let's start with a real-life example, A Person wants to sell his 100 trading cards each for 10 dollars in a day, now he is observing three different people-

1. People who are desperate about trading cards urgently are willing to pay much more money(>>10$)

2. People who do need trading cards urgently are willing to pay Lil bit more money(>10$)

3. People who do need trading cards not urgently are willing to pay less money(<10$)

Now, he is confused to judge the price.. if he sells at mid-price then still it is not that much efficient and not enough democratic. In this article , I am just trying to explain my thoughts on how to solve this. The same thing happens in initial asset offerings in crypto. There are many ways to conduct an initial asset(NFT+coin) offering and but I think they are not enough democratic, and tier-based and one must win gas wars to buy the asset first.

let's call this model the “Free price model”.

Free price model- Each token sale participant bids some price for some number of tokens in a certain time interval. . The tokens will be allocated in descending order to bidders and claiming tokens is faster for people who bidded at higher prices. Sometimes lower bids cannot get the opportunity to get an allocation, so those bids are called unsuccessful auction bids and the remaining bids are successful auction bids. The Price is decided by token sale participants i.e free market, but not by the team or any central organisation.

Price is the average price of total successful auction bid’s prices per one token.

Price of the token = (x1*p1+x2*p2 ……….. xn*pn)/X

where X = total supply of tokens available in token sale , x1 = tokens bidded by participant-1, p1 = price bidded by participant-1, xn= tokens bidded by participant-n , and pn = price bidded by participant-n

Example -token sale — 100 tokens ,five people each bidded 10,20,30,20,40 tokens for prices 1,2,4,4,5 dollars in time period of 1 day.

Now, tokens will be allocated first to top bidders and lastly to lower bidders in an order. Price = (5*40 + 4*20+4*30+2*10)/100 = 4.2 dollars per token.Here unsuccessful bids made are from the first person and second person’s half bid. 5th person can claim tokens at 1 : 0 clock and then 4th and 3rd at 2:0 clock … So ….on … This stops price manipulations.

Pros --

• Can decrease gas fees ( especially while minting NFTs)

• More Democratic

• Can decrease price manipulations

Cons -

• less control to team, more control to the free market.

• please tell more

Sometimes, this can create a very big problem for VC-funded projects because sometimes participants can buy assets for cheaper prices than VCs.

So, let's add two price limits “Pmin” and “Pmax” and now participants must bid within limits.

but the Fairest token sales happen only when there are no limits.

MORE — This can be applied to ISO’s also.

IF THIS POST APPEARs STUPID/HAS ERRORS, FEEL FREE TO SAY IN COMMENTS.

Disclaimer: This post reflects the current thoughts of the author. It does not constitute investment advice or a recommendation or a solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision.

let's start with a real-life example, A Person wants to sell his 100 trading cards each for 10 dollars in a day, now he is observing three different people-

1. People who are desperate about trading cards urgently are willing to pay much more money(>>10$)

2. People who do need trading cards urgently are willing to pay Lil bit more money(>10$)

3. People who do need trading cards not urgently are willing to pay less money(<10$)

Now, he is confused to judge the price.. if he sells at mid-price then still it is not that much efficient and not enough democratic. In this article , I am just trying to explain my thoughts on how to solve this. The same thing happens in initial asset offerings in crypto. There are many ways to conduct an initial asset(NFT+coin) offering and but I think they are not enough democratic, and tier-based and one must win gas wars to buy the asset first.

let's call this model the “Free price model”.

Free price model- Each token sale participant bids some price for some number of tokens in a certain time interval. . The tokens will be allocated in descending order to bidders and claiming tokens is faster for people who bidded at higher prices. Sometimes lower bids cannot get the opportunity to get an allocation, so those bids are called unsuccessful auction bids and the remaining bids are successful auction bids. The Price is decided by token sale participants i.e free market, but not by the team or any central organisation.

Price is the average price of total successful auction bid’s prices per one token.

Price of the token = (x1*p1+x2*p2 ……….. xn*pn)/X

where X = total supply of tokens available in token sale , x1 = tokens bidded by participant-1, p1 = price bidded by participant-1, xn= tokens bidded by participant-n , and pn = price bidded by participant-n

Example -token sale — 100 tokens ,five people each bidded 10,20,30,20,40 tokens for prices 1,2,4,4,5 dollars in time period of 1 day.

Now, tokens will be allocated first to top bidders and lastly to lower bidders in an order. Price = (5*40 + 4*20+4*30+2*10)/100 = 4.2 dollars per token.Here unsuccessful bids made are from the first person and second person’s half bid. 5th person can claim tokens at 1 : 0 clock and then 4th and 3rd at 2:0 clock … So ….on … This stops price manipulations.

Pros --

• Can decrease gas fees ( especially while minting NFTs)

• More Democratic

• Can decrease price manipulations

Cons -

• less control to team, more control to the free market.

• please tell more

Sometimes, this can create a very big problem for VC-funded projects because sometimes participants can buy assets for cheaper prices than VCs.

So, let's add two price limits “Pmin” and “Pmax” and now participants must bid within limits.

but the Fairest token sales happen only when there are no limits.

MORE — This can be applied to ISO’s also.

IF THIS POST APPEARs STUPID/HAS ERRORS, FEEL FREE TO SAY IN COMMENTS.

Disclaimer: This post reflects the current thoughts of the author. It does not constitute investment advice or a recommendation or a solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision.