ongoing funding through share dilution is the same thing as taxation
This is true in that it taxes the shareholders, but "taxation" has connotations of coercing universal participation within a set of geographic borders. In a DAC participation and buy in should always be voluntary.
Its the same process in this system as it is with any government that imposes taxes or finances operations through debt and inflation. If the majority deem it appropriate they can violate the property rights of the minority. If 51% want to dilute shares why can they not donate the desired funds themselves? Dilution doesn't make any logical sense. Companies dilute stock when a capital expenditure is excessive to the point that it may not even get repaid. DACs don't need VCs to get started and they don't need costly R&D, which are to main scenarios for dilution. If I am an early investor and I see my investment increase by more than 100% do you really think I'm not going to want to donate funds to see my position appreciate more?
This expresses how I feel exactly. I believe the deal should be on the table and shouldn't be changed. If you do the math right and it's actually basic math then you'd set aside around 30% for development. Mastercoin did this, MaidSafe did this, it's essential that developers eat their own dog food and live within the means of the value of the same tokens that everyone else has.
So rather than let developers take from everyone else on the sneak I prefer it be up front. I prefer developers ask for a premine or for a founders fee, percentage or anything like that. I think higher transaction fees are more desirable than dilution because transaction fees as a tax too but at least it's a tax we expect to pay in this kind of business and not a dilution.
This kind of business is high risk. Dilution makes sense when you've got a proven track record of growth. These sorts of businesses we are dealing with aren't promised to grow x10 each year. It's something we expect to happen, and work towards making it happen, but it's not a sure thing.
I like the donation idea and I think if we can provide an incentive for the people who donate such as points which they can trade in for discounts at certain businesses then you'll have the perfect system. Donate to the developers, receive points, these points give you discounts for products and services offered by affiliate DACs and businesses. Perhaps these points also put you on the Sharedrop list.
Since there is no mining there is no such thing as a premine. Instead of dilution just set aside a percentage of the shares for developers just like Mastercoin did. It is working best under the Mastercoin model. The dilution model is speculative and likely will upset investors while not accomplishing any more than the Mastercoin pre-allocation model,
Pre-allocate your shares for development costs in terms of a percentage or raise transaction fees. No dilutions no bullshit.
That is equivalent to dilution... dulution is just preallocation with an honest "total supply" label
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Yep, the preallocation of shares is a dilution. Instead of over a series of time it happens instantly at the beginning. It then removes a lot of incentive for longterm motivation vs the dilution being suggested by some of us.
The difference is preallocation is planned and everyone knows about it before they buy their first share. Everyone knew the plan with Mastercoin for the development tokens. We purchased it knowing exactly how much a Mastercoin is worth and it reflects the real price in the market. There is less volatility because the price discovery happens immediately in the beginning and you don't have all these different mental models.
Also people don't have to keep buying Mastercoins to try to keep their position on the treadmill. The dev Mastercoins are earned through bounties of all kinds and the whole community is able to get involved from testing to documentation (it's not just programmers).
The problem with dilution is there isn't a very strong case that we the community need that dilution. If our shares are worth a lot of money we'd pay for new features. You could crowd fund it or use an innovation game to figure out what new features the community desires and how much they'll pledge.
So I'm not convinced there is a problem here. I know developers are expensive especially if they are highly skilled but I expect and hope that our shares will have enough value that developers will not need the dilution. I guess I'm naturally skeptical of any inflation scheme or tax scheme until it's proven necessary or beneficial.