Mar 4, 2022
Incentive structure of bitverse
And other subtleties
Let’s imagine an artist like Taylor Swift decides to use IPFS (a content-addressed storage layer of the open-web) for one of her new upcoming songs.
She adds the song to ipfs, gets a unique fingerprint of her content (the song’s unique CID in the infinite pool of open-web which ensures the song is resistant to tampering and censorship) and shares that Cid to her fans via her social handles like twitter, Instagram etc.
Now her song is easily available for people to listen to who knows the song’s CID via any of the ipfs clients/gateways.
Her fans can also store and provide that song to other nodes in the network.
But what does an artist like Taylor Swift get for sharing such amazing content as this song to the world?
That’s when DAOs like Bitverse steps in.
“Bitverse corrects the asymmetry between the value created and value captured by the amazing artists of the internet”
Bitverse would benefit superstars and independent creators all the same.
Alright let’s discuss incentive and stuff —
So, when an artist adds their content on bitverse, they enable themselves to be rewarded Bitstones (crypto token) directly to their wallet address.
Bitstone (Ticker — BIT) is the native token of the bitverse platform. It is an ERC20 compliant token.
Artists can choose to trade these tokens on Crypto-Exchanges or hodl if they like.
As of now the project is deployed on Polygon-Mumbai Testnet, and the token is rewarded according to the following protocol —
1 Bitstone will be minted for every 10th ‘netlike’ they could accrue on their content.
Note:
- Netlike = Total Likes — Total dislike
- No token will be rewarded for the same milestone more than once.
E.g., - If an artist has been awarded 1 BIT for reaching 10th netlike already, the next token will be minted on 20th netlike (the 2nd milestone), and the third token will be minted on reaching third milestone (i.e., 30th netlike), and so on.
Like is not free on Bitverse!
Yes! A user needs to pay the gas fee in order to like the content, since every ‘Like’ is a transaction on the Ethereum blockchain. And the same goes for the ‘Dislike’ as well.
But wait! Why would someone pay a fee to like content?
Idk, why do people use Patreon and stuff!
Let's see what incentives this brings to the table —
- This will stop people from spamming the network.
- Users would be motivated to spend their likes on content which actually provides value to them.
- Same goes for Dislikes, users would dislike the content if they genuinely feel the content is falling short of a standard.
- This makes Likes and Dislikes actually count.
- No Cheap Signaling ❌
Note: since creators are rewarded on the basis of ‘netlike’, both ‘Likes’ and ‘Dislikes’ are equally powerful in moving the needle in either way.
Creators are motivated to get as many likes as they can, and avoid getting dislikes equally as it could hinder the creator to reach successive milestones, remember BITS are rewarded on each milestone only once.
Incentives around IPFS — The decentralized storage
Bitverse uses IPFS as its storage layer.
It’s decentralized and the content would only be available if someone around the world is hosting/seeding it.
Let’s discuss effects of that—
- A piece of Content will only exist on the network if it’s actually worthy of existence and carries some value.
- Fans will seed their favorite artist’s content if they really love it.
- It’s in Creators’ best interest to create content which really is useful and valuable, or it won’t be able to have a healthy presence on the network.
- This will keep content hubris in check.
- Cheap Signaling won’t work here🪅
- It has a mechanism to filter signal from noise at systemic level.
As you can see, the incentives of bitverse platform are aligned in such a way that it doesn’t allow for worthless content to exist. Ergo, a piece of content will only exist as long as it serves a purpose, or provides value of some kind.
Bitstone (BIT) token and its value
As Creators will be able to trade their newly minted bitstones on DEX and other crypto-exchanges, lets discuss the factors that could affect the value of the token.
Other than the basic economics of supply and demand, I reckon the gas prices on Ethereum could also be a factor that can affect the value of the bitstone token.
Let's see why —
If the users in the network like content despite facing high gas fees, it could mean — the content is that valuable to them and they are willing to support the creator no matter the gas fee. And I think this should be reflected in the value of the bitstone as well.
But hey, it's just what I think, and I could be totally wrong about this. Markets are way too complicated to make any statements like that.
At the end of the day, it is the market which will decide what it's worth! 🤞
Let’s also talk Adoption —
I think the biggest deterrent for people to use or to migrate to web3 is not that it’s pretty complicated (which it is) or there’s a learning curve (which there is), it just that there’s not big enough incentive for people to shift to web3.
I think with platforms like Bitverse, things could change. People would see that they no longer have to depend on the central authorities and could have the freedom back in their hands.
DAOs of the open-web could literally help people to earn and even make a living, and incentivize more and more people to use and adopt decentralized techs like Ipfs and Ethereum.
🔗 Links:
Learn more about bitverse here.
Link to the website: bitverse.xyz
Link to the GitHub repo: https://github.com/xylanreeves/bitverse
Link to the Smart contract: https://github.com/xylanreeves/bitverse/blob/master/contracts/Bitverse.sol
