KOIN Chaos & Explosion

in LeoFinance3 months ago (edited)

So KOIN(OS) has just undergone some crazy stuff

I have been active in the community since its inception in late 2020. There were some incredible ups and downs. The first shock was essentially when in the POW phase of the coin an entity mined aroun 66% of the supply (or 66M tokens). Obviously this is completely unacceptable and it severely undermined the "fair and decentralized launch" claims by the team. That is, if this entity would not have sold around 90-95% of that stake again, which fortunately it did. For a around a year this miner sold millions of ERC20- Koin tokens on the market for around 1-2 cents+. This meant that mining KOIN did not make any sense since due to the ETH fees it would have been much more expensive to mine it oneself than just to buy it on the market. On hindsight this was a mixed blessing, but fortunately it would seem by recent on chain analysis that this entity has now "only" around 2-3M Koin. No doubt that is still a lot, but compared with other chains it is actually not very centralized. Just several days ago I showed how around 4 people on Hive own ~30% of Hive Power...

"Network attack" from the team itself?

Fast forward 3 years and the team and the community feel a bit of a crisis. While the chain has been running successfully for around a year (mainnet launch in late 2022), there is almost no activity on chain. The ecosystem is still very immature having only a couple of dapps. There is also a huge funding problem since the team did not pre mine or acquired a large stake themselves. There is no money for marketing, promotions, CEX listings etc. On Hive we have the DHF (decentralized Hive Fund) which has been truly a blessing for funding projects and dapps on Hive. Creating such a fund on Koinos would be difficult, however. The community was promised a 2% inflation rate (although it was always thought to be somewhat flexible). This meant that KOIN would always be somewhat scarce, especially due to the POB (proof of burn) mechanic which meant that around 40-50% of the supply was always going to get burned. Several months ago the core team decided to launch the Koinos Federation. It was a small group (not elected by the community! = first big red flag) and its first goal was to... introduce a 100% inflation event by instantly adding 100M Koin to the supply (second big red flag). One could even argue that it was relatively speaking even larger than that since only 50% of Koin was claimed...

This caused a huge uproar in the community and in the core dev team itself. Thousands of messages were posted on TG, votes were initiated, etc. The sentiment was clear: the community refused to go through with this by a very marge margin (around 80-90%). Of course this raised several questions: if Koinos was truly decentralized, how could a small group (10-15 people) push through something so outrageous?! Honestly, if it hadn't been for this enormous push back, I fear the initial plans would have been followed through. Surely, this would have been catastrophic for the project since many "threatened" to sell their tokens and it would have put anyone off that was sold on the low supply and low inflation. Additionally, the trust would have been broken: if the network could introduce such a big inflation event, why should it be the last one?

Saved by Cafe...?

The entity who mined around 66% or the initial supply (nicknamed "cafe") suddenly made itself known. It opened a TG channel and announced an announcement. Rumors were afloat: would we get a KOINOS FORK? Would it reveal that they owned a majority of stake 51%? The story was published on medium, but it has been taken offline again. But here is a capture of the article:


Essentially Cafe said that their group would hinder the implementation of this proposal by the fed. It argued that it went against the whole initial design of the project and would destroy it. It was strongly worded and I personally did not know if they actually had enough stake to oppose it. If so, the chain would in my opinion be compromised, since no one should have that power. But it would also be interpreted as a pseudo threat and perhaps tried to channel the strong sentiment of the community against such an implementation. In any way, it was successful!

Just hours after this statement Jon Rice stepped down as CEO of the Federation and announced that this organization would cease to exist - the community had won! To be fair, there were several core devs from the team that also opposed such an "inflation event", but without the strong push back from the community I doubt that things would have unfolded as they did.

After Chaos comes the Explosion!

Just days after this development, price suddenly started to sky rocket! Koin climbed from around 55 cents to $2.3 in a matter of days! Interestingly, I had predicted such a movement 2 months ago...Yo can read the post here. This is the chart from back then:

That was a pretty successful TA... since the chart today looks like this:


What a ride! It's unclear why price suddenly spiked so much (besides the TA indicator). It's clear, however that KOIN/KOINOS has been "trending" on X/Twitter for weeks and especially the last days (even before the spike). Many influencers had picked up on Koin being the "first" fee-less blockchain. Posts about Koin/os received tens and even hundreds of thousands of views... that does eventually make a difference. I always get a bit triggered when reading these posts, since no one apparently knows about HIVE that has been "feeless" (there is always a network cost) for over 3 years...

As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!




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You seem to be very up to date with this ... Now I know who to ask anything related koin :)

Yeah I think I can help you out if uou have any questions ;)

Many influencers had picked up on Koin being the "first" fee-less blockchain. Posts about Koin/os received tens and even hundreds of thousands of views... that does eventually make a difference. I always get a bit triggered when reading these posts, since no one apparently knows about HIVE that has been "feeless" (there is always a network cost) for over 3 years...

I had this question to andarchy on how Koin is different to hive when it comes to fee-less. He did not reply, but their claim of being first is not right. Hive has a much better prospect, a matter of time till we rise.

To my understanding it's a bit subtle. Both networks have the concept of Mana or rcs. One big difference is account creation. On Hive ther3 is a cost for creating an account since data of that account has to be stored on chain (name of account). On koinos the account is simply a wallet address which means that there is not a direct cost of creating an account. Nevertheless that account will need Mana to function just like on Hive. I believe it is also easier to yap into Mana pools on koinos. But this can be adjusted on Hive

Hey. Are you sure about that 66% number?

Yes, it's an accepted figure in the community (definitely over 60%). While nobody knows how much stake they have left it will probably still be at least several million

How close did you observe the initial mine? I was there at the start but quit mining after 3 days once someone started using AWS and mining everything. Is that the guy that holds this much?
Koin was selling for 1-2 cents at the time of the mine. How much would they even have to spend on AWS instances per month to mine out that much.

The group said that they rewrote the miner to make it much more efficient...so they didn'tspend nearly as much as one would think for mining.

They said that publicly? And you still think they hold a large amount?

yes, it was in the post that was taken offline. Nobody really knows how much they hold, some estimate it is around 2M based on what was left before mainnet (but could be higher). I mean if it is around that much, it seems quite okay. It's hard or impossible to find a chain where one entitiy does not hold 1%+ of the supply. HP is is actually quite a bit worse since only 4 people hold around a quarter of it...

Good info to have.

I look at HP in the context of the total Hive circulating supply. I wouldnt say its nearly as bad as that.