Purchase Controls offer Creators more control over their token economy by enabling control over key features around the purchase of their Coin.
The following settings are available as part of Purchase Controls:
- Buy cap per transaction: the maximum $USD amount that can be purchased in a single transaction.
- Convert cap per transaction: the maximum amount in another Coin or $RLY that can be converted into a Coin.
- Time between transactions: the amount of time between Buy or Convert transactions (this can be 1 day, 1 week, etc).
- Duration: the total period of time that Purchase Controls settings are active on a specific Coin.
At this time, Purchase Controls apply to all token holders except the Creator. Creators are exempt from purchase controls, with the only limitation being the site-wide $500 fiat-in limit.
Fans are able to make multiple purchases per purchase control period, up to the purchase control cap. For example, if the cap is $100/day, and a fan makes a $50 purchase, they will be able to make additional purchases that same day until they reach the $100 cap.
Purchasers are alerted when they initiate a transaction that is limited by Purchase Control features. There may be additional features added to Purchase Controls in the future to offer creators the ability to further customize their Coin economy.
This is an optional setting a Creator can turn on or off at any time. Creators can request Purchase Controls be enabled for their token economy at any time - email [email protected] with your request so Rally can configure. These controls will be made available to Creators in a future iteration.
The black box at the top indicates that purchase controls are in place, and the buy or convert limit is displayed immediately below the black box.
If someone attempts to make an additional purchase before the minimum time between transactions has passed, they will see a countdown timer in place of a Buy button.
Because the price of a Creator Coin increases as more tokens are purchased, Purchase Controls can help to limit the amount of tokens that are purchased by each community member, and manage the volatility of Coin price. This helps to ensure that early adopters are buying in at around the same price point, and being rewarded for their early participation.
The current recommendation is to set at-launch Purchase Controls to encourage healthy creator community behavior and well-being: a single transaction per day, up to $100 purchased per transaction; and up to $35 converted-in per transaction; and with these settings in place for 28 days. If you choose to use these settings, it means that anyone from your community will be able to use their credit card or connect their Coinbase wallet to purchase up to $100/day in your token. Existing Rally users will have the opportunity to convert up to $35 worth of their RLY or Creator Coins to your token. These settings will be in place during the first 28 days your token is live.
Here's some more information as to why we default to these settings, and how they work—
During a Coin launch, we have seen that a Creator's community members either join via an Airdrop of tokens, or by purchasing tokens with their credit card or crypto. Purchases are typically well below $100, and the median average is about $75. We've also seen that typically, community members will make a single purchase during a launch period, and then only purchase again when there is an activation or campaign incentivizing them to do so.
The other way to purchase a Creator Coin is by converting other Creator Coins or $RLY in exchange for the new Coin. So for example, if Jane holds 5 $RLY, she can trade them at any time for $TOKEN. The price will be determined by the current exchange rate.
We have seen that during a launch period, most converts come from existing Rally users. These people are not typically from a Creator's community, and they also typically make larger purchases than a community member; anywhere from hundreds to even thousands of dollars. These converts-in will increase the price of the Coin, making it more expensive for community members to buy in. Additionally, when these people convert-out of a Coin, the price will go down, which for community members who bought in when the price was high can lead to a bad experience.
Finally, we have seen that convert-in activity is usually at its highest during the first 4 weeks of a Coin's life. This is because of the way that Community Rewards currently work, favoring new Coins.
TL;DR — You can use Purchase Controls to limit how much people can convert-in to your Coin, ensuring that you are able to prioritize your community during the at-launch period, or for as long as you'd like.
Following the launch period, a Creator can choose to keep Purchase Controls enabled, either at the same level, or with lesser restrictions. Without controls on, the maximum credit card purchase is $500 per transaction (with no cap on number of transactions), and there are no limits on crypto buys or converts.
A Creator can choose to continue to control the growth of their economy, or limit how people can buy their token using Purchase Controls. By limiting buys and converts for example, a Creator can possibly limit big movers from entering their token. For some Creators this is appealing because they want to protect their community from swings in Coin price, for others it is not, because they want to enable big purchases. One thing to consider is that you can continue to limit convert-ins, but cap it at a higher amount than you initially set. This amount should be informed by the median price of the Creator’s campaigns or NFTs to allow community members to easily purchase enough $TOKEN to redeem for campaigns and/or NFTs.