Nash Tables, Game Theory, Projections for Cowboy.Finance

As I mentioned in this article on Cowboy.finance the other day, they have a very interesting value proposition.

As Cowboy.Finance’s tokensale screams on, and presale actually sold out!

Cowboy.Finance Presale

With transactions as high as 50 Ether, it seems some of you will be rearing COWs sooner rather than later :)

The project built on some lessons from YAM, Tokens of Babel, and Antiample.

Antiample burns tokens for the sake of burning tokens (scarcity much?), and Tokens of Babel (also by Bill Drummond — get it?) burns them if the price is a new All-Time High.

What’s more is that, in COWs, your herd may well ‘breed’ in a given timeframe — this is when people that have not sold their COWs within said time might magically have more, proportionate to their tokenshare, should they be chosen at random. Every day, 10% of tokenholders that aren’t dev get a massive boost in their COW holdings.

Now, let’s take a look at the mechanics. Those holding COWs

1. will have 1% stolen from them / day for the first two weeks by Bandits
2. might get an amount of extra COWs relative to their stakesize out of the Breeding pool (50%! of the entire token supply! and 50%! of that! within the first 30 days, an equal amount each day…)
3. After two weeks, Bandits will run off with the COWs only if COWs are getting a high price at market — that is to say, if a new ATH is recorded.
4. After the first 30 days, the rewards for holding your COWs is reduced by half, and then halvenings occur every 30 days.

Those selling COWs in the given timeperiod

1. Will see their token supply diminish by Bandits
2. Will not qualify for Breeding %
3. However, they’ll make some $

Let’s make a Nash table, and praise be to schizophrenia, right?

You have two decisions: those that hodl (and breed) vs those that sell (profit).

Now before two weeks to a month, it’s rather boring because everyone (other than the flippers…. ) would definitely choose to hodl. 25% of the entire token supply is given out to people at random luck of the draw for hodling.

After 2wks-1month, if I hodl and you hodl:

1. we both have a 10% chance to maybe get more COWs from breeding. This is 10% probability/day.
2. IF THE PRICE HAS GONE UP, say because people want to be part of breeding buy some and those that hodl and want breeding haven’t sold:
   a. there’s 1% of our tokensupply burned therein making the COWs worth more (out of total supply)
   b. the price has gone up, which is good, right?
   c. we haven’t realized any gains.
   d. hodlers win 3/4 points, sellers win 1/4 points.
3. IF THE PRICE GOES DOWN, cuz maybe flippers be flippin:
   a. no burn
   b. price down! Bad!
   c. still haven’t realized gains
   d. hodlers win 1/4 points, sellers win 1/4 points
4. Anyways, since everyone is hodling or acquiring, price goes… up! 3 points!

However, if I hodl and you sell, or vica versa:

1. If price up, hodlers might breed but sellers have cold hard cash — and everyone loses 1% a day.
2. If price down, hodlers might brreed but their tokens are absolutely worth less than they were. Sellers have cash.
3. If we’re both buying and selling relatively equal, price remains neutral! We can assume no new ATH, no 1% burn, holders breeding and sellers making $.
4. Hodlers might breed, 1 point. Might lose 1%, 1 point. sellers get cash, 1 point.

Now, if everyone sells:

1. Price goes down
2. No burn
3. Nobody breeds
4. Everyone loses, but everyone has cash money. 1 point.

Now, if you believe in this stuff, the Nash optimal solution is,… hodl and hodl! Everyone hodls! Everyone wins!

But, I can’t possibly know what the other parties will do. I can assume some would sell.

But, even if they sell, I’m still winning.. . which means my optimal choice here is to hodl no matter what rumors or nonsense exist, no matter how I’m pressured, I win just by not selling.

Does everyone else see the genius here?

But wait! Isn’t a Nash table and game theory supposed to have negative consequences?

Shouldn’t there be losers?

Not in this case, young padawan! Everyone wins! When I do cash out of my COWs, it’s because I think that straight cold hard crypto is worth more than COWs.

Everyone wins.