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In Brave’s case, the risk might be that the billion tokens it issued are treated like long-term investments, hoarded by investors who withhold them from circulation. In that case, the BATs’ value won’t accurately reflect the market for user attention. A critical mass of use, not holding, is needed. Brave’s model included a token-issuance strategy for dealing with that challenge. It set aside a 300 million–strong “user growth pool” to attract new users. There’s a plan, for example, to deliver a small amount of BATs to the integrated Brave wallet whenever there’s a unique new download of the browser. In this way, the token is designed as a tool to bootstrap adoption, to foster network effects. “Early on we saw this as something that would allow us to stake users with initial grants,” says Brave CEO Brendan Eich. The strategy was shaped by Eich’s decades in Silicon Valley, where the veteran engineer created the ubiquitous Web programming language JavaScript in the nineties and later went on to co-found browser developer Mozilla. Over time, he realized that venture capitalists were reluctant to fund the marketing cost of acquiring users and that tapping new equity or debt to do so was dilutive to the founders’ and early investors’ ownership stakes. “But with a token, it can be disbursed to users without credit consequences,” he adds, arguing that by contrast to a dollar’s worth of equity or debt, “the BAT is a social credit currency; it doesn’t have this inflationary property.
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Michael J. Casey (The Truth Machine: The Blockchain and the Future of Everything)