💲Pricing
An explanation on stake pricing 🔑 💰
The Problems with Exponential Pricing
Exponential pricing, as its name suggests, involves prices that increase rapidly, based on a constant rate of growth. While this may sound appealing in theory, especially in terms of revenue generation, it comes with notable downsides in community building:
Barrier to Entry: As prices skyrocket, it becomes increasingly difficult for new members to join the community.
Unsustainable Growth: Exponential growth is unsustainable in the long term, often leading to 'bubbles' that can suddenly burst.
Mismatch with Reality: Exponential models don't capture the nuanced dynamics of how real-world groups form, grow, and stabilize.
Groop's Solution
1. Sigmoid Function (S curve)
The Sigmoid function, or the S curve, mimics the growth patterns seen in nature, especially in populations of organisms. This curve starts slow, accelerates as resources are abundant, and then slows again as the system approaches its carrying capacity.
Why the Sigmoid Curve?
Realistic Representation: Logistic growth, captured by the Sigmoid curve, mirrors the way populations grow. Think of it like a new species introduced to an environment: growth starts slow, rapidly increases as the species adapts, and then levels off as the environment reaches its capacity to support the population.
Balanced Growth: The curve ensures a balanced approach to community building. Early adopters are incentivized with lower prices and rapid growth, but as the community matures, the growth rate decreases, ensuring stability and preventing a bubble-like {ponzi} scenario.
Sustainability: The S curve respects the natural ‘carrying capacity’ of a community, preventing over-saturation and ensuring a healthy, engaged member base.
2. Adjustment Tools
Owners have the flexibility to customize their community's growth dynamics:
Entry Stake Number: Decide how many stakes a new member needs to own to gain access. The default setting is 100 stakes, but this can be adjusted to control the exclusivity or accessibility of your community.
Biological Roots of Logistic Growth Curves
We can best undertsand the importance of the logistic growth curve by learning lessons in nature, biology, and the history of the world as it pertains to population growth.
In nature, no population grows exponentially indefinitely. Environmental factors, food availability, or space limitations eventually slow down growth. This biological phenomenon is reflected in the pricing of Groop stakes. By harnessing the lessons of biology, we use logistic growth to ensure that online communities flourish in a sustainable manner, much like balanced ecosystems in nature.
Mirroring Group Dynamics in a Digital World
Just as in biology, online communities have a natural ebb and flow. The early stages see enthusiastic pioneers shaping the group's direction. As the community gains popularity, more members join, but as it nears its 'carrying capacity,' growth must slow to ensure the quality of interactions and the overall health of the community.
How It Works
Accelerating Growth at First: At the onset, as pioneers and early adopters shape the community, growth is rapid and prices are low, enticing new members.
Slows Down: As the group evolves and matures, the rate of growth and the associated cost of stakes increase at a decelerating rate, ensuring sustainability.
Carrying Capacity: Just as an environment has a limit to how many individuals of a species it can support, an online community has a practical limit to how many active, engaged members it can sustain. Groop's stake pricing model recognizes and respects this limit, ensuring long-term community health.
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