$Armor:$Ease Token Swap: Using a 1:1 vs a 1:10 Token Ratio

As the Ease community knows, the $ease token will replace the $Armor token and will be the last part of the rebranding process.

The team has thought about how many $ease tokens we should mint, which will also determine the swap ratio of $Armor → $ease.

When the $Armor token was launched, in January 2021, a Billion (1,000,000,000) were minted. The most straightforward would therefore be to mint 1 Billion $ease as well and swap 1:1.

However, for a few reasons the team proposes a different token amount and swap ratio: 10 Billion $ease, which would mean a swap ratio of 1 $Armor → 10 $Ease (so the % stay the same for all token holders, i.e. 1% of $Armor tokens → 1% of $ease tokens).

For:

1> As Uninsurance was a major departure from traditional coverage models, the team feels that it’s important that we break away from the same mould, and do not mint the exact same amount of tokens.

2> As $ease will have more utility, we expect more demand and Crypto investors are prone to Unit Bias. Unit bias is the fact that lower priced assets seem to be valued higher than an equivalent fraction of a higher priced one. Many investors check the price of one Unit.

For example: many crypto investors flocked to Shiba and Doge “as they were cheaper than BTC and ETH”!

Economically this doesn’t make sense, as $100 worth of $Doge is worth exactly the same as $100 worth of BTC, but still 1168 Doge sounds a lot more than 0.004174518 BTC…

4> Looking beyond meme coins, which are typically in the trillions. There are multiple tokens with over a billion supply. Some big tokens with 5-40B supply: celr, cardano, stellar, cronos, hedera, zilliqa, matic, the graph, algorand. I think you only get into shitcoin territory with 1T+ supply.

Against:

1> Armor is already trading around <= 1 cent USD. If a 1:10 swap ratio occurs the $EASE token will initially trade around 1/10 of a cent. This value starts to become intangible, and could also impact the view of our token as being legitimate or having utility.

2> How much does unit bias affect a token that is already very affordable? People bought Dodge over BTC sure, but BTC was 30k+ USD. Armor is already trading at a price point similar to DOGE, and already of an equivalent price interest to a user who would buy a DOGE over BTC.

3> Should a protocol that is meant to be advertising "safety, risk mitigation, security" adopt tokenomic strategies of a "degen" product like DOGE?

Its important to remember 1 USD worth of $Armor will have the same value as 1 USD worth of $ease, irrespective of the swap rate. For example, if the proposed 10 billion $ease are minted, every $Armor will get swapped for 10 $ease as the $ease supply will be 10 times larger.

If you wish to contribute further to the discussion see the forum link on the proposal.