Thanks so much, Justin.
G. Paul Needham

Hi G. Paul Needham, thanks for the thoughts.

My prefered route is to create a spread which the developers can drawn down. That way there’s a constant flow of eth to the project, rather than a once off injection. Premining isn’t possible because it would create a fractional reserve situation but the buying in early by developers is a viable version of premining. You could always have transaction fees as you suggest but figuring out how to set the optimal fee is not a trivial task.

I don’t really think of locked up cryptocurrency as a form of inefficiency and I’m quite a fan of burning and staking.

It’s not like locking up gold where the actual gold could be used for electronics or other purposes but is just sitting in a vault. 1 eth isn’t more socially useful than 0.01 eth in the same way that 1kg of gold is more useful than 1 gram of gold. Instead the gas price determines the usefulness of the eth. The quantities are just ratios of the same thing. So locking up eth just increases the value of eth holdings for everyone else in the world through deflation. The more projects create sinks like this, the more attractive eth becomes to use a “fuel” for future projects so the deflation of eth by projects like bonding curves creates a virtuous cycle. Also you’re not just locking it up but issuing a token which can be used to redeem it so it’s not lost to the world. A fully backed token bonding curve is like the gold standard but without the social cost of wasting gold.

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