On Nov. 8th, 2021, Status was allocated ENS tokens as a thank you for the early integration of their naming system into the Status ecosystem. For those that are unaware, our built-in (SNT purchased) naming system leverages ENS, and registers a subdomain of
stateofus.eth for unique and searchable naming purposes. A user can also import any ENS name as well. For more details, a full write-up around the feature and its economics can be found here (TODO: the interactive portion of this article needs to be fixed) and you can see the analytics of the history of its use on our public dashboard.
Here are some of the relevant details to this proposal:
- airdropped tokens: 46,296.3 ENS (~3.7 MM USD @79.85 USD/ENS)
- registered ENS usernames: 5,009
- unique username accounts: 1,927
- ENS snapshot date: October 31st, 2021
- note: no new ENS username registrations since this snapshot
The public ENS airdrop distributed 25% of the 100 million ENS tokens (25 MM) to on-chain ENS users. You can read more about the entire distribution in their announcement article. I am also in the process of performing some deeper analysis of distribution, particularly around how the other sections compare to the airdrop, and overall “fairness.” I will update this post when it is published.
Cursory analysis shows that we as Status hold a very large amount of ENS when compared to the average ENS user that received tokens from the airdrop. The following table shows the distribution of ENS tokens broken up into buckets of “exponential group,” that is people with < 1 ENS, then < 10, …, until you get <= 10,000 ENS tokens.
|exponential group||group size (%)||airdrop token amount (%)||total token amount (%)|
(Data source: airdrop.json)
Note that the maximum an account received from the public airdrop from owning ENS names is
1143.54 ENS. This means the last bucket is only a few folks when compared to everyone that is eligible to claim tokens. The mean airdrop amount was
Our token allocation is ~46x the maximum any single account received from the public airdrop, and ~254x the mean.
Since the metrics of who was eligible for the airdrop did not include subdomains of the 2LDs registered on ENS, none of our ENS username registrants under
stateofus.eth are eligible for claiming ENS tokens. An argument can be made that we should in some way distribute our allocation to those who created and used the system for the following reasons:
- The developers of features that incentive use the use of SNT should be rewarded commensurate to the growth of the feature. This is a fundamental idea behind development and reward in Web3.
- The users of an incentivized feature (particularly early and earnest ones) should be rewarded for their contribution and engagement.
- As ENS is primarily a public good, the distribution of its governance token should be maximally distributed across its users, thus our oversized allocation as an organization should not be wielded by only a few individuals.
- ENS usernames in Status are fully owned by their registrants while their SNT is locked up in the smart contract. It can be argued that the allocation does not fully belong to the Status organization, but also to those that have used the username feature, as the airdrop did not include subdomain accounts. That argument is hinged upon whether not the ENS team feels it is the responsibility of the feature implementer to equally handle that distribution, as all subdomain use across ENS is not equal and outside the scope of the ENS team to decide.
This post is around exploring the various options we have in what we should do with these tokens.
As per the ENS announcement, it stands to reason that our token allocation is for our early and substantial integration into their service. Thusly, it is a desire from them that we wield these tokens to help govern the system’s future.
Our allocation accounts for
46,296.3 / 1e8 * 100 = 0.0462% of the total supply. If we look at just the circulating supply of the system (half of that), it’s
Status currently holds a few “governance tokens” like this, and we are currently working on a proposal to setup a proper process and multisignature wallet around deciding how these tokens are tracked, used, and managed within the organization. One of our own, Simona Pop is an active participant in these ecosystems, and our token allocations allow us to boost her relative weight in their governance processes which helps us carry weight within the development of the systems we care about in the broader community. We are not building Web3 alone, and an argument can be made that having weight in the broader ecosystem is in the greater good of Status.
Looking at the ENS Usernames Swarm Repo, we can see the primary individuals involved with delivering this feature. There are clearly others that had some involvement but this is just what I can find that is recorded. How the distribution would occur across those involved isn’t obvious as the workload wasn’t equally distributed. If this is something that we choose to go with, then those involved will need to weigh in with their opinions on developer distribution.
This option helps establish a precedent of enabling those that develop a feature within the ecosystem of Status to benefit from its growth and use. After all, in the end, we want people to build on Status, and this ENS allocation is arguably a direct “thank you” for that development.
If we evenly distribute ENS across ENS username account holders, we arrive at:
46296 ENS / 1927 accounts = 24 ENS/account
which at current prices equals ~$1,922 USD per account with an ENS username.
This will be slightly driven down by the fact that we have to develop and deploy a secure method for users to claim their “share.” This cost Status resources, and it will require fees to deploy whatever smart contract involved
I think it stands to reason that distributing per registered username is a faulty way of doing it, both from a fairness and economic perspective.
Here are some tasks that will have to be performed if this option is chosen:
- Smart contract development for users to claim whatever is decided around their distribution
- front-end development around interacting with this smart contract, whether stand-alone application, or integration into the Status clients
- marketing/messaging/tutorials on how all of this is happening, and how to do it
We should add here some additional cost/resource analysis of this over time.
There is additional “marketing” and boon to Status here outside of direct financial gain in the ENS token allocation. It broadcasts that our users grow with us, and is an additional message that we stand behind our Web3 principles firmly.
Of course, any mixture of the above can be taken. The problem with mixing is that it weakens the pros of every option to the individuals involved, and strengthens the cons. The more we distribute these tokens, the more in overall value we lose to Ethereum fees and consumed Status resources, which are substantial.
I’m sure there are other options I have missed, add them if you can think of something reasonable.
In my opinion, if some form of redistribution is not taken, then we owe our community a very strong reasoning as to why. My initial thoughts of why these options are unreasonable is the potential development and cost effort of doing them over-shadowing the reward in a way that makes these options obviously infeasible.
I have only outlined a gross view of each of the options and there are no doubt more subtleties involved with each one. But I wanted to get the conversation started, so here we are. It’s started. I can only hope that others who have received similar allocations in the ecosystem are having a similar conversation. If not, I hope this motivates them to do so.
Please comment and add your perspective on this; Correct things you think I’m wrong about. After all, this is a decision that should be made by all of us, not just me or a handful of people. I will work to keep this post updated as discussion continues.