MemoryCoin's grant system is failing.
Grants are awarded every 20 blocks, and 5 grants are supported, all by popular vote. This means that a grant can be supported by as little as 17% of the vote.
It was obvious to me that near the start, some coin owners would vote to award grants to themselves as a form of interest rather than support developers, community projects and the MemoryCoin foundation. Indeed I encouraged them to do this to get owners to interact with the voting system at the start.
I thought that as the coin grew this would become less of a factor as it would be difficult to continue to control 17% of the coins. This is true, but has been complicated by the large amount of coins being held on the Bter exchange. Bter has not started voting (through technical difficulties), and this means the voting participation has dropped below 50%. Effectively now a grant can now be controlled with less than 8% of the coins. One coin owner is close to securing 2 grants.
Even if Bter were to start voting, there's no guarantee that another exchange would not become dominant later and start to vote for interest payments on coins they held.
And even if ownership becomes more widely distributed, Mr. Wax's fund would likely become a permanent feature, gaining more and more support.
My strike was not successful in securing a long term change in the voting patterns of coin holders. Owners continued acting with short-term self-interest. It is a tragedy of the commons.
This dynamic ensures the grants will not be used in the future to support the coin. With one of the main aims of MemoryCoin failing, the value of the coin has dropped significantly. Large coin owners were not prescient enough to understand this would happen, although I did my best to make this clear. In short, I overestimated owners ability to act in their own enlightened best interests.
Without radical surgery, the coin will die a slow death. My proposal for surgery is to fork the coin, changing the number of grants from 5 to 1 - so only 1 large grant is supported rather than 5 small ones. This will make it more difficult for individual coin owners to control, and will remove the uncertainty about whether the grant system is succeeding or failing - there will be a binary choice - either coin owners will vote to support the MemoryCoin foundation or similar organization (success), or they'll choose to support a Mr. Wax style interest fund (failure).
This is an important change, but not particularly urgent, so I'm opening it to debate. Interested to here everyone's views on it - coin owners and others too.
