In the early days of Bitcoin, coins were distributed via faucets. We don’t see faucets in early times of new cryptocurrency projects these days anymore. I think it’s because the cats out of the bag at this point when it comes to the question of whether digital currencies can have value or not. However, I’d argue that an equal distribution of coins leads to a stronger currency. So what community effort can we create to encourage wides spread currency distribution? Should we start a community run faucet with some sort of measure in place to prevent abuse?
What measures could prevent abuse, i.e. one person cleverly draining the faucet?
How about introducing a cost to using the faucet?
Say, paying a dollar to drain 1 Grin from the faucet?
Then we could be sure that only people genuinely interested in Grin would use it…
If that were the case wouldn’t it just make sense to buy the GRIN on an exchange?
Exactly. My tongue-in-cheek reply was trying to point out that faucets are an inherently bad idea for coins of established value.
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I think that Grin had a great first year for ensuring fair distribution of coins.
$1/coin seems like a fair price to me to allow people to begin experimenting with Grin, but not so cheap to reward hoarding. There is still much uncertainty about whether this kind of emission model can succeed.
The misconceptions about Grin–erroneous conflation of emission & inflation, the idea that value accrual requires finite emission […]–have been circulated enough to keep the get-rich-quick crowd out of the stables. Personally I’m hoping for a situation in which Grin is used like instant messenger cash, with extremely high velocity, and the price growing very slowly over time. That way, users are encouraged to pay each other in Grin because they know that it’ll be roughly the same value when the person receives it and converts it back into their preferred currency.
(Edit) Is something like $DAI possible in the Grin ecosystem?
One idea could be to limit the faucet output over time (x amount per minute), randomly select recipient on the event of output, and require participants to provide a proof-of-work or run a verifiable delay function to limit entries. The difference between this and mining is the cost for the PoW/VDF should be greater than the reward comparatively to mining on-chain. The whole point is to not make the faucet a business endeavor, but rather a means wider participation in the distribution of the coin.