More on Entrepreneurship/Creators

Alex Mathers
2 years ago
400 articles later, nobody bothered to read them.
Writing for readers:
14 years of daily writing.
I post practically everything on social media. I authored hundreds of articles, thousands of tweets, and numerous volumes to almost no one.
Tens of thousands of readers regularly praise me.
I despised writing. I'm stuck now.
I've learned what readers like and what doesn't.
Here are some essential guidelines for writing with impact:
Readers won't understand your work if you can't.
Though obvious, this slipped me up. Share your truths.
Stories engage human brains.
Showing the journey of a person from worm to butterfly inspires the human spirit.
Overthinking hinders powerful writing.
The best ideas come from inner understanding in between thoughts.
Avoid writing to find it. Write.
Writing a masterpiece isn't motivating.
Write for five minutes to simplify. Step-by-step, entertaining, easy steps.
Good writing requires a willingness to make mistakes.
So write loads of garbage that you can edit into a good piece.
Courageous writing.
A courageous story will move readers. Personal experience is best.
Go where few dare.
Templates, outlines, and boundaries help.
Limitations enhance writing.
Excellent writing is straightforward and readable, removing all the unnecessary fat.
Use five words instead of nine.
Use ordinary words instead of uncommon ones.
Readers desire relatability.
Too much perfection will turn it off.
Write to solve an issue if you can't think of anything to write.
Instead, read to inspire. Best authors read.
Every tweet, thread, and novel must have a central idea.
What's its point?
This can make writing confusing.
️ Don't direct your reader.
Readers quit reading. Demonstrate, describe, and relate.
Even if no one responds, have fun. If you hate writing it, the reader will too.

Sanjay Priyadarshi
3 years ago
Meet a Programmer Who Turned Down Microsoft's $10,000,000,000 Acquisition Offer
Failures inspire young developers
Jason citron created many products.
These products flopped.
Microsoft offered $10 billion for one of these products.
He rejected the offer since he was so confident in his success.
Let’s find out how he built a product that is currently valued at $15 billion.
Early in his youth, Jason began learning to code.
Jason's father taught him programming and IT.
His father wanted to help him earn money when he needed it.
Jason created video games and websites in high school.
Jason realized early on that his IT and programming skills could make him money.
Jason's parents misjudged his aptitude for programming.
Jason frequented online programming communities.
He looked for web developers. He created websites for those people.
His parents suspected Jason sold drugs online. When he said he used programming to make money, they were shocked.
They helped him set up a PayPal account.
Florida higher education to study video game creation
Jason never attended an expensive university.
He studied game design in Florida.
“Higher Education is an interesting part of society… When I work with people, the school they went to never comes up… only thing that matters is what can you do…At the end of the day, the beauty of silicon valley is that if you have a great idea and you can bring it to the life, you can convince a total stranger to give you money and join your project… This notion that you have to go to a great school didn’t end up being a thing for me.”
Jason's life was altered by Steve Jobs' keynote address.
After graduating, Jason joined an incubator.
Jason created a video-dating site first.
Bad idea.
Nobody wanted to use it when it was released, so they shut it down.
He made a multiplayer game.
It was released on Bebo. 10,000 people played it.
When Steve Jobs unveiled the Apple app store, he stopped playing.
The introduction of the app store resembled that of a new gaming console.
Jason's life altered after Steve Jobs' 2008 address.
“Whenever a new video game console is launched, that’s the opportunity for a new video game studio to get started, it’s because there aren’t too many games available…When a new PlayStation comes out, since it’s a new system, there’s only a handful of titles available… If you can be a launch title you can get a lot of distribution.”
Apple's app store provided a chance to start a video game company.
They released an app after 5 months of work.
Aurora Feint is the game.
Jason believed 1000 players in a week would be wonderful. A thousand players joined in the first hour.
Over time, Aurora Feints' game didn't gain traction. They don't make enough money to keep playing.
They could only make enough for one month.
Instead of buying video games, buy technology
Jason saw that they established a leaderboard, chat rooms, and multiplayer capabilities and believed other developers would want to use these.
They opted to sell the prior game's technology.
OpenFeint.
Assisting other game developers
They had no money in the bank to create everything needed to make the technology user-friendly.
Jason and Daniel designed a website saying:
“If you’re making a video game and want to have a drop in multiplayer support, you can use our system”
TechCrunch covered their website launch, and they gained a few hundred mailing list subscribers.
They raised seed funding with the mailing list.
Nearly all iPhone game developers started adopting the Open Feint logo.
“It was pretty wild… It was really like a whole social platform for people to play with their friends.”
What kind of a business model was it?
OpenFeint originally planned to make the software free for all games. As the game gained popularity, they demanded payment.
They later concluded it wasn't a good business concept.
It became free eventually.
Acquired for $104 million
Open Feint's users and employees grew tremendously.
GREE bought OpenFeint for $104 million in April 2011.
GREE initially committed to helping Jason and his team build a fantastic company.
Three or four months after the acquisition, Jason recognized they had a different vision.
He quit.
Jason's Original Vision for the iPad
Jason focused on distribution in 2012 to help businesses stand out.
The iPad market and user base were growing tremendously.
Jason said the iPad may replace mobile gadgets.
iPad gamers behaved differently than mobile gamers.
People sat longer and experienced more using an iPad.
“The idea I had was what if we built a gaming business that was more like traditional video games but played on tablets as opposed to some kind of mobile game that I’ve been doing before.”
Unexpected insight after researching the video game industry
Jason learned from studying the gaming industry that long-standing companies had advantages beyond a single release.
Previously, long-standing video game firms had their own distribution system. This distribution strategy could buffer time between successful titles.
Sony, Microsoft, and Valve all have gaming consoles and online stores.
So he built a distribution system.
He created a group chat app for gamers.
He envisioned a team-based multiplayer game with text and voice interaction.
His objective was to develop a communication network, release more games, and start a game distribution business.
Remaking the video game League of Legends
Jason and his crew reimagined a League of Legends game mode for 12-inch glass.
They adapted the game for tablets.
League of Legends was PC-only.
So they rebuilt it.
They overhauled the game and included native mobile experiences to stand out.
Hammer and Chisel was the company's name.
18 people worked on the game.
The game was funded. The game took 2.5 years to make.
Was the game a success?
July 2014 marked the game's release. The team's hopes were dashed.
Critics initially praised the game.
Initial installation was widespread.
The game failed.
As time passed, the team realized iPad gaming wouldn't increase much and mobile would win.
Jason was given a fresh idea by Stan Vishnevskiy.
Stan Vishnevskiy was a corporate engineer.
He told Jason about his plan to design a communication app without a game.
This concept seeded modern strife.
“The insight that he really had was to put a couple of dots together… we’re seeing our customers communicating around our own game with all these different apps and also ourselves when we’re playing on PC… We should solve that problem directly rather than needing to build a new game…we should start making it on PC.”
So began Discord.
Online socializing with pals was the newest trend.
Jason grew up playing video games with his friends.
He never played outside.
Jason had many great moments playing video games with his closest buddy, wife, and brother.
Discord was about providing a location for you and your group to speak and hang out.
Like a private cafe, bedroom, or living room.
Discord was developed for you and your friends on computers and phones.
You can quickly call your buddies during a game to conduct a conference call. Put the call on speaker and talk while playing.
Discord wanted to give every player a unique experience. Because coordinating across apps was a headache.
The entire team started concentrating on Discord.
Jason decided Hammer and Chisel would focus on their chat app.
Jason didn't want to make a video game.
How Discord attracted the appropriate attention
During the first five months, the entire team worked on the game and got feedback from friends.
This ensures product improvement. As a result, some teammates' buddies started utilizing Discord.
The team knew it would become something, but the result was buggy. App occasionally crashed.
Jason persuaded a gamer friend to write on Reddit about the software.
New people would find Discord. Why not?
Reddit users discovered Discord and 50 started using it frequently.
Discord was launched.
Rejecting the $10 billion acquisition proposal
Discord has increased in recent years.
It sends billions of messages.
Discord's users aren't tracked. They're privacy-focused.
Purchase offer
Covid boosted Discord's user base.
Weekly, billions of messages were transmitted.
Microsoft offered $10 billion for Discord in 2021.
Jason sold Open Feint for $104m in 2011.
This time, he believed in the product so much that he rejected Microsoft's offer.
“I was talking to some people in the team about which way we could go… The good thing was that most of the team wanted to continue building.”
Last time, Discord was valued at $15 billion.
Discord raised money on March 12, 2022.
The $15 billion corporation raised $500 million in 2021.

ʟ ᴜ ᴄ ʏ
3 years ago
The Untapped Gold Mine of Inspiration and Startup Ideas
I joined the 1000 Digital Startups Movement (Gerakan 1000 Startup Digital) in 2017 and learned a lot about the startup sector. My previous essay outlined what a startup is and what must be prepared. Here I'll offer raw ideas for better products.
Intro
A good startup solves a problem. These can include environmental, economic, energy, transportation, logistics, maritime, forestry, livestock, education, tourism, legal, arts and culture, communication, and information challenges. Everything I wrote is simply a basic idea (as inspiration) and requires more mapping and validation. Learn how to construct a startup to maximize launch success.
Adrian Gunadi (Investree Co-Founder) taught me that a Founder or Co-Founder must be willing to be CEO (Chief Everything Officer). Everything is independent, including drafting a proposal, managing finances, and scheduling appointments. The best individuals will come to you if you're the best. It's easier than consulting Andy Zain (Kejora Capital Founder).
Description
To help better understanding from your idea, try to answer this following questions:
- Describe your idea/application
Maximum 1000 characters.
- Background
Explain the reasons that prompted you to realize the idea/application.
- Objective
Explain the expected goals of the creation of the idea/application.
- Solution
A solution that tells your idea can be the right solution for the problem at hand.
- Uniqueness
What makes your idea/app unique?
- Market share
Who are the people who need and are looking for your idea?
- Marketing Ways and Business Models
What is the best way to sell your idea and what is the business model?
Not everything here is a startup idea. It's meant to inspire creativity and new perspectives.
Ideas
#Application
1. Medical students can operate on patients or not. Applications that train prospective doctors to distinguish body organs and their placement are useful. In the advanced stage, the app can be built with numerous approaches so future doctors can practice operating on patients based on their ailments. If they made a mistake, they'd start over. Future doctors will be more assured and make fewer mistakes this way.
2. VR (virtual reality) technology lets people see 3D space from afar. Later, similar technology was utilized to digitally sell properties, so buyers could see the inside and room contents. Every gadget has flaws. It's like a gold mine for robbers. VR can let prospective students see a campus's facilities. This facility can also help hotels promote their products.
3. How can retail entrepreneurs maximize sales? Most popular goods' sales data. By using product and brand/type sales figures, entrepreneurs can avoid overstocking. Walmart computerized their procedures to track products from the manufacturer to the store. As Retail Link products sell out, suppliers can immediately step in.
4. Failing to marry is something to be avoided. But if it had to happen, the loss would be like the proverb “rub salt into the wound”. On the I do Now I dont website, Americans who don't marry can resell their jewelry to other brides-to-be. If some want to cancel the wedding and receive their down money and dress back, others want a wedding with particular criteria, such as a quick date and the expected building. Create a DP takeover marketplace for both sides.
#Games
1. Like in the movie, players must exit the maze they enter within 3 minutes or the shape will change, requiring them to change their strategy. The maze's transformation time will shorten after a few stages.
2. Treasure hunts involve following clues to uncover hidden goods. Here, numerous sponsors are combined in one boat, and participants can choose a game based on the prizes. Let's say X-mart is a sponsor and provides riddles or puzzles to uncover the prize in their store. After gathering enough points, the player can trade them for a gift utilizing GPS and AR (augmented reality). Players can collaborate to increase their chances of success.
3. Where's Wally? Where’s Wally displays a thick image with several things and various Wally-like characters. We must find the actual Wally, his companions, and the desired object. Make a game with a map where players must find objects for the next level. The player must find 5 artifacts randomly placed in an Egyptian-style mansion, for example. In the room, there are standard tickets, pass tickets, and gold tickets that can be removed for safekeeping, as well as a wall-mounted carpet that can be stored but not searched and turns out to be a flying rug that can be used to cross/jump to a different place. Regular tickets are spread out since they can buy life or stuff. At a higher level, a black ticket can lower your ordinary ticket. Objects can explode, scattering previously acquired stuff. If a player runs out of time, they can exchange a ticket for more.
#TVprogram
1. At the airport there are various visitors who come with different purposes. Asking tourists to live for 1 or 2 days in the city will be intriguing to witness.
2. Many professions exist. Carpenters, cooks, and lawyers must have known about job desks. Does HRD (Human Resource Development) only recruit new employees? Many don't know how to become a CEO, CMO, COO, CFO, or CTO. Showing young people what a Program Officer in an NGO does can help them choose a career.
#StampsCreations
Philatelists know that only the government can issue stamps. I hope stamps are creative so they have more worth.
1. Thermochromic pigments (leuco dyes) are well-known for their distinctive properties. By putting pigments to black and white batik stamps, for example, the black color will be translucent and display the basic color when touched (at a hot temperature).
2. In 2012, Liechtenstein Post published a laser-art Chinese zodiac stamp. Belgium (Bruges Market Square 2012), Taiwan (Swallow Tail Butterfly 2009), etc. Why not make a stencil of the president or king/queen?
3. Each country needs its unique identity, like Taiwan's silk and bamboo stamps. Create from your country's history. Using traditional paper like washi (Japan), hanji (Korea), and daluang/saeh (Indonesia) can introduce a country's culture.
4. Garbage has long been a problem. Bagasse, banana fronds, or corn husks can be used as stamp material.
5. Austria Post published a stamp containing meteor dust in 2006. 2004 meteorite found in Morocco produced the dust. Gibraltar's Rock of Gilbraltar appeared on stamps in 2002. What's so great about your country? East Java is muddy (Lapindo mud). Lapindo mud stamps will be popular. Red sand at Pink Beach, East Nusa Tenggara, could replace the mud.
#PostcardCreations
1. Map postcards are popular because they make searching easier. Combining laser-cut road map patterns with perforated 200-gram paper glued on 400-gram paper as a writing medium. Vision-impaired people can use laser-cut maps.
2. Regional art can be promoted by tucking traditional textiles into postcards.
3. A thin canvas or plain paper on the card's front allows the giver to be creative.
4. What is local crop residue? Cork lids, maize husks, and rice husks can be recycled into postcard materials.
5. Have you seen a dried-flower bookmark? Cover the postcard with mica and add dried flowers. If you're worried about losing the flowers, you can glue them or make a postcard envelope.
6. Wood may be ubiquitous; try a 0.2-mm copper plate engraved with an image and connected to a postcard as a writing medium.
7. Utilized paper pulp can be used to hold eggs, smartphones, and food. Form a smooth paper pulp on the plate with the desired image, the Golden Gate bridge, and paste it on your card.
8. Postcards can promote perfume. When customers rub their hands on the card with the perfume image, they'll smell the aroma.
#Tour #Travel
Tourism activities can be tailored to tourists' interests or needs. Each tourist benefits from tourism's distinct aim.
Let's define tourism's objective and purpose.
Holiday Tour is a tour that its participants plan and do in order to relax, have fun, and amuse themselves.
A familiarization tour is a journey designed to help travelers learn more about (survey) locales connected to their line of work.
An educational tour is one that aims to give visitors knowledge of the field of work they are visiting or an overview of it.
A scientific field is investigated and knowledge gained as the major goal of a scientific tour.
A pilgrimage tour is one designed to engage in acts of worship.
A special mission tour is one that has a specific goal, such a commerce mission or an artistic endeavor.
A hunting tour is a destination for tourists that plans organized animal hunting that is only allowed by local authorities for entertainment purposes.
Every part of life has tourism potential. Activities include:
1. Those who desire to volunteer can benefit from the humanitarian theme and collaboration with NGOs. This activity's profit isn't huge but consider the environmental impact.
2. Want to escape the city? Meditation travel can help. Beautiful spots around the globe can help people forget their concerns. A certified yoga/meditation teacher can help travelers release bad energy.
3. Any prison visitors? Some prisons, like those for minors under 17, are open to visitors. This type of tourism helps mental convicts reach a brighter future.
4. Who has taken a factory tour/study tour? Outside-of-school study tour (for ordinary people who have finished their studies). Not everyone in school could tour industries, workplaces, or embassies to learn and be inspired. Shoyeido (an incense maker) and Royce (a chocolate maker) offer factory tours in Japan.
5. Develop educational tourism like astronomy and archaeology. Until now, only a few astronomy enthusiasts have promoted astronomy tourism. In Indonesia, archaeology activities focus on site preservation, and to participate, office staff must undertake a series of training (not everyone can take a sabbatical from their routine). Archaeological tourist activities are limited, whether held by history and culture enthusiasts or in regional tours.
6. Have you ever longed to observe a film being made or your favorite musician rehearsing? Such tours can motivate young people to pursue entertainment careers.
7. Pamper your pets to reduce stress. Many pet owners don't have time for walks or treats. These premium services target the wealthy.
8. A quirky idea to provide tours for imaginary couples or things. Some people marry inanimate objects or animals and seek to make their lover happy; others cherish their ashes after death.
#MISCideas
1. Fashion is a lifestyle, thus people often seek fresh materials. Chicken claws, geckos, snake skin casings, mice, bats, and fish skins are also used. Needs some improvement, definitely.
2. As fuel supplies become scarcer, people hunt for other energy sources. Sound is an underutilized renewable energy. The Batechsant technology converts environmental noise into electrical energy, according to study (Battery Technology Of Sound Power Plant). South Korean researchers use Sound-Driven Piezoelectric Nanowire based on Nanogenerators to recharge cell phone batteries. The Batechsant system uses existing noise levels to provide electricity for street lamp lights, aviation, and ships. Using waterfall sound can also energize hard-to-reach locations.
3. A New York Times reporter said IQ doesn't ensure success. Our school system prioritizes IQ above EQ (Emotional Quotient). EQ is a sort of human intelligence that allows a person to perceive and analyze the dynamics of his emotions when interacting with others (and with himself). EQ is suspected of being a bigger source of success than IQ. EQ training can gain greater attention to help people succeed. Prioritize role models from school stakeholders, teachers, and parents to improve children' EQ.
4. Teaching focuses more on theory than practice, so students are less eager to explore and easily forget if they don't pay attention. Has an engineer ever made bricks from arid red soil? Morocco's non-college-educated builders can create weatherproof bricks from red soil without equipment. Can mechanical engineering grads create a water pump to solve water shortages in remote areas? Art graduates can innovate beyond only painting. Artists may create kinetic sculpture by experimenting so much. Young people should understand these sciences so they can be more creative with their potential. These might be extracurricular activities in high school and university.
5. People have been trying to recycle agricultural waste for a long time. Mycelium helps replace light, easily crushed tiles and bricks (a collection of hyphae like in the manufacture of tempe). Waste must contain lignocellulose. In this vein, anti-mainstream painting canvases can be made. The goal is to create the canvas uneven like an amoeba outline, not square or spherical. The resulting canvas is lightweight and needs no frame. Then what? Open source your idea like Precious Plastic to establish a community. By propagating this notion, many knowledgeable people will help improve your product's quality and impact.
6. As technology and humans adapt, fraud increases. Making phony doctor's letters to fool superiors, fake credentials to get hired, fraudulent land certificates to make money, and fake news (hoax). The existence of a Wikimedia can aid the community by comparing bogus and original information.
7. Do you often hit a problem-solving impasse? Since the Doraemon bag hasn't been made, construct an Idea Bank. Everyone can contribute to solving problems here. How do you recruit volunteers? Obviously, a reward is needed. Contributors can become moderators or gain complimentary tickets to TIA (Tech in Asia) conferences. Idea Bank-related concepts: the rise of startups without a solid foundation generates an age as old as corn that does not continue. Those with startup ideas should describe them here so they can be validated by other users. Other users can contribute input if a comparable notion is produced to improve the product or integrate it. Similar-minded users can become Co-Founders.
8. Why not invest in fruit/vegetables, inspired by digital farming? The landowner obtains free fruit without spending much money on maintenance. Investors can get fruits/vegetables in larger quantities, fresher, and cheaper during harvest. Fruits and vegetables are often harmed if delivered too slowly. Rich investors with limited land can invest in teak, agarwood, and other trees. When harvesting, investors might choose raw results or direct wood sales earnings. Teak takes at least 7 years to harvest, therefore long-term wood investments carry the risk of crop failure.
9. Teenagers in distant locations can't count, read, or write. Many factors hinder locals' success. Life's demands force them to work instead of study. Creating a learning playground may attract young people to learning. Make a skatepark at school. Skateboarders must learn in school. Donations buy skateboards.
10. Globally, online taxi-bike is known. By hiring a motorcycle/car online, people no longer bother traveling without a vehicle. What if you wish to cross the island or visit remote areas? Is online boat or helicopter rental possible like online taxi-bike? Such a renting process has been done independently thus far and cannot be done quickly.
11. What do startups need now? A startup or investor consultant. How many startups fail to become Unicorns? Many founders don't know how to manage investor money, therefore they waste it on promotions and other things. Many investors only know how to invest and can't guide a struggling firm.
“In times of crisis, the wise build bridges, while the foolish build barriers.” — T’Challa [Black Panther]
Don't chase cash. Money is a byproduct. Profit-seeking is stressful. Market requirements are opportunities. If you have something to say, please comment.
This is only informational. Before implementing ideas, do further study.
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OnChain Wizard
3 years ago
How to make a >800 million dollars in crypto attacking the once 3rd largest stablecoin, Soros style
Everyone is talking about the $UST attack right now, including Janet Yellen. But no one is talking about how much money the attacker made (or how brilliant it was). Lets dig in.
Our story starts in late March, when the Luna Foundation Guard (or LFG) starts buying BTC to help back $UST. LFG started accumulating BTC on 3/22, and by March 26th had a $1bn+ BTC position. This is leg #1 that made this trade (or attack) brilliant.
The second leg comes in the form of the 4pool Frax announcement for $UST on April 1st. This added the second leg needed to help execute the strategy in a capital efficient way (liquidity will be lower and then the attack is on).
We don't know when the attacker borrowed 100k BTC to start the position, other than that it was sold into Kwon's buying (still speculation). LFG bought 15k BTC between March 27th and April 11th, so lets just take the average price between these dates ($42k).
So you have a ~$4.2bn short position built. Over the same time, the attacker builds a $1bn OTC position in $UST. The stage is now set to create a run on the bank and get paid on your BTC short. In anticipation of the 4pool, LFG initially removes $150mm from 3pool liquidity.
The liquidity was pulled on 5/8 and then the attacker uses $350mm of UST to drain curve liquidity (and LFG pulls another $100mm of liquidity).
But this only starts the de-pegging (down to 0.972 at the lows). LFG begins selling $BTC to defend the peg, causing downward pressure on BTC while the run on $UST was just getting started.
With the Curve liquidity drained, the attacker used the remainder of their $1b OTC $UST position ($650mm or so) to start offloading on Binance. As withdrawals from Anchor turned from concern into panic, this caused a real de-peg as people fled for the exits
So LFG is selling $BTC to restore the peg while the attacker is selling $UST on Binance. Eventually the chain gets congested and the CEXs suspend withdrawals of $UST, fueling the bank run panic. $UST de-pegs to 60c at the bottom, while $BTC bleeds out.
The crypto community panics as they wonder how much $BTC will be sold to keep the peg. There are liquidations across the board and LUNA pukes because of its redemption mechanism (the attacker very well could have shorted LUNA as well). BTC fell 25% from $42k on 4/11 to $31.3k
So how much did our attacker make? There aren't details on where they covered obviously, but if they are able to cover (or buy back) the entire position at ~$32k, that means they made $952mm on the short.
On the $350mm of $UST curve dumps I don't think they took much of a loss, lets assume 3% or just $11m. And lets assume that all the Binance dumps were done at 80c, thats another $125mm cost of doing business. For a grand total profit of $815mm (bf borrow cost).
BTC was the perfect playground for the trade, as the liquidity was there to pull it off. While having LFG involved in BTC, and foreseeing they would sell to keep the peg (and prevent LUNA from dying) was the kicker.
Lastly, the liquidity being low on 3pool in advance of 4pool allowed the attacker to drain it with only $350mm, causing the broader panic in both BTC and $UST. Any shorts on LUNA would've added a lot of P&L here as well, with it falling -65% since 5/7.
And for the reply guys, yes I know a lot of this involves some speculation & assumptions. But a lot of money was made here either way, and I thought it would be cool to dive into how they did it.

Vitalik
3 years ago
Fairness alternatives to selling below market clearing prices (or community sentiment, or fun)
When a seller has a limited supply of an item in high (or uncertain and possibly high) demand, they frequently set a price far below what "the market will bear." As a result, the item sells out quickly, with lucky buyers being those who tried to buy first. This has happened in the Ethereum ecosystem, particularly with NFT sales and token sales/ICOs. But this phenomenon is much older; concerts and restaurants frequently make similar choices, resulting in fast sell-outs or long lines.
Why do sellers do this? Economists have long wondered. A seller should sell at the market-clearing price if the amount buyers are willing to buy exactly equals the amount the seller has to sell. If the seller is unsure of the market-clearing price, they should sell at auction and let the market decide. So, if you want to sell something below market value, don't do it. It will hurt your sales and it will hurt your customers. The competitions created by non-price-based allocation mechanisms can sometimes have negative externalities that harm third parties, as we will see.
However, the prevalence of below-market-clearing pricing suggests that sellers do it for good reason. And indeed, as decades of research into this topic has shown, there often are. So, is it possible to achieve the same goals with less unfairness, inefficiency, and harm?
Selling at below market-clearing prices has large inefficiencies and negative externalities
An item that is sold at market value or at an auction allows someone who really wants it to pay the high price or bid high in the auction. So, if a seller sells an item below market value, some people will get it and others won't. But the mechanism deciding who gets the item isn't random, and it's not always well correlated with participant desire. It's not always about being the fastest at clicking buttons. Sometimes it means waking up at 2 a.m. (but 11 p.m. or even 2 p.m. elsewhere). Sometimes it's just a "auction by other means" that's more chaotic, less efficient, and has far more negative externalities.
There are many examples of this in the Ethereum ecosystem. Let's start with the 2017 ICO craze. For example, an ICO project would set the price of the token and a hard maximum for how many tokens they are willing to sell, and the sale would start automatically at some point in time. The sale ends when the cap is reached.
So what? In practice, these sales often ended in 30 seconds or less. Everyone would start sending transactions in as soon as (or just before) the sale started, offering higher and higher fees to encourage miners to include their transaction first. Instead of the token seller receiving revenue, miners receive it, and the sale prices out all other applications on-chain.
The most expensive transaction in the BAT sale set a fee of 580,000 gwei, paying a fee of $6,600 to get included in the sale.
Many ICOs after that tried various strategies to avoid these gas price auctions; one ICO notably had a smart contract that checked the transaction's gasprice and rejected it if it exceeded 50 gwei. But that didn't solve the issue. Buyers hoping to game the system sent many transactions hoping one would get through. An auction by another name, clogging the chain even more.
ICOs have recently lost popularity, but NFTs and NFT sales have risen in popularity. But the NFT space didn't learn from 2017; they do fixed-quantity sales just like ICOs (eg. see the mint function on lines 97-108 of this contract here). So what?
That's not the worst; some NFT sales have caused gas price spikes of up to 2000 gwei.
High gas prices from users fighting to get in first by sending higher and higher transaction fees. An auction renamed, pricing out all other applications on-chain for 15 minutes.
So why do sellers sometimes sell below market price?
Selling below market value is nothing new, and many articles, papers, and podcasts have written (and sometimes bitterly complained) about the unwillingness to use auctions or set prices to market-clearing levels.
Many of the arguments are the same for both blockchain (NFTs and ICOs) and non-blockchain examples (popular restaurants and concerts). Fairness and the desire not to exclude the poor, lose fans or create tension by being perceived as greedy are major concerns. The 1986 paper by Kahneman, Knetsch, and Thaler explains how fairness and greed can influence these decisions. I recall that the desire to avoid perceptions of greed was also a major factor in discouraging the use of auction-like mechanisms in 2017.
Aside from fairness concerns, there is the argument that selling out and long lines create a sense of popularity and prestige, making the product more appealing to others. Long lines should have the same effect as high prices in a rational actor model, but this is not the case in reality. This applies to ICOs and NFTs as well as restaurants. Aside from increasing marketing value, some people find the game of grabbing a limited set of opportunities first before everyone else is quite entertaining.
But there are some blockchain-specific factors. One argument for selling ICO tokens below market value (and one that persuaded the OmiseGo team to adopt their capped sale strategy) is community dynamics. The first rule of community sentiment management is to encourage price increases. People are happy if they are "in the green." If the price drops below what the community members paid, they are unhappy and start calling you a scammer, possibly causing a social media cascade where everyone calls you a scammer.
This effect can only be avoided by pricing low enough that post-launch market prices will almost certainly be higher. But how do you do this without creating a rush for the gates that leads to an auction?
Interesting solutions
It's 2021. We have a blockchain. The blockchain is home to a powerful decentralized finance ecosystem, as well as a rapidly expanding set of non-financial tools. The blockchain also allows us to reset social norms. Where decades of economists yelling about "efficiency" failed, blockchains may be able to legitimize new uses of mechanism design. If we could use our more advanced tools to create an approach that more directly solves the problems, with fewer side effects, wouldn't that be better than fiddling with a coarse-grained one-dimensional strategy space of selling at market price versus below market price?
Begin with the goals. We'll try to cover ICOs, NFTs, and conference tickets (really a type of NFT) all at the same time.
1. Fairness: don't completely exclude low-income people from participation; give them a chance. The goal of token sales is to avoid high initial wealth concentration and have a larger and more diverse initial token holder community.
2. Don’t create races: Avoid situations where many people rush to do the same thing and only a few get in (this is the type of situation that leads to the horrible auctions-by-another-name that we saw above).
3. Don't require precise market knowledge: the mechanism should work even if the seller has no idea how much demand exists.
4. Fun: The process of participating in the sale should be fun and game-like, but not frustrating.
5. Give buyers positive expected returns: in the case of a token (or an NFT), buyers should expect price increases rather than decreases. This requires selling below market value.
Let's start with (1). From Ethereum's perspective, there is a simple solution. Use a tool designed for the job: proof of personhood protocols! Here's one quick idea:
Mechanism 1 Each participant (verified by ID) can buy up to ‘’X’’ tokens at price P, with the option to buy more at an auction.
With the per-person mechanism, buyers can get positive expected returns for the portion sold through the per-person mechanism, and the auction part does not require sellers to understand demand levels. Is it race-free? The number of participants buying through the per-person pool appears to be high. But what if the per-person pool isn't big enough to accommodate everyone?
Make the per-person allocation amount dynamic.
Mechanism 2 Each participant can deposit up to X tokens into a smart contract to declare interest. Last but not least, each buyer receives min(X, N / buyers) tokens, where N is the total sold through the per-person pool (some other amount can also be sold by auction). The buyer gets their deposit back if it exceeds the amount needed to buy their allocation.
No longer is there a race condition based on the number of buyers per person. No matter how high the demand, it's always better to join sooner rather than later.
Here's another idea if you like clever game mechanics with fancy quadratic formulas.
Mechanism 3 Each participant can buy X units at a price P X 2 up to a maximum of C tokens per buyer. C starts low and gradually increases until enough units are sold.
The quantity allocated to each buyer is theoretically optimal, though post-sale transfers will degrade this optimality over time. Mechanisms 2 and 3 appear to meet all of the above objectives. They're not perfect, but they're good starting points.
One more issue. For fixed and limited supply NFTs, the equilibrium purchased quantity per participant may be fractional (in mechanism 2, number of buyers > N, and in mechanism 3, setting C = 1 may already lead to over-subscription). With fractional sales, you can offer lottery tickets: if there are N items available, you have a chance of N/number of buyers of getting the item, otherwise you get a refund. For a conference, groups could bundle their lottery tickets to guarantee a win or a loss. The certainty of getting the item can be auctioned.
The bottom tier of "sponsorships" can be used to sell conference tickets at market rate. You may end up with a sponsor board full of people's faces, but is that okay? After all, John Lilic was on EthCC's sponsor board!
Simply put, if you want to be reliably fair to people, you need an input that explicitly measures people. Authentication protocols do this (and if desired can be combined with zero knowledge proofs to ensure privacy). So we should combine the efficiency of market and auction-based pricing with the equality of proof of personhood mechanics.
Answers to possible questions
Q: Won't people who don't care about your project buy the item and immediately resell it?
A: Not at first. Meta-games take time to appear in practice. If they do, making them untradeable for a while may help mitigate the damage. Using your face to claim that your previous account was hacked and that your identity, including everything in it, should be moved to another account works because proof-of-personhood identities are untradeable.
Q: What if I want to make my item available to a specific community?
A: Instead of ID, use proof of participation tokens linked to community events. Another option, also serving egalitarian and gamification purposes, is to encrypt items within publicly available puzzle solutions.
Q: How do we know they'll accept? Strange new mechanisms have previously been resisted.
A: Having economists write screeds about how they "should" accept a new mechanism that they find strange is difficult (or even "equity"). However, abrupt changes in context effectively reset people's expectations. So the blockchain space is the best place to try this. You could wait for the "metaverse", but it's possible that the best version will run on Ethereum anyway, so start now.

Will Lockett
3 years ago
Tesla recently disclosed its greatest secret.
The VP has revealed a secret that should frighten the rest of the EV world.
Tesla led the EV revolution. Elon Musk's invention offers a viable alternative to gas-guzzlers. Tesla has lost ground in recent years. VW, BMW, Mercedes, and Ford offer EVs with similar ranges, charging speeds, performance, and cost. Tesla's next-generation 4680 battery pack, Roadster, Cybertruck, and Semi were all delayed. CATL offers superior batteries than the 4680. Martin Viecha, Tesla's Vice President, recently told Business Insider something that startled the EV world and will establish Tesla as the EV king.
Viecha mentioned that Tesla's production costs have dropped 57% since 2017. This isn't due to cheaper batteries or devices like Model 3. No, this is due to amazing factory efficiency gains.
Musk wasn't crazy to want a nearly 100% automated production line, and Tesla's strategy of sticking with one model and improving it has paid off. Others change models every several years. This implies they must spend on new R&D, set up factories, and modernize service and parts systems. All of this costs a ton of money and prevents them from refining production to cut expenses.
Meanwhile, Tesla updates its vehicles progressively. Everything from the backseats to the screen has been enhanced in a 2022 Model 3. Tesla can refine, standardize, and cheaply produce every part without changing the production line.
In 2017, Tesla's automobile production averaged $84,000. In 2022, it'll be $36,000.
Mr. Viecha also claimed that new factories in Shanghai and Berlin will be significantly cheaper to operate once fully operating.
Tesla's hand is visible. Tesla selling $36,000 cars for $60,000 This barely beats the competition. Model Y long-range costs just over $60,000. Tesla makes $24,000+ every sale, giving it a 40% profit margin, one of the best in the auto business.
VW I.D4 costs about the same but makes no profit. Tesla's rivals face similar challenges. Their EVs make little or no profit.
Tesla costs the same as other EVs, but they're in a different league.
But don't forget that the battery pack accounts for 40% of an EV's cost. Tesla may soon fully utilize its 4680 battery pack.
The 4680 battery pack has larger cells and a unique internal design. This means fewer cells are needed for a car, making it cheaper to assemble and produce (per kWh). Energy density and charge speeds increase slightly.
Tesla underestimated the difficulty of making this revolutionary new cell. Each time they try to scale up production, quality drops and rejected cells rise.
Tesla recently installed this battery pack in Model Ys and is scaling production. If they succeed, Tesla battery prices will plummet.
Tesla's Model Ys 2170 battery costs $11,000. The same size pack with 4680 cells costs $3,400 less. Once scaled, it could be $5,500 (50%) less. The 4680 battery pack could reduce Tesla production costs by 20%.
With these cost savings, Tesla could sell Model Ys for $40,000 while still making a profit. They could offer a $25,000 car.
Even with new battery technology, it seems like other manufacturers will struggle to make EVs profitable.
Teslas cost about the same as competitors, so don't be fooled. Behind the scenes, they're still years ahead, and the 4680 battery pack and new factories will only increase that lead. Musk faces a first. He could sell Teslas at current prices and make billions while other manufacturers struggle. Or, he could massively undercut everyone and crush the competition once and for all. Tesla and Elon win.
