The Sneed Team is thrilled with the lively response to our proposal!
We are grateful and humbled by so many from the community showing their strong support! We want to emphasise that Sneed is an effort by the community, for the community. The proof is in the eating of the pudding, so seeing this strong engagement is profoundly encouraging.
We also see several community members voicing concerns that should be addressed.
The questions are mainly in two categories: specifics around our proposal, and concerns about the merits of the project in general. We will try to address both in this thread, but if it becomes unwieldy one option might be to break out the general questions into a thread of its own and use this one for the more specific questions (forum moderator advice welcome).
Starting with some more specific questions, let’s begin by clarifying the developer share.
When Sneed was launched, the developers were allocated 1,000 SNEED, 10% of the supply. This is also the allocation they will end up with in this proposal. The proposed process is:
- At SNS launch the Devs are allocated 900 SNEED.
- Accordingly, 900 of the 1,000 old SNEED tokens owned by the Devs are burned (this is how they are converted into the new SNS SNEED).
- The Sneed Team creates a proposal to the SNS to create a 1:1 conversion pool from SNEED (old) to SNEED (new, SNS), and to send an amount of SNEED (new) to it that matches the amount of SNEED (old) in the market.
- The Dev Team can then convert their remaining 100 SNEED (old) to SNEED (new) via the conversion pool together with all other holders of SNEED (old).
The rationale behind it is as follows: by allocating 900 rather than 1,000 SNEED from the SNS launch to devs, they should have enough votes to go ahead with the steps they have advertised they will take next, which is the creation of the conversion pool and sending SNEED from the SNS treasury to it, but they should not be unstoppable.
It is unlikely that a saboteur would manage to acquire all 1,000 of the SNEED from the SNS sale, and thus be able to prevent the creation of the conversion pool (and be able to steal the treasury). However, if the Sneed Team tries to create a nefarious proposal during this period when they have an outsized vote, the community does still have the option of coming together to win the vote to stop them. By creating the conversion pool, the 1,000 SNEED from the SNS sale will quickly join the majority of SNEED that is already in the market, so that the Devs will no longer have anything like a controlling vote in the project.
The goal is the following end state: Devs have 1,000 SNEED, where 900 are locked up in neurons from the SNS launch, and 100 are liquid and available via conversion, which together represents 10% of total supply.
Currently, the Sneed Team controls the following wallets:
Treasury wallet:
https://sneed.one/?acct=auzum-qe7jl-z2f6l-rwp3r-wkr4f-3rcz3-l7ejm-ltcku-c45fw-w7pi4-hqe
This wallet currently contains 3,019 SNEED. 2,000 SNEED of those are reserved for the SNS Treasury. 1,000 SNEED of those are reserved for the SNS Sale. The method for converting these SNEED (old) into SNEED (new, SNS) is to simply burn them after the SNEED (new, SNS) have been minted.
The 19 remaining SNEED are what is left of the almost 1,000 SNEED that were reserved for airdrops, which have been distributed as follows:
https://icsneed.com/?airdrops=sneed
Dev wallets:
https://sneed.one/?acct=l2wou-xtapz-wfatn-ptq6w-v6yek-qshs5-qsy5a-tuixw-xbhq6-cimdp-xae
https://sneed.one/?acct=akbcy-jszkp-z6zfd-4md7k-xmdgr-p5stn-enzhm-47hpo-sxhps-aoyxt-bae
The dev wallets control the 1,000 SNEED that devs were awarded during the Sneed launch.
Together with the treasury wallet this makes 4,019 SNEED in total, or 40% of supply.
Then, the Sneed Team also controls the Sneed Team position in the ICPSwap Liquidity Pool (LP). Currently there are 670 SNEED in this position, and 14,844 ICP (so the estimates of approximately 1,000 SNEED and 20,000 ICP in the proposal above are in fact too large and will be corrected when the proposal is submitted).
Together that makes about 4,689 SNEED controlled by the Sneed Team, or 47% of total supply. The rest are in the market, distributed via airdrops (almost 1,000 SNEED) and bought by users via the LP.
One important purpose of the SNS DAO formation is to change this so that only the 10% of SNEED allocated to the dev team is controlled by the Sneed Team. The Treasury and any liquidity positions should belong to and be controlled by the community, via the DAO. The SNEED reserved for the SNS sale should be distributed.
Regarding for how long the developer neurons with 900 SNEED should be locked, we are interested in community input! Our thinking is that we want to find a balance between demonstrating commitment, but also not remaining an outsized voice of influence. That means we don’t want to lock for too short, but also not for too long. We have tentatively thought a locking period of around 1 year, or maybe a combination of locking some for 6 months and some for 1 year, might strike the right balance, but we would be very interested in hearing the community’s opinions.
Next, we want to clarify that the purpose of the 1:1 conversion pool is to let all holders of SNEED (old) be able to convert their holdings to SNEED (new). The idea is to send a matching number of SNEED (new, SNS) to this pool as there are SNEED (old) circulating in the market, leaving the rest (minus the 900 SNEED to devs) in the Sneed SNS Treasury. This should end up with about 2,000 SNEED in the Treasury, plus about 670 SNEED or so from the LP. It would be our recommendation, but it will be up to the DAO to decide, to use the 670 SNEED together with the about 14,844 ICP from the old LP to create a new LP to provide liquidity and to allow the RLL to continue to operate as before.
The SNEED distribution from all this would be: 10% to devs, 20% SNS Treasury, some 5-6% in an LP controlled by the SNS, and the rest is in the market.
As to the current operations of the RLL, they are not automated. The Sneed Team currently manually collects LP rewards, where the SNEED rewards are burned, the ICP rewards are staked into the 8y neuron, and maturity from the 8y neuron is collected and used to buy back and burn SNEED from the LP. The extent to which the DAO decides to automate these operations should reflect what parts of RLL mechanics it is interested in continuing with.
Now to the more general concerns, “why Sneed?”.
Let’s start by acknowledging that there exists a concept called “meme coins” that have mostly bad connotations. At worst, they are scams, at best they are meaningless vehicles for speculation based entirely on greater fool theory, void of any actual value much like a derivative without an underlying, that might in its most charitable form be described as a “casino”.
Sneed is not a “meme coin” in this regard. Sneed is a utility coin, the theory of which will be expanded on below, meant to be useful for the community by finding a balance between utility for small payments and store of value, and by letting the community itself manage this balance. It is meant to be a coin with tokenomics designed to allow users to keep their tokens liquid, without losing out to minting dilution.
Sneed does build part of its branding on the “Sneed” meme, in particular the specialized use of this meme inside the SNS-1 community, where “Sneeds” used to be a nickname for the token before the decision to rename it to DKP. The “meme” here is the “blank canvas” meme of the SNS-1 project, and an acknowledgement of the culture in the SNS-1 community. The word “meme” in its original definition (see R. Dawkins, The Selfish Gene, 1976) refers to a unit of cultural evolution, and this is how we should think of it here – Sneed continues the “blank canvas meme/concept” of SNS-1.
That said, the disclaimer on the website states that Sneed is just a “memecoin”. This is because until the formation of a DAO that brings its treasury and tokenomics under decentralized governance, it doesn’t hope to be more. Only with the elimination of trust in the Sneed Team currently required by users can the token find its full utility, which is what we hope to achieve with this SNS proposal.
So, one answer to the question “why Sneed” is that since the conversion of SNS-1 into DKP, there is currently a community without a club house, a DAO without a DAO – there is a need for a blank canvas DAO to take over from SNS-1, and Sneed intends to be that blank canvas DAO.
It is not enough to say “SNS itself is the blank canvas”, because that would be to deny the sprawling vitality of the SNS-1 community which under the blank canvas banner spawned projects such as ICPCoins, became something of a launchpad for budding writers, for Sneed itself, and recently an innovative experiment called SpellKaster. SNS-1 was a fantastic and incredibly inspiring experiment for the community that got involved in it, and as SNS-1 turns into DKP we would like the experiment to continue, and to invite an even greater part of the ICP community to join in on the fun!
Another answer to “Why Sneed” is that it is designed to fill a niche that is not yet filled, which is that of a deflationary payment coin, practical on the scale of use cases relevant to communities, such as tipping.
Bitcoin and Ethereum both have gas fees that make small payments such as tipping infeasible. Networks dedicated to the payments use case, conversely, never manage to find sustainable tokenomics. ICP provides a true revolution here. By creating a platform for serving full dApps, ICP can support a payment token essentially in its stride. The IC platform combines security, scaling, robustness and decentralization with cheap gas fees - and a reverse gas model! This is ideal for creating a useful payment token that inherits all these properties from the IC.
But why not just use ICP for payments, payments with ICP also obviously have all those properties? Because ICP is fine tuned to a different use case, which is to pay for cycles in the IC and to govern it. Governance is so central to its purpose that big inflationary rewards are minted for it. This means that ICP is not really designed to be kept liquid, it makes more sense to stake.
For this reason, there is a meaningful niche to be occupied by a token with tokenomics designed to make it useful for payments (cheap transaction fees, non-inflationary governance incentives) while inheriting the properties of the IC.
We have designed the Sneed tokenomics to be heavily optimized for a useful community payment token, that is deflationary so users can keep their tokens liquid and ready for use in payments, not having to worry that their value is being diluted unless they stake their tokens.
The RLL described in the proposal is designed to allow all Sneed holders to benefit from burns and buybacks, and to benefit governance with rewards from the RLL income streams to avoid having to mint any rewards. All of this is inspired and refined from the original SNS-1 tokenomics, which demonstrated the power of deflationary supply but never solved rewarding governance.
So, the second answer to “Why Sneed” is that the IC needs a community governed payment token for community scale use cases (such as tipping), the value of which is not tied to the particular fortunes of any specific distributed application targeting a specific business domain, and where the tokenomics are designed to support keeping funds liquid.
In the short time since its inception, Sneed has already enjoyed a fantastic reception from the community.
An example of this is that it was the first token to be added to OpenChat’s tipping feature via SNS proposal. This feature has already been very popular and has increased the Sneed user base to a point where in just over a month since the October 20 launch, Sneed already counts over 24,000 transactions by over 1,600 accounts, with over 250 accounts holding at least 1 Sneed, 478 accounts holding at least 0.1 Sneed, and the biggest account after the treasury and dev wallets (and the ICPSwap trading pool) holds 310 Sneed.
https://sneed.one/?top=all
We launched the Sneed token directly as an icrc1 token via LP instead of going straight for an SNS for several reasons. One was drawing on the lessons from SNS-1 where the SNS sale was marred by “botting”, i.e. bots buying up a significant part of the sale. By allowing the token to be traded in the market first, the incentive for botting is reduced and the SNS sale price can be informed by existing price discovery.
Another important reason was to demonstrate the power of the RLL scheme in practice before the DAO.
To date, in just over a month since launch, the Sneed RLL has used LP rewards to:
- Burn over 29 Sneed (0.29% of supply)
- Stake over 600 ICP in an 8y neuron
- Buy back and burn 5 ICP worth of SNEED from the LP using yield from 8y neuron.
It will be up to the DAO to steward the Sneed tokenomics, but by demonstrating the RLL in practice we have given DAO members a good idea of how the concept works.
The Sneed Team considers the token launch a convincing success, that clearly shows the interest in Sneed’s innovative concept. It should be noted that the ambition to continue the spirit of SNS-1 and the mechanics of the RLL have been communicated consistently, and so the great community engagement shown should be an indication of the community’s interest in the concepts Sneed proposes.
In closing, we would invite you all to consider that the IC’s revolutionary properties do make creating tokens with attractive tokenomics and realistic online payment use cases feasible in a new way.
An ERC20 “meme token” could never be useful for community scale payments, due to Ethereum’s gas fees, so it would be almost by definition without a real use case. Thus, on the Ethereum platform, it makes sense to be very skeptical of “meme coins”.
But the IC community might be wise to not unthinkingly apply that lesson to the IC. The reality is that IC revolutionary properties allow for the creation of many types of useful tokens with slightly different tokenomics, targeting slightly different use cases – all of them potentially useful - and it’s just a fact of the crypto world that many of these will use memes as part of their branding.
If we are too quick to disqualify all such efforts, we are in fact quick to dismiss one of the most fundamental value propositions of the IC. This, of course, does not mean that the IC will be immune to pure meme tokens that are truly devoid of real value, but just dismissing anything with a meme out of hand may be a mistake.
The Sneed Team believes strongly that Sneed has the potential to grow organically into something valuable for the IC community as a payment token with store of value properties and decentralized governance - a combination that can only be realized on the IC.
We want to thank the IC community for the great enthusiasm and engagement shown in the project, which is by the community, for the community.
