Patreon killer.
My name is Anton and we are building the Thetta DAO Framework. It is like OpenZeppelin, but for DAOs.
Only 5 days ago, I was a guest of one of the best “for hard-core developers only” russian podcasts, DevZen. We were talking about our framework and as an example of a real-world usage scenario, I proposed a DAO scheme that would suit them.
Here we are going to design a DAO scheme that can be used by a podcast show to incentivize the different parties involved.
Ok, here is what the DevZen process looks like:
There are many cases in the real-world where DAOs can be used effectively:
- (top priority) If you have many different actors that you want to incentivize and make “rules of the game” clear.
- If you need to govern something and change parameters collectively.
- If you wish to automate processes.
- If you want to be more open (about salaries, finances, investors, etc).
- (lowest priority) If you want to protect yourself from the centralization (i.e., government control, local admins, etc)
So in the case of the DevZen podcast we want to define the organization in the code (not on paper) and add crypto incentives to motivate team to work, guests to appear on the show, and listeners to be available to buy advertising instantly and automatically.
The “guest not appeared on the show” problem is real and is very critical for any podcast.
There is a good example of this kind of problems in the latest book by Nassim Taleb — Skin in the game. Quote: “Robert Rubin, […], collected more than $120 million in compensation from Citibank in the decade preceeding the banking crash of 2008. When the bank, literally insolvent, was rescued by the taxpayer, he didn’t write any check — he invoked uncertainty as an excuse”. Lack of clear reward-penalty mechanism leads to that. And we want to get rid of that problem.
What crypto protocol for DevZen Podcast can look like?
- Any backer (“patron”) gets ERC721 badge “i am a supporter #120”
- Any listener can get a ERC20 “devzen” tokens by sending X ETHers to the DevZen DAO and becomes a “patron” (i.e. token holder).
- All collected ETH goes to the “moneyflow” contract with the roadmap. It works like that:
- Pay for hosting 0.5 ETH each month
- Pay for other expenses (expenses can be modified)
- If 1 ETH is collected (one time only) -> buy mic
- if 5 ETH is collected (one time only) -> buy a new server
- The rest is split as reward for the DevZen team (dividends calculated based on reputation)
- Any patron can use DevZen tokens to run ads. Just burn Ktokens to add your add into the slot (linear, no priority).
- Any reputation token holder can use Reputation to govern the DAO, i.e., change the parameters. Also, reputation is used in the votes to select the next host and to add or remove moderator.
- To become a guest, a listener has to become a patron first (i.e., they have to buy some DevZen tokens), then they must stake S tokens for D days. After the show has ended, S tokens are returned to the patron. If the guest missed the show (that is bad), the tokens are burned.
Photo by: James Altucher
Here is more detailed file describing this scenario — https://gist.github.com/AnthonyAkentiev/05579c3a77be6d41718f2dd70627a5dd
All of these requirements can be implemented using Thetta’s permission, moneyflow, governance and token subsystems. You can use Thetta to set a basic layout of the podcast “organization” and then add some features like TokenCuratedRegistries on top of it. In this context, Thetta in this case is an easy-to-use basic DAO layer that’s compatible with smart contracts from other libraries, such as OpenZeppelin.
Let’s move on.
DevZen Token Model. Example
DevZen tokens are minted each week:
- 10 tokens for 5 ads slots
- 0 free floating tokens
DevZen tokens are burned:
- 2 tokens per 1 ads slot (if ads is running in the current episode). Let 1 DevZen token cost $25. It means that each ads slot cost $50 initially.
However, if there were no ads in a show, these tokens are not BURNED automatically! They are kept in the DevZen DAO for future purchase. However, imagine if 100 ads slots were not used and 200 tokens are minted and kept. Then one buyer can buy all these tokens and put an ad in 20 consecutive shows!
Reputation tokens are minted each week:
- 2 tokens as reputation incentive for 1 host
- 2 tokens as reputation incentive for 4 moderators
- 1 tokens as incentive for 1 guest
Reputation can be converted (“cashed out”) 1:1 to the DevZen token by burning.
“I order to mint more reputation tokens!”
Problem 1. Inflation
Each week 10 DevZen + 5 reputation tokens are emitted, but only 10 DevZen tokens can be burned. If reputation tokens are convertible to DevZen tokens at a rate of one for one, then in the worst case scenario, we will end up with 15 DevZen tokens but can burn only 10 of them. This is inflation of +5 tokens (at the max level), which will drop the price of DevZen tokens.
Still, I think that inflation is good, because it gives us free floating tokens for market making. This means that DevZen tokens are always available for purchase and the economy works better. A price drop can be viewed as an automatic fee for using the system.
Problem 2. What if I have tokens, but there are no ads slots available?
Ok, you bought 2 tokens and want to run your ads. But there are no ads slots available.
You will have to wait.
OR DevZen can increase the price of an ad slot from 2 to 3 tokens.
OR DevZen can move from fixed slot prices to dynamic values with an auction model.
Any DAO should adapt to changes, that’s why the governance subsystem is very important. Thetta has different ready-to-use modules that you can use for governance.
Conclusion
You can see the DevZen DAO scheme here: https://github.com/Thetta/DAO-Templates/tree/master/contracts/3-DevZenDao
It is not 100% ready yet, but it’ll give you an idea of how the finished version will look like and act.
It’s clear to us that converting the Patreon structure currently used by DevZen to a DAO adds incentives, formalizes the process in the code, and improves the crowdfunding process.