Thoughts on the MWC Initial Supply

Nico Porter

May 12, 2021

How is the MWC supply created and distributed?

The initial MWC supply was created in the genesis block with 10,000,000 units and another 10,000,000 units will be mined using proof of work. The 10,000,000 units were distributed for free in a widely publicized airdrop during 2019 to any Bitcoin holders who registered over a period of months, over 148,000 bitcoins were registered making it one of the largest airdrops ever, and any MWC holders who registered for several airdrops during 2020.

The supply of cryptocurrency can be created in many different ways. For example, it can be purely proof of work mined, a result of a fork, created in a genesis block or other ways. Some people may attach their personal, yet irrelevant to others, moral judgment to the means of supply creation. No matter how the initial and other supply is created the price discovery process must proceed with buyers, sellers and holders participating 24/7/365 in the orderbooks.

In Bitcoin’s case, for years early miners had extremely low costs that were basically free. The bitcoins were valued so low by the market that many were given away for free in faucets to increase network effects. Additionally, other new stock was created by a miner who then likely sold to a speculator who sold to another speculator and so on until eventually it landed with a holder of last resort.

In MWC’s case, the initial stock was valued extremely low and to increase network effects was distributed, via an airdrop same as a faucet, for free to either Bitcoin holders in the bottom of a bear market or to early MWC buyers and holders. It could be argued that this constituency would likely make good candidates to become holders of last resort.

Therefore, in this monetary experiment, the MWC initial stock may have started off much nearer the eventual holder of last resort than the Bitcoin initial stock did. Nevertheless, in both cases the monetary goods have had to grow their market cap during the price discovery process from zero.

Praxeology, the study of human action, does not attach moral judgments to human action or prices. Prices describe past behaviour but future prices are totally dependent on the subjective valuation from individual market participants based on how well they think the good will help satisfy their desires.

With gold the market does not attach personal sentiment to how the stock was created or distributed despite extremely immoral history, like the Spanish conquistadors.  Likewise, with Bitcoin the market does not attach personal sentiment to how the stock was created or distributed despite some people thinking it will boil the oceans by using too much electricity and not being ‘green’ enough. If they do not want to buy Bitcoin for that reason, as the meme says, they can have fun staying poor.

The stock to flow ratio measures how much dilution holders and new buyers endure. In Bitcoin’s example, in 2011 there were about 5m bitcoins and in 2021 there were about 18.5m or 73% inflation cost paid to miners. In MWC’s example, at the start of 2021 there were about 10.7m and in 2030 there will be about 11.1m or about 4% inflation cost. Consequently, the MWC stock will be created much faster than Bitcoin’s and the buyers of MWC will be paying a much lower price in terms of MWC than early Bitcoin buyers did.