Long Term Focus, Low Time Preference

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January 24, 2022

A giant hole in the ground is pretty much the opposite of a skyscraper. Yet, the first step in building a skyscraper is digging a massive 20-story hole in the ground for the foundations. Large, long term projects require big investments upfront that take time to pay off.  

Sovryn is a very ambitious project. Therefore the choices and investments we make must optimize not for the SOV price tomorrow, or even this bull market. Instead, we must focus on building something that will survive, improve and grow through many cycles.

Sovryn is building the smart contract platform for Bitcoin, possibly the biggest opportunity in the world, right now. Other projects that are attempting something equally ambitious have taken many years to rise to prominence.

  • Ethereum is 8 years old.
  • Cardano is almost 6.
  • Solana, Matic and Avalanche were all founded in the last bull market of 2017.
  • Sovryn is just a year old and has already demonstrated robust growth.

What are the costs of long term focus?

Token Economics

Tokenomics should not be optimized for a short term supply squeeze. Many projects today are attracting attention and capital with very rapid and aggressive token distribution schemes - that are paired with incentives to stake the token so that it is not sold on the market.

This type of stimulus is very effective in the short term, but is unsustainable longer term and can leave a project without rewards and incentives for the future. Short term stimulus with instant gratification like liquidity mining and airdrops can attract the wrong type of users - with no real interest in the project.

SOV distribution is an important strategic tool that should see continued innovation over the course of 2022. Some of the options being explored:

  • Protocol Owned Liquidity
  • Partial instant Liquidity Mining rewards
  • Community (subDAO) managed SOV pools
  • Multi-token rewards


Sovryn invested much more time and effort than most young projects in building decentralized protocol governance from day 0.

This comes at a price in two ways:

  1. Decentralized communities are more confusing and controversial. Despite what people expect, decentralized communities often feel less transparent than centralized ones. A centralized organization can hide dilemmas and speak with one, authoritative voice. Decentralized communities can be more chaotic and people are more exposed to this internal "chaos". It reminds one of the old saying "If you want to eat sausages, never visit a sausage factory."
  2. Building in a decentralized manner adds significant development, security and management overhead. This pulls resources away from simply building features. It also reduces the speed of decision making, since the whole community is involved.

Token Allocation

Similar to how start-ups award equity to early stakeholders, DAOs often award tokens as a governance tool and as a long-term incentive for talent. In Sovryn, founding and early team members should have significant influence and upside, that vests over time. This is due to a simple observation - projects, nations and companies do best when they are founder led. The core team are the highly knowledgeable and motivated stewards of the original vision and are crucial to nurturing the project in its early stages.

Real Collaborations, Not Announcements

A common tactic in the crypto space has been making ‘big partnership announcements’ that have little or no real substance. Not only is this misleading and destructive to credibility, it also distracts the team and community from what's real and makes them start to value the fake.

Big announcements are an important tool and sometimes they need to come in advance and in anticipation of collaborations and integrations that can take time to play out. However, the focus should always be on the end goal, not on being able to make the announcement for announcement’s sake.

Bold Bets

Sovryn must be willing to experiment with unconventional and even unpopular initiatives, that might be costly in the short term but have potentially big payoffs longer term.

An example of this is the SOV-bonded subprotocols. This was a controversial idea, because the initial reaction was that this was both confusing and dilutive to the value of SOV.

However, the potential benefits include:

  1. New ways of attracting talent to build in the Sovryn ecosystem
  2. New use cases for SOV
  3. Governance scalability

Each of these has potentially massive upside.

Investing Must be Long-Term

What is an investment? It is a cost incurred today in order to build something that will be more valuable in the future. Sovryn is poised at the very beginning of a massive market opportunity - building an entire economy on Bitcoin.

When Jeff Bezos was faced with a massive opportunity - building ecommerce - he famously chose to avoid short term rewards and profits in order to keep reinvesting with the sole purpose of capturing as much of the opportunity as possible. I believe the Sovryn community should do likewise.

In the early days of a project, long-term focus can make the project look unattractive - "why is there no 'pop'?". However, a 'pop' is also what happens when a bubble bursts. For a project and community focused on real and sustainable value creation, speculating on the short term is a distraction.  

Building the smart contract layer for Bitcoin might be the single biggest opportunity in the world right now. Let's treat it with the respect it deserves.

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