Community sentiment towards creating a token is very high. We are also in need of some urgent action to be able to provide short-term and long-term liquidity for grain.
- Launch Grain as a free-floating ERC-20 token (on-chain grain) with variable supply minting and burning functionality (i.e. no hard cap on supply, allowing us flexibility to mint more grain down the line if needed).
- The token minting will be technically controlled by the existing SourceCred Multi-Sig, but will be governed by SourceCred Core, or whatever governance body/mechanism SourceCred Core may choose to delegate/defer to.
- Anyone can sell grain from their sourcecred instance ledger balance (instance-grain) in exchange for an equivalent amount of on-chain grain.
- For now, our funding will only be used to purchase instance-grain as describe in this proposal up to $1USD. Our funding will not be used to buyback on-chain grain for now.
- The ability to convert instance-grain into on-chain grain on request allows folks like DL to lock in their commitment to not eat up our current funding, allowing us to have a clearer picture of what kind of short-term liquidity we can provide.
- The convert-on-request model is also important because we do not have a viable Eth address for contributors, nor a good way to mass collect them.
- The proposed parameters of the token leave all the doors open for changing minting terms and building additional infrastructure, so that we retain the power to choose more deliberately.
- ERC-20 is easier to use and easier to learn about than side-chains such as xDai. Although gas fees are high, L2s will soon address the problems with Eth mainnet, and our ERC-20 token will be compatible with L2 functionality. We will even be able to use 1hive tools like Gardens using L2s, in the future.
- The urgent creation of a token has the possibility of creating additional liquidity, since the creation of some infrastructure like liquidity pools is permissionless. This means on-chain grain might open up more short-term liquidity with no additional effort on our part, even potentially to the point of being more attractive than our up-to-$1 instance-grain liquidity.
This will be proposed at the Emergency Core Meeting today if there’s time, or next Tuesday otherwise.
Thanks @s_ben for helping draft this.