so long. But we are finally fighting back, and now is the time to fix these issues.

What does that mean for Infinex? I want the entire community to understand the vision, and I want the entire community to have alignment. What we are building is going to be one of the most powerful distribution platforms in crypto.

It is critical to the success of this mission that Infinex has broad support across the ecosystem to ensure it is credibly neutral.

Back to our options, given I can self-fund the project we could just airdrop 100% of the tokens and hope alignment magically emerges, unfortunately this approach is just batshit fucking crazy.

I really cannot express how fucking stupid airdrops are as a way of distributing a token, they were idiotic years ago and they have only gotten worse as mercenary capital has monopolised these campaigns. Their efficiency is almost zero now.

And if we needed empirical evidence of this we just got it with the Friendtech distribution. The reality is no one is ever going to value a free token as much as one they purchase. Because a purchase requires risk and agency, the alignment is far greater.

We have a concept called money. This is going to sound wild, but the solution to this issue is money. People who want alignment buy tokens, those that don't, don't.

Even more interesting is that it then doesn't even matter what we do with the money, we could, and maybe even should, just lock it in a vault and throw away the key. This is about optimising alignment.

And again I want to be extremely clear, I do not believe anyone should be able to dictate what you do with your money. The idea that an archaic accreditation regime is going to protect people is ludicrous, it is paternalistic and redacted to think this will work for crypto.

Look at where this "protection" got us in traditional venture. The cost of going public has risen so high in the last decade that promising businesses delay listing longer and longer. This harms retail investors as the majority of gains are captured by venture LPs.

Why are the costs so high now though, you ask? Well it turns out if you continually add disclosure requirements and oversight, compliance gets exponentially more expensive. Luckily in the US this trend is being reversed by the courts but Europe is still a dumpster fire.

Ok, airdrops are idiotic for distribution, and without a token we are destined to end up in the equity project graveyard. We also need to distribute governance power as widely as possible. This leaves us with the option of selling tokens.

But the status quo is broken. Because we are selling tokens to the wrong people. More accurately we are selling tokens to only a subset of people. Everyone loves KOLs, but there are many people with valuable contributions to make to a project who do not have 100k followers.

So the solution becomes obvious, sell tokens to everyone. BUT then you are faced with the straight to jail problem. God forbid people were allowed to make their own financial decisions.

I just want to reiterate, the essential value of crypto is to enable groups of people anywhere in the world to coordinate via transparent and open rules. No regulatory oversight required. Token sales were one of the purest expressions of this.

So wat do? The solution that arose out of much debate and discussion was to create a non-fungible governance token to coordinate governance, and to sell it to people who qualified based on their early participation in the project.

Thus the Craterun campaign, where you farm access to the Patron Sale. To be extremely clear, this is not an open sale where anyone can buy Patrons, you must qualify by demonstrating a level of sophistication and understanding of the platform.

What Craterun does not do is try to determine whether you are rich enough to make informed financial decisions. But it does stop a completely uninformed person from stumbling in and accidentally accessing the sale. Will this satisfy an overzealous regulator?

Honestly probably not, but the reality is we are not dealing with good faith actors any more, that ship sailed a while ago. So it really doesn't matter what mechanism we put in place, regulators are likely going to object.

We are therefore faced with a decision to continue to follow the existing broken meta, or do the right thing and break the current meta. Imo as someone who has had some success in the space I have an obligation to do the optimal thing no matter what.

This is why we are doing the Craterun campaign. If the idea of onchain distribution is exciting to you, we want you involved. Infinex is built for the next billion users, but in order for that to work we need to convince the current early adopters this is the path forward.

To get access to the Patron Sale you need to create an infinex account and start farming crates, which have three components Patrons NFTs, Patron Passes, and Patron tickets. See here: app.infinex.xyz/craterun

We spent a lot of time and effort deploying decentralised governance in the early stages of the project to ensure governance power was distributed across a robust and credibly neutral framework.

The fact that the project is already so decentralised gives me some confidence that we can pull this off. But regardless of any objections to this plan that might arise, token sales are still the optimal strategy for ensuring broad community alignment. So that's what we're doing.