BAT's quant calls Facebook corporate syphilis, after they tried to poach him

Top row of BAT Team. Eich and Bondy both worked together at Mozilla. Followed by Yan Zhu who worked EFF and has worked at other well known places related to digital privacy.

Then you have Scott Locklin. Worked for himself as co-founder of an algorithmic trading company. He specializes in machine learning, forecasting and quantitative finance.

I am a former physicist, working on quantitative problems. Before I went to school, I worked as an auto mechanic, campus policeman, factory helot, day laborer and cab driver for a former motorcycle gang (don’t ask). As such, I have what I like to consider a practical, working class perspective on things.

-- Scott's About Page

Don't let his somewhat mysterious background fool you. Scott is a champion and sought after expert. Only a few month's ago Facebook tried to poach him for their new blockchain team.

Here is what Scott had to say about them:

But if I did want another job, the very last place on earth I would work is Facebook. Facebook is corporate syphilis. I keep telling them this. I even went through the process of quitting their service and wrote a whole blog on it. They don’t listen. It’s almost like they don’t give a shit when people tell them things. I was polite the first time, joking they could have my services if they buy my company. No more.

When I say Facebook is corporate syphilis, I am not engaging in hyperbole. I consider tobacco companies to be more ethical and serving a higher social purpose. Tobacco companies employ factory workers, farmers, shopkeepers and .. they keep doctors in business. Tobacco is more sociable than Facebook; smokers must meet face to face now that they are banished to the outdoors. Hell, smoking is probably physiologically healthier than spending hours a day noodling with your nerd dildo on ‘tardbook; at least you get up and walk around once an hour. Supposedly nicotine is a prophylactic against Parkinsons disease, even if the most popular delivery method does kind of give you cancer. Facebook isn’t prophylactic against anything but having a life. Unlike Facebook, some people want and enjoy nicotine. Nobody in the history of the human race has ever decided they want something like Facebook in their lives. “Gee I want a fraudulent advertising service that ruins and commodifies my relationships, wastes my time, makes me depressed, decays the moral fiber of entire civilizations, causes mass hysteria, spies on me and sells me out for pocket change, is as addictive as heroin, is the bones of a hellscape surveillance state and is impossible to live without in the modern world; SIGN ME UP YO.”

--I don’t want to work on your shitty blockchain project: especially you, Facebook

---

Scott's specialty forecasting and quantitative finance is extremely important for BAT. Essentially they are running an ad market on top of a speculative crypto market. BAT is both a speculative token and utility meant to allow advertisers to buy user attention. Many questions arise:

• Advertisers may buy today and users see across the week. Do I get paid more if an advertiser bought space today instead of a week ago if ad space price has increased?
• If advertisers want to pay in $ how are BAT tokens priced and purchased in the back-end?
• Will volatility in token price cause volatility in ad space pricing?
• Can and should BAT take active measures to stabilize the price of BAT.

We can see Scott was in charge of calculating the exchange rate of a BAT sale in 2017 based on this official blog post by him.

---

Some even speculate Scott Locklin is in charge of an internal project to stabilize the price of the currency through forecasting, controlled dumping, and low buy backs.

I'd heard this rumor previously on Telegram and from anonymous sources (possibly dubious) but the only time I've read BAT team even mention stability is Eich in an AMA:

u/lukusdukus asks: BAT is an exchange of value focused on attention, if we imagine a scenario where it becomes widely used online, do you see an opportunity for this to become one of the first mainstream digital currencies by proxy or saturation? i.e. imagine that I could spend my earned BAT in most online stores - perhaps through the creation of standard payment gateway services for platforms like Shopify? Would you look to build these services yourself or just provide a payments API so that developers could create the integrations? u/BrendanEichBrave

In response Eich started to bring up issues of volatility even though that hadn't been mentioned.

It is possible BAT goes big this way, although see Vitalik's post https://vitalik.ca/general/2017/10/17/moe.html. BAT has had relatively low volatility per https://twitter.com/woonomic/status/942921951252709376?lang=en. Our goal is to keep it valued on platform via MV=PQ or (T for Q, and H=1/V, C=1/P per Vitalik's post) MC=TH where M is capped by the sale, growing as we release UGP slowly from 1.14B to 1.5B, and H is limited by the time in users' ledgers to 30 days + faster/rolling settlement time. Sorry for math and pseudo-physics econo-b.s. but long story short, if BAT became useful for general payments, it would be competing with the big cryptocurrencies that are good for general use, and would face the issues Vitalik cites. One more thing: average folks aren't ready to lose coin (wipe private key via user data loss on OS or browser profile), send to wrong address. To overcome these issues requires more than BAT or LN or anything. For now we keep user BAT balances small, encourage backup of word list, and can restore lost coin given words.

We can see from this that BAT is engaged in trying to control the price to some degree through how they release the UGP.

UGP = User Growth Pool

UGP is an amount of BAT tokens kept by Brave to be released in promotions in order to grow BAT as a platform. There are 360 million tokens in UGP of a total supply of 1.5 billion. By the time these tokens have all been released to the public the circulating supply will have increased ~32%.

But the supply is hard capped at 1.5 billion so the strategy described by Eich to stabilize price can only be used short term. It's obvious that if you keep selling a set supply of BAT to stabilize price eventually you run out.

BAT will collect additional tokens as they get a 15% cut of all BAT spent by future advertisers. But with 85% being split between advertisers and users it's hard to imagine the 15% would be enough for them to engage in price stabilization mid to long-term. Since all tokens spent by advertisers either have to come from BAT reserves or bought on the free market.

Some suggest BAT has other accounts holding tokens in addition to the UGP. These accounts could be used to dump and buy back at lower prices. It's possible but so far we have no evidence of that. I also think that strategy would be a difficult to maintain long-term if the platform gains popularity.

---

One last interesting piece of news related to economics and BAT. The recent announcement of the Universal Protocol Alliance. A partnership dedicated to the creation and standardization of proxy tokens. Allowing anything from bitcoin, and more traditional financial assets to be owned on blockchain through "proxy tokens":

SINGAPORE--(BUSINESS WIRE)--A coalition of leading blockchain organizations, including Uphold, Cred, Blockchain at Berkeley, and Brave, announced a universal transparent reserve and custody standard that introduces ‘Proxy’ digital assets to the world via the Universal Protocol Platform (UP Platform). The UP Platform, which recently announced early backing by a group of leading institutional investors, serves as the hub for the creation and management of ‘proxy’ tokens and user features that will drive mass user adoption of cryptocurrencies.

Proxy Tokens are a digital representation of their underlying asset and can exist on other blockchains. Using these Proxy Tokens, the UP Platform creates a common universal language that allows distinct blockchains and token-based projects to interact freely and frictionlessly with each other. This technology enables Proxy Bitcoin, for example, to exist on Ethereum and be reasoned with directly by Ethereum’s preponderance of decentralized applications, decentralized exchanges and smart contracts.

Universal Protocol Alliance Launched to Bring Interoperability and Safeguarding of Digital Assets