Every profile allows the creator to keep a certain percentage of the coins that are created as a
“founder reward.” For example, if someone sets their founder reward percentage to 10% and
then someone bought 100 BitClout of their coin, then 10 BitClout would be used to buy the
creator’s coin, and those coins would go to the creator’s wallet rather than the purchaser’s.
Importantly, the founder reward is only paid on “net buys” of their coin. So, if someone were to
buy 100 BitClout of the coin, sell, and then buy again, the creator would only have 10 BitClout
of their own coin at the end. Thus the creator can own 10% of the total supply simply by
setting their founder reward to 10% while being aligned with increasing the net buys of their
The above being said, we think the better way for creators to own a piece of the upside of
their coin is simply to buy their coin up-front when they create their profile, and then set their
founder reward percentage to zero. This works because the coins are cheapest at the
beginning of the curve, and it has the upshot of reducing friction on subsequent purchases of
their coin. Nevertheless, the founder reward percentage being 10% is a “sane default” that
guarantees creators will maintain a certain percentage of their coin even if they do nothing.
Continue : The Power of Decentralization
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