Lockdrop Redenomination Calculation and Concerns

Lockdrop
1

Hello Everyone,

Just to let you know my background, I’m one of the official ambassadors of Plasm Network and I love the project and community and have been around since the 2nd lockdrop.

This issue is not new but I would like to give my perspective because I think this will be a problem in the future if we don’t fix this issue now.

Before I go ahead with the calculations let me just clarify the following:

  1. Yes, PLM is FREE in exchange for locking ETH. But if investors will only get pocket change for the amount of ETH and time they locked their ETH, they are better off doing ICO which I believe most participants of the lockdrop are used to, therefore expecting ICO gains.

  2. The price will be determined by the market. Therefore, I believe it would be premature to do redenomination of the token BEFORE the price has been determined by the market. Since we cannot adjust both PLM and price. I can imagine the remorse of investors who have 100,000 PLM and once redenomination hits, they will only have 100 PLM and if the price reaches $1 per PLM they will have a “buyers remorse” on why redenomination happened since in their mind they should have $100,000 USD and not $100. “I have wasted my ETH, lost time and money, I should have joined other ICOs and made a lot more!” This is especially true for those who locked 1000 days.

Here are some data that I gather based on the Lockdrop Calculator which you can find here:
https://lockdrop.plasmnet.io/#/utils-calculator

The price of ETH is still $381 USD in the calculator this is around the 2nd lockdrop.

Let’s say the investor invested 10 ETH or $3,810 USD, he will get the following PLM based on the days locked. I removed the decimal value to avoid confusion.

30 Days: 40,871 PLM
100 Days: 170,299 PLM
300 Days: 613,079 PLM
1000 Days: 2,724,796 PLM

The team is planning to do a redenomination and moving everything 3 decimal places to the left. If you have 100,000 PLM it will now only be 100 PLM after the redenomination.

The amount of PLM I get after redenomination:

30 Days: 40,871 PLM → 40.871 PLM
100 Days: 170,299 PLM → 170.299 PLM
300 Days: 613,079 PLM → 613.079 PLM
1000 Days: 2,724,796 PLM → 2,724.796 PLM

If the price of PLM goes to $1 the investors who locked 10 ETH or $3,810 USD will only get the following:

30 Days: 40,871 PLM → 40.871 PLM → $40.871 USD
100 Days: 170,299 PLM → 170.299 PLM → $170.299 USD
300 Days: 613,079 PLM → 613.079 PLM → $613.079 USD
1000 Days: 2,724,796 PLM → 2,724.796 PLM → $2,724.796 USD

This is IF the price reaches $1. What if the price is $0.10 or even $0.01?

I think reactions will be worse if they compare it to the current ETH price which is $1,800 USD.

10x to 100x gains are normal in ICOs. Lockdrop participants will only get a maximum of almost 2x if they locked their ETH for 1000 days.

Possible Solution:
Just like other ICOs, we should offer a lot less PLM on the 3rd lockdrop in exchange for DOT to make investors of 1st and 2nd lockdrop participants relevant.

Moving 3 decimal places is a bit too much, maximum of 2 and ideal of 1 would be better.

8 Likes
2

So if i understand your opinion correctly, do you think lockdrop participants can get the following USD if we don’t do redenomination?

30 Days: 40,871 PLM → $40871 USD
100 Days: 170,299 PLM → $170299 USD
300 Days: 613,079 PLM → $613079 USD
1000 Days: 2,724,796 PLM → $2724796 USD

If not, how much USD they can earn if we don’t do redenomination?

2 Likes
3

Yes, Sota. They will get those amount if the value of PLM is $1 and if redenomination did not happen.

4

Do you know that the total market cap of Plasm needs to be more than $40B in this case? (Polkadot is around $30B now)

Our supply will be around 40,000,000,000 without redenomination. Our target price is $1=1PLM after the redenomination because the supply will be 40,000,000 (not fully decided yet).

In your assumption, you are discarding the total supply.

1 Like
5

Yes, that is our main problem. I think moving one decimal place is fine to adjust the total supply? From 40,000,000 to 4,000,000 only.

6

Removing decimals doesn’t make sense. The problem in your opinion is that you are changing Plasm’s total market cap by changing the decimals. But the market cap of Plasm is the same regardless redenomination. DOT won’t be ＄30T or ＄30M through redenomination. (DOT has already proven this at the DOT redenomination)

In addition to that, this number looks good since we should compare lockdrop with staking rather than ICO. The team doesn’t get even 1 cent from the community.

30 Days: 40,871 PLM → 40.871 PLM → $40.871 USD
100 Days: 170,299 PLM → 170.299 PLM → $170.299 USD
300 Days: 613,079 PLM → 613.079 PLM → $613.079 USD
1000 Days: 2,724,796 PLM → 2,724.796 PLM → $2,724.796 USD

In case of DOT, the inflation of DOTs is 10%. If you lock $3,810 USD worth DOTs, your DOTs will be around $4191 if everything goes well. So you can get $381 per a year. If you lock $3,810 USD for a year, you can get more than 613.079 PLM ($613.079 USD). Am I wrong?

1 Like
7

We really can’t compare it to DOT and EURO since both have value already determined by the market but this is not the case with Plasm.

Yes, it is staking but I truly believe people joined thinking it was an ICO and therefore expecting ICO gains.

2 Likes
8

The market cap of Plasm is roughly decided since we can guess our valuation compared with other Polkadot projects.

These guys don’t understand lockdrop. And we don’t change our plan for people who don’t understand our product.

If I understand your opinion correctly, you ask us to decide our valuation much higher (at least more than ×10) at the launch let’s say $400M or $4T. This is very short perspective and not productive. If we do this, I think our chart will be nightmare and the community loses confidence. Only very few people who sell PLM at the launch gain high profits.

3 Likes
10

Participants 1 and 2 of lockdrop receive not only PLM but also SDN tokens, this, as I understand it, is an additional profit. In the ETH blocking conditions, it was written that there is no guaranteed price for PLM with participation. You should have gone to the project where specific numbers are promised, but only this is most likely lies and fraud.

2 Likes
11

I think the main reason why people joined the lockdrop is to get PLM and most especially speculate that their investment will multiply. They did not lock their ETH to stake and get a very small amount in return compared to what they have put in. Again, they can invest their ETH elsewhere and get 10x to 100x gains in a few weeks to months most especially during this bull market. Imagine locking ETH for 1000 days and doing nothing.

If we will compute by today’s ETH price, $1,800 USD. They will probably get way more PLM by buying when it is out in the market than joining the lockdrop and locking their ETH.

Again, they trusted Plasm Network with their ETH (millions of dollars worth) by locking it and expect something in return.

“Redenomination” WITHOUT market price is not only premature but simply reducing the amount of PLM given during the lockdrop.

I think Plasm made a mistake on the 1st and 2nd lockdrop by distributing too many PLM. I believe you didn’t expect people to lock so much ETH etiher.

I will not raise these concerns IF Plasm Network did not change anything, no redenomination, etc. Then we can say to everyone to just accept everything as it is. But that is not the case here.

I’m seeing a HUGE problem ahead with THOUSANDS of people complaining. If we are tired of talking to people today, how much more when it is out in the market.

4 Likes
12

I think you don’t understand redenomination well. And I said that the market cap of Plasm Network was roughly decided already. We are okay to launch Plasm Network without redenomination. But do you know that the price of PLM will be less than $0.0001 in this case?

I am saying this again and again, but the total market cap is the same regardless redenomination. Whether we do redenominatio or not, your return will be the same.

Honestly speaking, I don’t understand your opinion because your opinion is mathematically unprovable.

And also, we don’t guarantee any returns to lockdrop participants as @ValensEyelans said.

5 Likes
14

I think while it is impossible to guarantee returns for lockdrop participants it would be nice if the lockdrop participants all received PLM and SDN.

Thankyou for acknowledging all participants, I think the good kama from treating all participants well will be good for the project.

1 Like
15

Can’t understand why this topic created as decision about redenomination already made and topic closed. And I think this decision was correct as price 1 aesthetically is much better than 0.0001 and the redenomination does not affect at all market cap of the PLM.

8 Likes
17

I agree with Sota when he said, you are disregarding the total supply or my belief is you cannot see the overall picture here.

Redenomination does not impact your total $$ worth of plm you have. Example with your own logic:

You believe without the redenomination, plm can be at $1 (I presume at launch, as I believe Sota mentions the target they are aiming for after redenomination is $1).

So, 40 billion tokens worth $1 = $40 billion market cap.
Redenomination takes place - New Token Supply is 40 Million.
Marketcap is still worth $40 billion.
So, 40 Million Tokens are now worth, $1000 per token.

Also, I don’t recall any project which had launched at a $40 billion market cap…

2 Likes
18

Yeah correct.

Price of your 10,000 PLM (without redenomination) = Price of your 10 PLM (after the redenomination)

5 Likes
19

I agree that market cap is market cap however my concern is that we still have many participants who have negative feelings towards the project which is not good. I have seen the term karma mentioned and I think it’s a good point. Good karma equals good overall result.

20

I’ve been following this discussion since yesterday and want to add some of my points in this discussion.

  1. It’s very difficult to talk about a marketcap when there is still no price. We are still not on any market and this will be not in the very near future. We only compare with other projects inside the Polkadot ecosystem who have release a token on the market.

  2. One major reason for doing a redenomination is because of a very successful second lockdrop, this is one of the reasons for this huge token supply. If the second lockdrop was like the first, there wouldn’t be any need of a redenomination.

  3. It’s important to educate our community about lockdrops and we will do this during our second Crowdcast. The past already showed that even if we educate still some % can cause some fuzz in the community. But comparing a lockdrop with an ICO’s is completely wrong.

It’s important to have a long-term mindset but I’m aware a lot of our investors during the second lockdrop jumped in because of hype or FOMO, but this is something we can’t control. Emotions can’t be controlled and therefore very important to guide those who thought differently.

I don’t see any negative impact of a redenomination and for me, everything will stay the same except it will look different in the case of decimals but the value of 1PLM will be the same for me. Currently, I’m not thinking in $ because the market will give that to PLM & SDN.

6 Likes
21

You are absolutely right
I think the redénomination 1/1000 has become almost vital for Plasm

22

Hi!

i am confused with the redenomination timeline.

May i ask if the redomination of plasm will happens before or after dot lockdrop?

If it is after;
Will like to know during the process of dot lockdrop if we will be shown the actual amount we will getting after redomination?

If redenomination is after 3rd lockdrop fully completes.

Does it means if the lockdrop is too overwhelming “eg 30x more than all previous lockdrop; We may need a higher redenomination to bring the total supply down?

i know the value will not change regardless of redomination but will like to manage my expectations of quantity of plm in return for number of dot.

23

Hi

Redenomination will happen before the 3rd lockdrop :-).

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