In the short term, burning or send to DAO have the same effect
The MANA is effectively taken out of the market (DAO funds can be considered as “out of the market” because it’s hard to coordinate how to take it out).
In the long term, it’s better to have flexibility to increase the supply
Having a permanent drop in supply prevents the possibility to increase the circulating supply in the future, and inflation could be beneficial in the future.
In my opinion people that want to have a NAME should be able to get a NAME. I agree with what @cazala said: usernames should be free (as is the case in twitter or instagram), but in this blockchain context, some anti-spam measure is needed.
Genuinely answering: IMHO growing the DAO funds in this context is secondary to user happiness.
I think the outcome of this proposal doesn’t clarify the price of NAMEs. Subsequent proposals should. I’m not really convinced whether a NAME should be $10, $40, or $100. There are good arguments for each price level.
The cheaper a NAME is, the more likely new users can get a NAME
The added value from worlds probably allows for a higher price (and maybe also demands it because of hosting costs)
I think that before we get there we should have a healthy and working economy that rewards content creators for the awesome things they’re building in our virtual world. I’d like to ensure we have that first.
I am not sure I follow your line of thought. Could you share some bibliography or references about the economic theory behind your thinking?
I am not sure which authorities this idea appeals to. However, when you create a fiat currency, in order for it to continue working or have value, it must be backed by commodities, goods, services, debt contracts or other things. Without that, the currency is worthless.
So let’s put a microscope on MANA right now: MANA backed by:
In-world purchases (Not many currently)
The pegs were removed for:
Name minting (now removed)
If we want to stabilize a currency, is the idea to make it used for as many things as possible and then using price discovery of that currency to find the current value of goods and services. Current value of goods and services can be found because there is a Total amount of MANA tokens, so value can be found. Now that we removed one more good from being pegged to MANA, you weakened the currency of MANA even more. Why hold MANA if everything is in USD prices?
As a user, I need MANA to purchase wearables or emotes, well with so little things to purchase MANA with, why speculate on it, I might as well keep USDC and then convert it, but that’s really not optimal for the consumer. However, when you have a whole entire Decentraland that revolves around using MANA and everything is in MANA prices, I would think most people would purchase MANA for speculation that it is going to increase in value (and in the beginning of it’s life, it will - as long as we continue content creating in DCL). When MANA is used for more and more things over time, it becomes it’s own currency.
May I ask you why MANA was created in the first place? If we feel so inclined to use DAI or USD, why should I take an extra step to convert it to MANA? Doesn’t sound to optimal to me?
Dear Tudamoon, please quote some reference bibliography to back these statements so I can read more about this, so that I can understand the principles behind your opinions, which seem pretty strong. In my opinion, you’re conflating different behaviors of MANA, and focusing on the negative consequences of “not using MANA as a unit of account”, which is not a fundamental driver of MANA in its infancy (Bitcoin is still impossible to use as a unit of account, and it’s a lot larger). MANA is a medium of exchange (check out https://market.decentraland.org where people buy and sell goods in exchange for MANA). It’s useful to have prices fluctuate according to the market realities, economists love to talk about variations on things like “P” and “Q”
@Esteban Why did you create MANA if we are going to base everything on USD prices?
Can you share how this “optimizes” the user experience?
After this proposal enactment, to buy DCL Name, I must now:
USD → MANA (Equitable value of USD) → DCL Name
Prior to this proposal enactment, I would:
hold MANA → DCL Name
People would exchange USDC for MANA and hold it because 100 MANA would get you a name, but now since 100 MANA doesn’t get you a name, why would I buy MANA, until I actually need it since it is based on USD amounts?
We are pegging DCL Names to a certain USD price instead of a certain MANA price, correct?
I am not understanding why we would do that if the goal is to allow MANA to be an independent currency of Decentraland.
MANA needs to be pegged to things so it can determine it’s own value, outside of the USD. Otherwise when the fiat USD fails, so does everything it is pegged to.
If we keep the minting of names to 100 MANA, it leaves a benchmark on how much 100 MANA should ideally cost through comparative price analysis. Ideally since there is a total supply of MANA, by pegging things to it, it allows those items to be valued in MANA independently of government run fiat currencies.
This is more long-term thinking than this solution proposed.
Dont think it would be retro Peng fren. Think it would just be going forward a dollar amount would still have to be set and voted on. On the plus side the mana would go to fund new ventures. They are currently restructuring the grants tiers and all that. Plus side all those names now have a world associated to them so $$$. Not sure who that 4mil vp wallet it but was interesting see it last minute cap it off. I think this will have more positives in the long run we just have to watch same things we been watching. Only down side i see to this is when we were burning mana that was less mana to be sold or swapped for stables that these grants have been using to pay bills and keep developing. Instead of us burning the mana it will now be stored in contracts and sold in further increments.
Id say the community made it clear they didnt want this. The whales voted this through. You know it and I know it but what we gonna do about it ya know? In the end tho guess all we can do is work with it and make do to try to make it be benefitial.