On Price Fluctuations
Ser, why dump?
In product building, there is a concept called the ‘a-ha moment’. This is the moment where a user realises the value of the product they are using. For Uber, it’s the moment your taxi arrives, for Instagram, it’s uploading your first picture, Amazon — getting your new book delivered to you the next day.
When crafting a good product, it’s important you get as many users as possible to the a-ha moment, after they reach here, they become far more sticky, are far more likely to use your product again, and far less likely to churn.
Lithiums A-ha Moment
The difficulty with a financial tool like Lithium, is that the a-ha moment of using our product can often be a bit vague, it also may come at different times for different people. We think there are a few clear a-ha moments in our product
- When you get involved in an IDO and the price surges from the private sale price
- When you receive an airdrop, for simply holding your tokens
- When you realise your number of tokens has increased, from reflections
The problem with these three key points in the user journey is that they come quite late on. After you’ve invested in an IDO, you won’t receive any of these benefits until a few weeks later. This is a problem for us, if investors can’t see the value of holding the $EBSC token, they are likely to sell their bags as soon as they’ve got what they came for — access to the IDO.
In order to solve these issues, there are three things we can do.
- Get them to the a-ha moment quicker
- Make the a-ha moments more obvious
- Ensure people stick around long enough to realise the a-ha moment.
Unfortunately, point number one is largely out of our control, we can’t control the price action of private sales, and we also can’t speed up the airdrop process. Therefore, we have to make the moment of value more obvious, and try and get people to stick around long enough. Let’s take a look at how we’ll do this.
Making The A-Ha Moments More Obvious
The problem with our current process is that often the times you receive value aren’t that obvious. Airdrops of token happen gradually, you may not ever even really notice your tokens going up, but the reality is that over a month of high traction volume you may be receiving upto 5% interest your tokens in reflections.
The same is also true for profits on IDOs. People trade differently, some just like to let winners ride, some like to take small profits on the way. Either way, it’s not immediately clear to the investor how profitable their investment has been, unless they are methodically tracking all this.
Our solution to this is to have a clear dashboard, with a ‘rewards’ section. In this section we’ll be removing the passive airdrops functionality and instead have investors log in to ‘harvest’ their rewards. This may add some friction, but it serves the dual benefit of making sure that only users who are staked revive rewards (more on that later) while simultaneously providing them with a discrete, clear action where they realise the value of our product.
Ensure People Stick Around To Realise The A-Ha Moment
There’s no point making it the A-Ha moments really obvious, if investors aren’t sticking around to realise them. You only get reflection rewards if you hold your bag long enough to realise them, likewise you don’t get project airdrops if you sell your bag as soon as the IDO is complete.
In order to make sure people stick around, we are implementing a completely new staking reward system, that provides real benefits to long-term holders, while still allowing those who want the flexibility of the current Lithium product to participate in IDOs.
You can read more about v2 staking here, but the long and short of it, that if you commit to staking for 30 days or more, you will get larger IDO allocations, and better rewards.
We are confident that if we can encourage investors to stick around for 30 days, they will see the value of Lithium, as they’ll have participated in multiple IDOs, realised $EBSC harvest rewards, and also benefit from one or two IDO airdrops. If they see all this value that their investment is bringing them, we are confident that once the time comes to unstake 30 days down the line, they will decide to just restake, rather than sell their tokens.
In conclusion, ensuring stable growth by limiting price volatility (at least to the downside) is a simple combination of making the value of the Lithium ecosystem more obvious, and making sure people stick around long enough to realise that value. We have every confidence that staking v2, with its focus on rewards for longer-term holders and the more active nature of realising these rewards, will solve these issues.
