We’re very excited to be using an Autobid contract to distribute our PHI tokens, but since it is a new approach, we recognize that there are going to be quite a few questions that people have regarding it. Here are a few of our answers.
Q: What are the advantages of the Autobid model?
A: It shifts risk away from the users via a money-back guarantee, provides considerable incentive for the team to deliver on the project promises, gives users the opportunity to experiment with the tokens and project without strongly committing any funds to it, allows community-driven token-signaling to begin steering and meaningfully influencing the project while it is young and the vision is not yet ossified, and provides light economic protections while the contract is active.
Q: How will users interact with the contract, and what will the user experience be like?
A: In order to receive tokens, users merely have to send ETH to the Autobid contract normally, or to use Metamask on our Autobid page to do the conversion for them. Since the contract is programmed to automatically grant tokens in response to successful sends (and not to accept any such sends after it expires), there is no risk of users losing funds by trying to send them at the wrong time or after the contract sells out. As for the process of converting PHI tokens back to ETH, the contract operates identically to Delphi’s Redemption Contract (using an approve() → redeemTokens() process), which has experienced no technical issues whatsoever and has been working as intended ever since it was deployed. Once again, the Autobid page can be used for this process, too. Users are free to interact with the Autobid contract as many times as they desire while it is active.
Q: How long will the contract remain active?
A: Until it runs out of tokens or the expiration date is reached; whichever condition is reached first. We are setting the Autobid contract expiration date to July 1, 2018 (providing users a six-month window before it expires).
Q: What if I think the token price is too expensive?
A: The beauty of the Autobid contract is that the tokens are effectively free from the perspective of an unconvinced user. If you want to experiment with the tokens, you can send as little ETH into the contract as you want (whatever value you are comfortable with “playing around with”), and receive some PHI in return. If you end up deciding that you didn’t get “enough” tokens for the ETH that you sent, you can simply redeem your ETH and wind up right back where you started. No harm done! As long as you don’t wait until the very last minute to perform your experiments, you can change your mind freely.
Q: What happens to the tokens and/or ETH that the contract controls after it expires?
A: The administrator account (controlled by the team) is granted withdrawal access to both the tokens and the ETH available to the contract upon expiration.
Q: How will the team be able to fund development in the meantime (while the Autobid contract is active), if you don’t have access to any of the ETH sent to it?
A: This is a very good question, and an important consideration for any teams that are evaluating an Autobid approach for their own token launch and fundraising model. In our case, since Delphi is a passion project for the team, we are determined to continue working on building and improving the platform even in the absence of available funds in the meantime. For other teams that may require more immediate access to the funds raised, modifications to the standard Autobid model might be necessary.
Q: Will there be any sort of bonus for early participation?
A: We spent a lot of time debating whether or not incorporating a bonus alongside the Autobid contract would be the right course of action, because we heard the community express considerable interest for such an incentive/reward, and we received some surprisingly insightful suggestions on how such a bonus could work in the context of such a contract. Ultimately we decided that a “pure Autobid” approach, without any bonus included, represents the most fair path forward and the option that is most in-line with the Delphi spirit that we’re trying to adhere to.
Q: How will you encourage investment, if not with a bonus?
A: We are not trying to encourage investment with our token distribution model. Though many in the community have voiced concerns that the Autobid contract may not appeal to prospective investors in the space, we are not trying to market PHI as an investment opportunity, and cannot in good conscience use investment-oriented logic as a rationale for our distribution approach or contract design. While we completely understand the sentiment we have heard expressed on this subject (and while the Autobid contract does actually provide interesting and even attractive economic properties from such a perspective), we cannot base our decisions around what “investors” might want, when our token was never an investment product to begin with. The Autobid contract provides a multitude of benefits to token users and network participants, which is the demographic that we want to target and make sure is as satisfied as possible.
Q: Will 100% of PHI be supplied to the contract?
A: No. A total of 60M PHI (3/4 of the total supply) will be used to fund the contract. The remaining 20M PHI (1/4 of the total supply) will be locked up until the Autobid expiration date is reached, to prevent the contract from being gameable and to ensure it is risk-free.
Q: Will there still be PHI bounty rewards awarded to community members who have contributed via Delphi’s bounty programs, and if so, how will that affect the Autobid contract?
A: Yes. After the expiration date is reached, the PHI tokens that were not supplied to the Autobid contract (making up 1/4 of the total supply) will be accessible again, and bounty rewards can begin to be rewarded from them. Because these tokens remain locked up while the Autobid contract is active, they cannot affect its operation.
If you think of any questions that we didn’t get to above, let us know!