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.
More on Web3 & Crypto
Ryan Weeks
3 years ago
Terra fiasco raises TRON's stablecoin backstop
After Terra's algorithmic stablecoin collapsed in May, TRON announced a plan to increase the capital backing its own stablecoin.
USDD, a near-carbon copy of Terra's UST, arrived on the TRON blockchain on May 5. TRON founder Justin Sun says USDD will be overcollateralized after initially being pegged algorithmically to the US dollar.
A reserve of cryptocurrencies and stablecoins will be kept at 130 percent of total USDD issuance, he said. TRON described the collateral ratio as "guaranteed" and said it would begin publishing real-time updates on June 5.
Currently, the reserve contains 14,040 bitcoin (around $418 million), 140 million USDT, 1.9 billion TRX, and 8.29 billion TRX in a burning contract.
Sun: "We want to hybridize USDD." We have an algorithmic stablecoin and TRON DAO Reserve.
algorithmic failure
USDD was designed to incentivize arbitrageurs to keep its price pegged to the US dollar by trading TRX, TRON's token, and USDD. Like Terra, TRON signaled its intent to establish a bitcoin and cryptocurrency reserve to support USDD in extreme market conditions.
Still, Terra's UST failed despite these safeguards. The stablecoin veered sharply away from its dollar peg in mid-May, bringing down Terra's LUNA and wiping out $40 billion in value in days. In a frantic attempt to restore the peg, billions of dollars in bitcoin were sold and unprecedented volumes of LUNA were issued.
Sun believes USDD, which has a total circulating supply of $667 million, can be backed up.
"Our reserve backing is diversified." Bitcoin and stablecoins are included. USDC will be a small part of Circle's reserve, he said.
TRON's news release lists the reserve's assets as bitcoin, TRX, USDC, USDT, TUSD, and USDJ.
All Bitcoin addresses will be signed so everyone knows they belong to us, Sun said.
Not giving in
Sun told that the crypto industry needs "decentralized" stablecoins that regulators can't touch.
Sun said the Luna Foundation Guard, a Singapore-based non-profit that raised billions in cryptocurrency to buttress UST, mismanaged the situation by trying to sell to panicked investors.
He said, "We must be ahead of the market." We want to stabilize the market and reduce volatility.
Currently, TRON finances most of its reserve directly, but Sun says the company hopes to add external capital soon.
Before its demise, UST holders could park the stablecoin in Terra's lending platform Anchor Protocol to earn 20% interest, which many deemed unsustainable. TRON's JustLend is similar. Sun hopes to raise annual interest rates from 17.67% to "around 30%."
This post is a summary. Read full article here
CyberPunkMetalHead
3 years ago
It's all about the ego with Terra 2.0.
UST depegs and LUNA crashes 99.999% in a fraction of the time it takes the Moon to orbit the Earth.
Fat Man, a Terra whistle-blower, promises to expose Do Kwon's dirty secrets and shady deals.
The Terra community has voted to relaunch Terra LUNA on a new blockchain. The Terra 2.0 Pheonix-1 blockchain went live on May 28, 2022, and people were airdropped the new LUNA, now called LUNA, while the old LUNA became LUNA Classic.
Does LUNA deserve another chance? To answer this, or at least start a conversation about the Terra 2.0 chain's advantages and limitations, we must assess its fundamentals, ideology, and long-term vision.
Whatever the result, our analysis must be thorough and ruthless. A failure of this magnitude cannot happen again, so we must magnify every potential breaking point by 10.
Will UST and LUNA holders be compensated in full?
The obvious. First, and arguably most important, is to restore previous UST and LUNA holders' bags.
Terra 2.0 has 1,000,000,000,000 tokens to distribute.
25% of a community pool
Holders of pre-attack LUNA: 35%
10% of aUST holders prior to attack
Holders of LUNA after an attack: 10%
UST holders as of the attack: 20%
Every LUNA and UST holder has been compensated according to the above proposal.
According to self-reported data, the new chain has 210.000.000 tokens and a $1.3bn marketcap. LUNC and UST alone lost $40bn. The new token must fill this gap. Since launch:
LUNA holders collectively own $1b worth of LUNA if we subtract the 25% community pool airdrop from the current market cap and assume airdropped LUNA was never sold.
At the current supply, the chain must grow 40 times to compensate holders. At the current supply, LUNA must reach $240.
LUNA needs a full-on Bull Market to make LUNC and UST holders whole.
Who knows if you'll be whole? From the time you bought to the amount and price, there are too many variables to determine if Terra can cover individual losses.
The above distribution doesn't consider individual cases. Terra didn't solve individual cases. It would have been huge.
What does LUNA offer in terms of value?
UST's marketcap peaked at $18bn, while LUNC's was $41bn. LUNC and UST drove the Terra chain's value.
After it was confirmed (again) that algorithmic stablecoins are bad, Terra 2.0 will no longer support them.
Algorithmic stablecoins contributed greatly to Terra's growth and value proposition. Terra 2.0 has no product without algorithmic stablecoins.
Terra 2.0 has an identity crisis because it has no actual product. It's like Volkswagen faking carbon emission results and then stopping car production.
A project that has already lost the trust of its users and nearly all of its value cannot survive without a clear and in-demand use case.
Do Kwon, how about him?
Oh, the Twitter-caller-poor? Who challenges crypto billionaires to break his LUNA chain? Who dissolved Terra Labs South Korea before depeg? Arrogant guy?
That's not a good image for LUNA, especially when making amends. I think he should step down and let a nicer person be Terra 2.0's frontman.
The verdict
Terra has a terrific community with an arrogant, unlikeable leader. The new LUNA chain must grow 40 times before it can start making up its losses, and even then, not everyone's losses will be covered.
I won't invest in Terra 2.0 or other algorithmic stablecoins in the near future. I won't be near any Do Kwon-related project within 100 miles. My opinion.
Can Terra 2.0 be saved? Comment below.
Tim Denning
3 years ago
The Dogecoin millionaire mysteriously disappeared.
The American who bought a meme cryptocurrency.
Cryptocurrency is the financial underground.
I love it. But there’s one thing I hate: scams. Over the last few years the Dogecoin cryptocurrency saw massive gains.
Glauber Contessoto overreacted. He shared his rags-to-riches cryptocurrency with the media.
He's only wealthy on paper. No longer Dogecoin millionaire.
Here's what he's doing now. It'll make you rethink cryptocurrency investing.
Strange beginnings
Glauber once had a $36,000-a-year job.
He grew up poor and wanted to make his mother proud. Tesla was his first investment. He bought GameStop stock after Reddit boosted it.
He bought whatever was hot.
He was a young investor. Memes, not research, influenced his decisions.
Elon Musk (aka Papa Elon) began tweeting about Dogecoin.
Doge is a 2013 cryptocurrency. One founder is Australian. He insists it's funny.
He was shocked anyone bought it LOL.
Doge is a Shiba Inu-themed meme. Now whenever I see a Shiba Inu, I think of Doge.
Elon helped drive up the price of Doge by talking about it in 2020 and 2021 (don't take investment advice from Elon; he's joking and gaslighting you).
Glauber caved. He invested everything in Doge. He borrowed from family and friends. He maxed out his credit card to buy more Doge. Yuck.
Internet dubbed him a genius. Slumdog millionaire and The Dogefather were nicknames. Elon pumped Doge on social media.
Good times.
From $180,000 to $1,000,000+
TikTok skyrocketed Doge's price.
Reddit fueled up. Influencers recommended buying Doge because of its popularity. Glauber's motto:
Scared money doesn't earn.
Glauber was no broke ass anymore.
His $180,000 Dogecoin investment became $1M. He championed investing. He quit his dumb job like a rebellious millennial.
A puppy dog meme captivated the internet.
Rise and fall
Whenever I invest in anything I ask myself “what utility does this have?”
Dogecoin is useless.
You buy it for the cute puppy face and hope others will too, driving up the price. All cryptocurrencies fell in 2021's second half.
Central banks raised interest rates, and inflation became a pain.
Dogecoin fell more than others. 90% decline.
Glauber’s Dogecoin is now worth $323K. Still no sales. His dog god is unshakeable. Confidence rocks. Dogecoin millionaire recently said...
“I should have sold some.”
Yes, sir.
He now avoids speculative cryptocurrencies like Dogecoin and focuses on Bitcoin and Ethereum.
I've long said this. Starbucks is building on Ethereum.
It's useful. Useful. Developers use Ethereum daily. Investing makes you wiser over time, like the Dogecoin millionaire.
When risk b*tch slaps you, humility follows, as it did for me when I lost money.
You have to lose money to make money. Few understand.
Dogecoin's omissions
You might be thinking Dogecoin is crap.
I'll take a contrarian stance. Dogecoin does nothing, but it has a strong community. Dogecoin dominates internet memes.
It's silly.
Not quite. The message of crypto that many people forget is that it’s a change in business model.
Businesses create products and services, then advertise to find customers. Crypto Web3 works backwards. A company builds a fanbase but sells them nothing.
Once the community reaches MVC (minimum viable community), a business can be formed.
Community members are relational versus transactional. They're invested in a cause and care about it (typically ownership in the business via crypto).
In this new world, Dogecoin has the most important feature.
Summary
While Dogecoin does have a community I still dislike it.
It's all shady. Anything Elon Musk recommends is a bad investment (except SpaceX & Tesla are great companies).
Dogecoin Millionaire has wised up and isn't YOLOing into more dog memes.
Don't follow the crowd or the hype. Investing is a long-term sport based on fundamentals and research.
Since Ethereum's inception, I've spent 10,000 hours researching.
Dogecoin will be the foundation of something new, like Pets.com at the start of the dot-com revolution. But I doubt Doge will boom.
Be safe!
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Hudson Rennie
3 years ago
My Work at a $1.2 Billion Startup That Failed
Sometimes doing everything correctly isn't enough.
In 2020, I could fix my life.
After failing to start a business, I owed $40,000 and had no work.
A $1.2 billion startup on the cusp of going public pulled me up.
Ironically, it was getting ready for an epic fall — with the world watching.
Life sometimes helps. Without a base, even the strongest fall. A corporation that did everything right failed 3 months after going public.
First-row view.
Apple is the creator of Adore.
Out of respect, I've altered the company and employees' names in this account, despite their failure.
Although being a publicly traded company, it may become obvious.
We’ll call it “Adore” — a revolutionary concept in retail shopping.
Two Apple execs established Adore in 2014 with a focus on people-first purchasing.
Jon and Tim:
The concept for the stylish Apple retail locations you see today was developed by retail expert Jon Swanson, who collaborated closely with Steve Jobs.
Tim Cruiter is a graphic designer who produced the recognizable bouncing lamp video that appears at the start of every Pixar film.
The dynamic duo realized their vision.
“What if you could combine the convenience of online shopping with the confidence of the conventional brick-and-mortar store experience.”
Adore's mobile store concept combined traditional retail with online shopping.
Adore brought joy to 70+ cities and 4 countries over 7 years, including the US, Canada, and the UK.
Being employed on the ground floor, with world dominance and IPO on the horizon, was exciting.
I started as an Adore Expert.
I delivered cell phones, helped consumers set them up, and sold add-ons.
As the company grew, I became a Virtual Learning Facilitator and trained new employees across North America using Zoom.
In this capacity, I gained corporate insider knowledge. I worked with the creative team and Jon and Tim.
It's where I saw company foundation fissures. Despite appearances, investors were concerned.
The business strategy was ground-breaking.
Even after seeing my employee stocks fall from a home down payment to $0 (when Adore filed for bankruptcy), it's hard to pinpoint what went wrong.
Solid business model, well-executed.
Jon and Tim's chase for public funding ended in glory.
Here’s the business model in a nutshell:
Buying cell phones is cumbersome. You have two choices:
Online purchase: not knowing what plan you require or how to operate your device.
Enter a store, which can be troublesome and stressful.
Apple, AT&T, and Rogers offered Adore as a free delivery add-on. Customers could:
Have their phone delivered by UPS or Canada Post in 1-2 weeks.
Alternately, arrange for a person to visit them the same day (or sometimes even the same hour) to assist them set up their phone and demonstrate how to use it (transferring contacts, switching the SIM card, etc.).
Each Adore Expert brought a van with extra devices and accessories to customers.
Happy customers.
Here’s how Adore and its partners made money:
Adores partners appreciated sending Experts to consumers' homes since they improved customer satisfaction, average sale, and gadget returns.
**Telecom enterprises have low customer satisfaction. The average NPS is 30/100. Adore's global NPS was 80.
Adore made money by:
a set cost for each delivery
commission on sold warranties and extras
Consumer product applications seemed infinite.
A proprietary scheduling system (“The Adore App”), allowed for same-day, even same-hour deliveries.
It differentiates Adore.
They treated staff generously by:
Options on stock
health advantages
sales enticements
high rates per hour
Four-day workweeks were set by experts.
Being hired early felt like joining Uber, Netflix, or Tesla. We hoped the company's stocks would rise.
Exciting times.
I smiled as I greeted more than 1,000 new staff.
I spent a decade in retail before joining Adore. I needed a change.
After a leap of faith, I needed a lifeline. So, I applied for retail sales jobs in the spring of 2019.
The universe typically offers you what you want after you accept what you need. I needed a job to settle my debt and reach $0 again.
And the universe listened.
After being hired as an Adore Expert, I became a Virtual Learning Facilitator. Enough said.
After weeks of economic damage from the pandemic.
This employment let me work from home during the pandemic. It taught me excellent business skills.
I was active in brainstorming, onboarding new personnel, and expanding communication as we grew.
This job gave me vital skills and a regular paycheck during the pandemic.
It wasn’t until January of 2022 that I left on my own accord to try to work for myself again — this time, it’s going much better.
Adore was perfect. We valued:
Connection
Discovery
Empathy
Everything we did centered on compassion, and we held frequent Justice Calls to discuss diversity and work culture.
The last day of onboarding typically ended in tears as employees felt like they'd found a home, as I had.
Like all nice things, the wonderful vibes ended.
First indication of distress
My first day at the workplace was great.
Fun, intuitive, and they wanted creative individuals, not salesman.
While sales were important, the company's vision was more important.
“To deliver joy through life-changing mobile retail experiences.”
Thorough, forward-thinking training. We had a module on intuition. It gave us role ownership.
We were flown cross-country for training, gave feedback, and felt like we made a difference. Multiple contacts responded immediately and enthusiastically.
The atmosphere was genuine.
Making money was secondary, though. Incredible service was a priority.
Jon and Tim answered new hires' questions during Zoom calls during onboarding. CEOs seldom meet new hires this way, but they seemed to enjoy it.
All appeared well.
But in late 2021, things started changing.
Adore's leadership changed after its IPO. From basic values to sales maximization. We lost communication and were forced to fend for ourselves.
Removed the training wheels.
It got tougher to gain instructions from those above me, and new employees told me their roles weren't as advertised.
External money-focused managers were hired.
Instead of creative types, we hired salespeople.
With a new focus on numbers, Adore's uniqueness began to crumble.
Via Zoom, hundreds of workers were let go.
So.
Early in 2022, mass Zoom firings were trending. A CEO firing 900 workers over Zoom went viral.
Adore was special to me, but it became a headline.
30 June 2022, Vice Motherboard published Watch as Adore's CEO Fires Hundreds.
It described a leaked video of Jon Swanson laying off all staff in Canada and the UK.
They called it a “notice of redundancy”.
The corporation couldn't pay its employees.
I loved Adore's underlying ideals, among other things. We called clients Adorers and sold solutions, not add-ons.
But, like anything, a company is only as strong as its weakest link. And obviously, the people-first focus wasn’t making enough money.
There were signs. The expansion was presumably a race against time and money.
Adore finally declared bankruptcy.
Adore declared bankruptcy 3 months after going public. It happened in waves, like any large-scale fall.
Initial key players to leave were
Then, communication deteriorated.
Lastly, the corporate culture disintegrated.
6 months after leaving Adore, I received a letter in the mail from a Law firm — it was about my stocks.
Adore filed Chapter 11. I had to sue to collect my worthless investments.
I hoped those stocks will be valuable someday. Nope. Nope.
Sad, I sighed.
$1.2 billion firm gone.
I left the workplace 3 months before starting a writing business. Despite being mediocre, I'm doing fine.
I got up as Adore fell.
Finally, can we scale kindness?
I trust my gut. Changes at Adore made me leave before it sank.
Adores' unceremonious slide from a top startup to bankruptcy is astonishing to me.
The company did everything perfectly, in my opinion.
first to market,
provided excellent service
paid their staff handsomely.
was responsible and attentive to criticism
The company wasn't led by an egotistical eccentric. The crew had centuries of cumulative space experience.
I'm optimistic about the future of work culture, but is compassion scalable?
Jayden Levitt
3 years ago
Billionaire who was disgraced lost his wealth more quickly than anyone in history
If you're not genuine, you'll be revealed.
Sam Bankman-Fried (SBF) was called the Cryptocurrency Warren Buffet.
No wonder.
SBF's trading expertise, Blockchain knowledge, and ability to construct FTX attracted mainstream investors.
He had a fantastic worldview, donating much of his riches to charity.
As the onion layers peel back, it's clear he wasn't the altruistic media figure he portrayed.
SBF's mistakes were disastrous.
Customer deposits were traded and borrowed by him.
With ten other employees, he shared a $40 million mansion where they all had polyamorous relationships.
Tone-deaf and wasteful marketing expenditures, such as the $200 million spent to change the name of the Miami Heat stadium to the FTX Arena
Democrats received a $40 million campaign gift.
And now there seems to be no regret.
FTX was a 32-billion-dollar cryptocurrency exchange.
It went bankrupt practically overnight.
SBF, FTX's creator, exploited client funds to leverage trade.
FTX had $1 billion in customer withdrawal reserves against $9 billion in liabilities in sister business Alameda Research.
Bloomberg Billionaire Index says it's the largest and fastest net worth loss in history.
It gets worse.
SBF's net worth is $900 Million, however he must still finalize FTX's bankruptcy.
SBF's arrest in the Bahamas and SEC inquiry followed news that his cryptocurrency exchange had crashed, losing billions in customer deposits.
A journalist contacted him on Twitter D.M., and their exchange is telling.
His ideas are revealed.
Kelsey Piper says they didn't expect him to answer because people under investigation don't comment.
Bankman-Fried wanted to communicate, and the interaction shows he has little remorse.
SBF talks honestly about FTX gaming customers' money and insults his competition.
Reporter Kelsey Piper was outraged by what he said and felt the mistakes SBF says plague him didn't evident in the messages.
Before FTX's crash, SBF was a poster child for Cryptocurrency regulation and avoided criticizing U.S. regulators.
He tells Piper that his lobbying is just excellent PR.
It shows his genuine views and supports cynics' opinions that his attempts to win over U.S. authorities were good for his image rather than Crypto.
SBF’s responses are in Grey, and Pipers are in Blue.
It's unclear if SBF cut corners for his gain. In their Twitter exchange, Piper revisits an interview question about ethics.
SBF says, "All the foolish sh*t I said"
SBF claims FTX has never invested customer monies.
Piper challenged him on Twitter.
While he insisted FTX didn't use customer deposits, he said sibling business Alameda borrowed too much from FTX's balance sheet.
He did, basically.
When consumers tried to withdraw money, FTX was short.
SBF thought Alameda had enough money to cover FTX customers' withdrawals, but life sneaks up on you.
SBF believes most exchanges have done something similar to FTX, but they haven't had a bank run (a bunch of people all wanting to get their deposits out at the same time).
SBF believes he shouldn't have consented to the bankruptcy and kept attempting to raise more money because withdrawals would be open in a month with clients whole.
If additional money came in, he needed $8 billion to bridge the creditors' deficit, and there aren't many corporations with $8 billion to spare.
Once clients feel protected, they will continue to leave their assets on the exchange, according to one idea.
Kevin OLeary, a world-renowned hedge fund manager, says not all investors will walk through the open gate once the company is safe, therefore the $8 Billion wasn't needed immediately.
SBF claims the bankruptcy was his biggest error because he could have accumulated more capital.
Final Reflections
Sam Bankman-Fried, 30, became the world's youngest billionaire in four years.
Never listen to what people say about investing; watch what they do.
SBF is a trader who gets wrecked occasionally.
Ten first-time entrepreneurs ran FTX, screwing each other with no risk management.
It prevents opposing or challenging perspectives and echo chamber highs.
Twitter D.M. conversation with a journalist is the final nail.
He lacks an experienced crew.
This event will surely speed up much-needed regulation.
It's also prompted cryptocurrency exchanges to offer proof of reserves to calm customers.
Jenn Leach
3 years ago
In November, I made an effort to pitch 10 brands per day. Here's what I discovered.
I pitched 10 brands per workday for a total of 200.
How did I do?
It was difficult.
I've never pitched so much.
What did this challenge teach me?
the superiority of quality over quantity
When you need help, outsource
Don't disregard burnout in order to complete a challenge because it exists.
First, pitching brands for brand deals requires quality. Find firms that align with your brand to expose to your audience.
If you associate with any company, you'll lose audience loyalty. I didn't lose sight of that, but I couldn't resist finishing the task.
Outsourcing.
Delegating work to teammates is effective.
I wish I'd done it.
Three people can pitch 200 companies a month significantly faster than one.
One person does research, one to two do outreach, and one to two do follow-up and negotiating.
Simple.
In 2022, I'll outsource everything.
Burnout.
I felt this, so I slowed down at the end of the month.
Thanksgiving week in November was slow.
I was buying and decorating for Christmas. First time putting up outdoor holiday lights was fun.
Much was happening.
I'm not perfect.
I'm being honest.
The Outcomes
Less than 50 brands pitched.
Result: A deal with 3 brands.
I hoped for 4 brands with reaching out to 200 companies, so three with under 50 is wonderful.
That’s a 6% conversion rate!
Whoo-hoo!
I needed 2%.
Here's a screenshot from one of the deals I booked.
These companies fit my company well. Each campaign is different, but I've booked $2,450 in brand work with a couple of pending transactions for December and January.
$2,450 in brand work booked!
How did I do? You tell me.
Is this something you’d try yourself?