Introduction

Today, I would like to share with you my thoughts regarding the different ways SMTs can be bootstrapped, the pros and cons of each option, etc.

Please let me know if I overlooked something. I'll do my best to upvote your comment with a generous % if you are able to add something that I've overlooked in my analysis.

What the whitepaper says...

Shared Bootstrap Tools

SMTs may be created with reward pool parameters tuned for “Shared Influence” between Steem Power and other vesting SMTs, which means a SMT creator may specify that Steem Power can control a portion of the SMT’s rewards pool for an unlimited or limited amount of time, with increasing or decreasing influence. Altogether, Shared Influence may allow SMTs to be wholly or partially bootstrapped by the interest of existing and active Steem or other SMT community members. Through these tools, community managers and entrepreneurs launching a token may leverage existing user bases to accelerate the distribution of the SMT to a target market.

So basically, what it says is that entrepreneurs who launch a coin will be able to decide how much SteemPower or other tokens may influence the distribution of their SMT reward pool.

Different Settings, Different Goals - Distribution is Tricky

When Steemit.com started it had to solve a problem. How do we initially distribute our coins so that a maximum of people are able to curate and affect the reward pool. Witnesses and early adopters like myself, created content and worked hard at upvoting as many people as possible everyday.

But just like any human creative endeavor, we are bound by the power law of 80/20. There is no way around it. Different people can be a part of it at different times but the same distribution remain. This one is the distribution of author rewards in the last 30 days:

No amount of mingling on the algorithm will or can change that fact. What SMTs allow us to do is to potentially have multiple of those curve happening simultaneously. (That's what gets me excited)

Here are the different options that I see for SMTs bootstrapping setup:

Note: Mind you that I'm not able to cover all the different options such as % of reward power or multiple tokens influencing a particular reward pool.

Option 1: Shared Influence On SteemPower Holders Indefinitely

Giving holders of Steempower the power to dictate the curation reward within your community/app/website will be a form of "sharedrop" on Steem users. It is an incentive to the existing user base to join and participate to the project associated with your token.

Doing so also, gives the big holders of STEEM, the similar power in your project than they have on the STEEM token. This can be mitigated by saying: 50% SP / 50% my token or any other combination of shared influence.

PRO: STEEM is constantly being distributed from big holders to smaller holders at this moment. We have more dolphins and big fish than we had 1 year ago in absolute number(although the percentage remain quite stable)

By programming your token that way, it might help you get it distributed faster and more widely than if you were the only one affecting the reward pool.

CON: As I mentioned yesterday in this post, by not creating an independent reward pool, we reproduce the same hierarchy of power that we have on steemit.com. That doesnt mean that the same people will be receiving the author reward but nonetheless, we won't have competing dominance hierarchy.

There is also the issue of self-voting or autovote on your own suckpuppet account.

Option 2: Shared Influence On SteemPower Holders For A Limited Time

This second option is interesting. It gives for a limited time the ability for SteemPower holders to affect the reward pool of the app/community.

PRO: This might create some Fear Of Missing Out on the part of SP Holders. It could be used in the same way as a "Free Trial", sending the message of people to test it out and see if they like it...without giving SP holders a free lunch forever.

CON: The incentives to cheat the system (self vote, suck puppet self-vote, etc.) remains on the part of the current big holders but it is mitigated by the limited time offered.

Option 3: No Shared Influence On SteemPower Holders

To be honest, this is my favorite but also probably the most difficult to implement. Other methods of early distribution will be necessary in order to compensate.

PRO: It's a new dawn and a new day! None of the existing power hierarchy will affect the reward pool and a new one will take it's place.

CON: So you and your team are the only one with all the tokens. You are the only one who can affect the reward pool. What now? Well, you better get your legal in place and start an ICO because otherwise, you might not be able to get your app/community off the ground.

In this particular case, I don't see any other way than starting an ICO. You need your token to be in the hands of as many people as possible. ICOs, apart from shared influence, are a great way to do that. It's also a superb marketing tactic to get people excited, create a price for your token, etc.

Conclusion

Please let me know if I overlooked something about Pro and Cons. I'll do my best to upvote that kind of comment with a generous %.