Announcing a novel NCNT operation on tokens for incentive targeting and attention efficiency
What’s the most common kind of email? For most people, it’s spam. According to Statista, the percent of spam over all email traffic ranged from 50–70% over the past five years. Unfortunately, spamming is still a moderately effective, albeit inefficient, way of reaching a target audience. At nCent, the last thing we want is to find stamped NCNT tokens (representing a multitude of incentive programs) mindlessly distributed in spam. But what’s to stop a company from spamming a bunch of stamped NCNT tokens to use in an incentive program, or to gain popularity, or to reach their target audience?
We believe that we can strongly disincentivize spamming strategies with a novel operation on NCNT tokens called CashOut. When a user performs a cashout, she immediately exchanges stamped tokens for NCNT. Traditionally, token owners could only redeem or transfer them. Cashing-out adds a number of important functionalities to NCNT.
- Cashout deters spam
Suppose a company chooses to spam its customers by flooding them with stamped NCNT tokens as a way to gain publicity and reach their target audience. This is losing strategy overall, because any user who gets spammed with their tokens can simply cash them out. This company would incur a steep financial cost. That’s why adding a cashout feature increases the cost of spam.
What’s more, the cashout option incentivizes businesses working with NCNT to responsibly and intentionally allocate their stamped tokens. The most successful incentive programs trafficking in NCNT will likely perform targeted research before seeding their stamped tokens to a specific pool of people.
2. Cashout makes it “feel real”
Second, the cashout value of a token could also lead people to psychologically connect NCNT — an unfamiliar currency for anyone not living in crypto-world — to the familiar value of dollars in cold, hard cash. Research suggests that people enjoy using what they’re familiar with. So, the psychological pairing of tokens and dollars could help people feel more comfortable using a crypto-currency.
3. Cashing out is recorded on an immutable ledger to assist seeding new incentive programs
By now you’re probably wondering: ‘But if I receive stamped tokens in any form, why wouldn’t I just immediately cash them out for their value in NCNT?’ The answer lies in the fact that every operation a user performs on the blockchain is recorded on a public, immutable ledger. In particular, every cashout transaction is recorded and made available for public scrutiny. If someone constantly cashes out NCNT, then no one will continue to seed or transfer NCNT to them.
Now in some cases, it is of course acceptable and recommended to cash out NCNT. If you receive a stamped token, for example, that you legitimately can neither use nor pass to anyone likely to find a use for it, then by all means, cashout! If you receive a pool of NCNT from a company spamming you with stamped tokens, cashout! But if you make a habit of cashing out tokens that you reasonably could use or transfer, your disposition and behavior will be public record, and you can expect in that case to be targeted out by the market.
Cashout acts as an online reputation system that track users’ choices and responses to various incentive programs.
A reputation system that tracks a user’s choices on the chain is also a great opportunity for developers to create applications. A mobile wallet application, for example, could load someone’s profile for you before you transferred them any NCNT. It could easily tell you what kind of NCNT user this person is. What percentage of the tokens they touch yields a reward? What percentage of these token do they cashout? What types of incentive programs are they most likely to redeem or transfer vs cashout?
Overall, we believe that the cashout option adds important functionality to NCNT tokens. CashOut can be a defense against spamming. Combined with a reputation system, it preserves network virality. We think cashing out will become a central utility as it expands into the mainstream.
Feel free to experiment with CashOut and other operations by building an application using our SDK on Github. Also please join us on Saturday, October 18th for our first ever global hack-athon focused on building blockchain incentive programs!
We at nCent Labs are continuing our research and work on simulating the CashOut operation and tokenomics more generally. If you are interested in learning more, contact me at [email protected].
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