Current situation

Currently, r/EthTrader distributes 850,000 DONUT per round to users based on their points, with multipliers applied. There's no cap on how many DONUT a single user can earn, meaning top earners can get a disproportionately large share of the distribution.

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Problem

Some users consistently earn a significant percentage of the total distribution, making the distribution system completely unbalanced. Another issue is overfarming, as users may attempt to maximize earnings through excessive posting and comment farming. Without a cap, future expansions, like integrating distributions in other communities / platforms could be harder to manage fairly.

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Solution

I suggest we implement an earnings cap at 5% of the available distribution supply. This would mean that no one would earn more than 5% of the total DONUT available in a round.

This cap would be based on the available distribution supply and not the total points earned ("karma"), so it would be simpler to implement and maintain.

Example: If the distribution supply is 850,000 DONUT (current supply), the max a single user can earn is 42,500 DONUT.

Only a very small number of users would be negatively affected by this proposal. If we analyze the previous round's data, only precisely 3 users currently exceed this threshold, that's around 0.048% of all registered users.

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Advantages

• The biggest advantage is preventing overfarming, we would be limiting the incentive for users to exploit the ecosystem.

• Balanced distributions. With this proposal, there would be a fairer allocation of DONUT among registered users.

• This also improves fund management.

• Encouraging broader participation. Smaller / less active users would be able to earn more.

• This proposal also prepares the Donut ecosystem for future expansion. We would be establishing a scalable system for potential distributions in other communities.

Disadvantages

• Farmers may attempt to bypass the cap using alt accounts. However, we now have tools to detect alts, and with Reddit’s help, usually they get an instant shadowban.

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Conclusion

This proposal is a simple, effective, and necessary implementation because it would promote fairness, balance, sustainability, and scalability within the Donut ecosystem. This change would only affect an insignificantly small fraction of users, while improving the balance of the ecosystem.