Loadpipe Community Town Hall 5: Tokenomics 4

Another Loadpipe tokenomics calls happened on Friday March 8, 2024 – 1 hour long, lead by James on the team. Diving deeper in a spreadsheet he made and how to reward good marketplaces in the ecosystem. 

(00:02) yeah it looks like we we got quite a crowd Bo how would you like to do this we can go through like the figma document that you have we can start with that and have some discussion around that I can also walk you guys through the toonomic model playground in a sort of spreadsheet that I was working on as well oh I mean I yeah I mean I I had no ideas I I was under the I thought you were going to lead this meeting sure okay two screens all right can you see my Discord the infinite mirror yeah I see the for miror okay
(00:42) perfect so yeah I D would you like to share that link in the chat maybe for those or would you want maybe in tokenomics community chat in yeah chatting governance maybe yeah okay if you’re comfortable to do that yeah okay oh yeah no it’s fine it is a working like sort of model this is more for exploratory purposes like I I think I was saying before my my goal here was to see what could be and how theoretical numbers could sort of impact each other so we can better understand the relationship of this super formula
(01:22) for the time being that we’re we’re working on and so there are a lot of numbers here this is not meant to be human able in such a sense though I can sort of help translate this and then maybe at the end of the call we can actually play with some of these numbers and individually you guys can do so as well so In This Very simplistic model we’re assuming two marketplaces that’s a little bit more robust from one and the marketplaces themselves have a score right we’ve we’ve talked numerous times
(01:55) about a sort of marketplace ranking and how that can actually feedback into the Rewards or the emission rewards that they get and so we have Marketplace one which ends up having a score of 92% which is very high this is an aggregate of some of the variables that we were talking about before as well as two I’m calling them handicap variables just like in Gulf sort of bonuses and Buffs that you could temporarily have based off of some conditions before we get to that in our assumed formula we’d like the total percent to add up to 100%
(02:34) so we can change these numbers we could change this to 5% and this to 15% we could change this to 20% and remove this variable entirely the point being though is we can decide what the upper limit is on performance according to certain Behavior or metric within the formula and I think it makes sense for these ceilings to be determined by load pipe itself sort of weighted partially against what the community thinks but also responsibly handled so that people can’t gain the system yeah does that does that make
(03:08) sense to you guys I have a question James these ceilings okay it should it should be decided by the community but is there any way to try to figure out which one is better more than just speculation or setting an arbitrary number I think initially is going to be educated speculation with lunch and then as we get experience with the Hamza Marketplace we’re going to be better informed to determine the weights for these things there’s a lot of things we don’t know and I think what’s important is also going to change over time
(03:45) depending on like the number of users or like vendors or participants that we currently have right so like initially for example you’re not necessarily going to be able to build up customer service time or measure disputes there there might not even be disputes for a period of time and so initially when we’re spinning up we could adjust these weights and I think that makes sense from a dow point of view and correct me if I’m wrong or if like anyone else thinks something else but ultimately I hope that the wisdom of
(04:20) the crowd will prevail in that regard how do we arrive at a percentage of the ceiling this is arbitrary this is just for experimenting here part I mean like so so you have like escro the escro time ceiling is 10% but it’s at 7% for this Marketplace how is that 7% of the 10% calculated yeah so each each one of these variables will be calculated based off of whatever data we’re ingesting and I don’t know what that looks like so like in this spreadsheet this is just a arbitrary number what I think makes the
(04:57) most sense is we can have like some sort of Baseline metrics for each one of these variables but we can also compare them relative to other marketplaces for example if half of every order is resulting in disputes right when we launch maybe there’s like some technical difficulties like in in some capacity then our dispute time could be 10% relative to the metrics of the other marketplaces experimenting during the alpha stage so maybe instead of having 50% disputes you have 45% disputes and that can or like
(05:41) 45% disputes like weighted against the total amount of participants on a specific Marketplace then you could sort of wait that against other marketplaces to receive the score so like well I mean the thing I would the the concern that I have is that whatever we like so in this construction of the formula all that like computation to arrive at a percentage has to be smart contract computation right so like all those formulas have to be defined with onchain data and then have to be like executed it’s onchain execution and so so yeah I
(06:17) mean I I guess okay so we don’t really have a good definition of what what goes into what metrics go into that correct yeah each one of these is going to be its own thing I would anticipate you guys are doing like maybe a daily that you could do a weekly to save on gas or you could even do twice a day but like sort of just update of these variables I’m again I’m not sure what what is going to be feeding into these but if you have dispute time right for a specific Marketplace and we’re saving
(06:46) that data whenever like a dispute occurs then it would be looking at the maybe the moving average of disputes over like a period of Time how long they’ve lasted and weighing that comparative to the number of parti participants on the platform like it shouldn’t be weighted a lot right if there’s only one vendor and one buyer or maybe it should so that’s like a future conversation specifically with this it’s just okay let’s assume we’re measuring these correctly however we are and looking at how much of an
(07:20) impact they have on the reputation score or like a specific Marketplace does that make sense yeah that makes sense yeah and it it’s it’s arbitrary this is like playing with numbers sort of experimenting if you will so we this will all be robust it will not be living in a spreadsheet we’ll have some actual formulas probably doing this through code as well and I think like one of the first steps for that or reaching that point is defining what some of these numbers could look like not specifically the marketplaces
(07:53) themselves because these are like arbitrary metrics but rather like what we want to do on the protocol level I think is maybe some of the more impactful stuff so okay anyways should I yeah so we have some handicap oh go ahead I I feel like maybe some people are shy to clarify but maybe I’ll just reiterate in my more I think I’ll try to say in more simple terms and maybe you clarify if I’m interpreting it correctly and maybe I can help others James please yeah definitely so essentially this spreadsheet the point
(08:31) of this is to incentivize good behaving marketplaces in the protocol and disincentivize or at least not incentivize what the protocols formula for bad behaving marketplaces right so there’s these different kinds of criteria that we’re outlining and based on that formula the higher scored marketplaces would get higher percent of the emissions which is new tokens being minted to them versus other marketplaces in the ecosystem or protocol right yeah no that’s a wonderful explanation I just I have a feeling I don’t want to point people out
(09:16) but I think some people are newer to crypto even even even I’m kind of and then the emissions so then those tokens obviously that Marketplace would receive them at their smart contract wallet which could be an individual or a multi Dow and then they could distribute it to their Marketplace how they wish right we as a protocol doesn’t know how they’ll distribute it so correct to be to be fair I think oh sorry just just to clarify there I think that the D like we don’t have this entirely sketched out yet but I think
(09:55) like what I would like to see is that like we have a dow Factory for Marketplace Dows and that Dow Factory has like sort of a a token receiver contract which token receiver SL distributor contract so then when it receives emissions it like it is forced to emit to the different like actors at the marketplace level according to like sort of another formula we Define so for instance like the marketplace governance might might be able to say like well we’re going to distribute 80% to the the vendors on our market right or we’re
(10:32) going to distribute 80% to the governors on our market right so they get to choose like I ideally and this again this is just sort of my future construction is they would get to decide the percentages as they’re distributed to the actors of the marketplace level and this formula is like the the way that the the protocol Dow decides how much of whatever percentage is being allocated to marketplaces in general which how which marketpl get what percentage of of that allocation and then there are like a couple of other
(11:04) actors at the marketplace or like at the protocol level which also get some percentage of emissions but yeah I mean I would like it to not like I I don’t think it’s like best to just throw it into their treasury I think it’s better to to throw it into some contract that forces distribution and then they can vote to to have it distribute 100% to their treasury if they want but then that that would be something that would be controlled by by Marketplace governance yeah couldn’t couldn’t have said it
(11:32) better myself so just sketching here very quick this spreadsheet all it is is determining how much how big of a circle the marketplace gets and then what B is saying is based off of configurations on a Marketplace level based off of their Dow they determine who gets what percent of what so maybe vendors get this much and maybe the market maker gets this much of the big circle we give them maybe it’s 50/50 and I think that that should be governance based for them individually I like it yeah I would also prefer that yeah so not covered not
(12:06) covered in this this spreadsheet this is the macroeconomics the marketplace specific distribution of emissions was further conversation I think is it should we try to encourage questions at this point is there others don’t I I yeah okay great I have a quick question yes please so I’m a little confused as to I I I’m getting it’s arbitrary numbers at this moment but not everything would be 10% of the like every Everything has a ceiling for 10% right but how would we go about setting an initial actual value for Real reviews
(12:45) customer service time we would need to flush that out before sorry before actually writing down the initial contracts right yeah so specifically within the spreadsheet the fact that we’re using percentages is kind of arbitrary these could be points if you will like escro time could be 50 points unique buyer rep could be two points as far as the ceiling goes so you can get a 10 out of 10 or 15 out of 10 it’s a very simplistic model but yes we we would need smart contract Behavior which would measure each one of these metrics and I
(13:22) I think that’s partially like a data design sort of thing like some of these can actually be relatively complex for example example if we’re looking at Real reviews we’re going to need some sort of method to determine whether or not review reviews are like real or fake and then maybe even have subcategories within that for example maybe we wait reviews with photos that accompany the review themselves or like maybe we rate reviews from verified buyers a little higher and so each one of these things
(13:55) like Bo was saying before is going to be its own solution on the smart contract level I mean it’s it’s just to also maybe help it’s like a report card it’s like a score right so so ceiling is just the max amount you could receive in that bucket and he just has 10 buckets at 10% each so they’re all equally weighted to make 100% And yeah of course this is a first draft so if we want to say Real reviews is more important we can make that higher sealing of the percent or the weighted amount of the score of the report card
(14:34) of the marketplace essentially we’re trying to kind of uh oversee the marketplaces which actually there’s been some discussions with other projects and others so we’re trying to kind of oversee the market this is basically a way to try to to to to ensure marketplaces are be are doing good things which I don’t think is attempted even in web 2 there’s not really anything really like this right that is there anything we can look at that could be like this is another question James most Market most Market places most
(15:07) marketplaces have a scoring methodology that they use for vendors so nothing has sophisticated as this but they have a scoring methodology which is usually super secet SC to reverse engineer a rating that they will give to a vendor and it will have much simpler categories so if you wanted to use an open database so for example this case more access to their database anonymized you can kind of use that to not reverse engineer but to get an idea for the kind of things it is that they prioritize for for vendor
(15:36) scoring my my question was going to be how comfortable are we with the waiting changing so obviously at the beginning when we’re trying to encourage X we can drive the waiting to do that because we won’t necessarily have like a ton of reviews but the further in we move into the program we would then maybe want to priortize something else what does that look like is that something that’s permissible or is that for both I I think that should be encouraged for for a number of reasons one is like sort
(16:05) of maintaining the Integrity of the system itself people are smart people try to game things and maybe they’re well eventually when we have more users unboarded there are going to be certain metrics which are much easier to achieve based off of certain Marketplace actions even of the Dow and if they’re that easy to achieve that means they arguably have a disproportionate impact on the results that or the emissions that should be rewarded to the marketplace right like if you only have to do one very easy thing to get a 10%
(16:39) in one of these categories then everyone’s going to be doing that and consequentially we should probably reduce the total ceiling for that specific variable and I think the the best way to do that would be through like load pipe level Dow governance maybe with Marketplace represent representation but I I think the best example I mean and it’s not a perfect example but like the best example is maker mkr so maker is the the Dow that controls the die stable coin and basically it’s like they their Dow
(17:13) establishes a work stream right just like an offchain like that Weekly they have an update to their parameters and the parameters that they control again are a little bit more simplistic it’s like collateralization ratios and interest rates on vaults so like a vault is where someone would lock up ethereum and take out what is functionally a over collateralized Loan in die they create die through this like Vault and so like their e their underlying collateral is locked and they have a die loan and the governance only
(17:46) changes the interest rate on taking out a loan denominated in specific currencies and then also the collateralization ratio so so like the governance actions would be to do things like change the collateralization ratio from from 150% to 160% in a period of like high Market volatility or they would change the interest rate if they see like the price of die trending sort of in like if it’s trending towards a dollar one then they might increase the interest rate in order to or no no no decrease the interest rate to
(18:18) incentivize people creating D and then selling it on the open market right and then they have a work stream that evaluates the impact in in the ecosystem and then makes recommendations based on how they see the ecosystem changing and I imagine we would do a sort of a similar thing like we would have some periodic governance vote on like what we think we need to prioritize in terms of like what we want to encourage marketplaces to do and then we would have a team that like evaluates well what does that look like like what is
(18:49) the health of like each of these marketplaces what how how has this like change affected their their behaviors did it did it have the intended effect and then they they make a recommendation to to say okay well maybe we should to reconfigure the weights because people look like people are are gaming the review system so like let’s bring down the the review weight and bring up like the unique buyer rep weight so that people aren’t just like creating I don’t know and yeah so people would make recommendations and then present them to
(19:20) to a governance board and then the governance would vote to to change the weights again on on some time period yeah sorry maybe maybe this is a a dumb question but what do we mean by marketplaces here yeah that’s I was going to say I wanted to clarify this just because I think there is always this confusion and even with Nina’s comment I’m hoping she she’s on the same page cuz when we said vendor rating this is not really rating vendors this is rating marketplaces so we are starting with Hamza Hamza is a proof of concept
(19:55) Marketplace but the idea is we have multiple marketplaces multiple Amazon multiple Hamas and a load pipe protocol is governing all of them and incentivizing them for good behavior and rating the performance of Hamza but the idea is there’s not just Hamza so I I hope that’s clear I was also thinking of clarify that for those so this is a this formula James is making is for the load pipe protocol which is governing marketplaces such as Hamza and rewarding good what it seems good behavior with token of load
(20:33) pipe uhhuh this will be so sorry just I’m trying to figure out this in my head this is just for bonification of good behavior in total of the marketplace which is composed by several individuals correct yeah correct for for now so everything from L to R is measuring Marketplace reputation and Revenue relative to other marketplaces and revenue this is something that we need in some capacity when we’re considering the macroeconomics like our emission schedule how how many tokens we’re Distributing across various
(21:12) different marketplaces and so these are these are just theoretical marketplaces this doesn’t have to be Hamza this could be something else and yeah we’re we’re measuring relative performance and the reason it’s relative performance is because yeah we might be Distributing a certain arbitrary amount of new load pipe tokens as emission rewards but we we need to determine who our best actors are on the marketplace level so that like the the goal isn’t just getting a perfect score in all of these that’s that’s impossible
(21:47) to do it’s rather getting the best score your Marketplace can relative to other marketplaces so you’re not just good you’re the best exactly and this information might be public some somehow like the marketplaces know what are their their scores yeah I think it should be yeah they would yeah okay and as much marketplaces exist the more deloted distribution is correct so well yes if you have 50 different marketplaces and they all have the same score then they’re getting 150th of whatever our missions are going to be right well I
(22:31) also think I don’t know if you talk about this James or not thought about this but we might not be Distributing all at the beginning as much we might have it where there’s more released later to allow for more adoption so that although of course anybody coming in early in any kind of ecosystem usually is rewarded most generously but I’d still think we would maybe allocate more as it grow like I think we would not distribute all again it’s out of my my range of knowledge but I don’t think we
(23:01) would unlock all of it or whatever the terms are so I think it would kind of come in more would come in later hopefully in my opinion so this is a conversation Bo and I had and this is kind of more of where I want to lead the conversation I suppose is there there are many different approaches that we can have as far as like the total Supply and how we emit relative to the total Supply so we we can pursue like model we’ve seen quite often where we meant an arbitrarily large amount of tokens let’s say 30 trillion tokens and they’re in
(23:37) escrow or 95% of them are in escrow and then we release tokens from escrow to token holders alternatively what we can do is we have 100% C circulating supply of tokens let’s say we’re starting off with 10 million and then we can mint more tokens we can add more tokens relative to some other variables maybe it’s like the revenue that load pipe is earning something like that and they’re very very different approaches primarily from I think the psychological component of people who are using these tokens right like it’s a
(24:17) scary thing if you’re looking at a protocol and you see only 15% of the total Supply is circulating like in the back of your mind you always have that fear whether Justified or not that like the project could just dump rapidly introduce some of the esro supplied in some capacity and so like I I personally favor like having an arbitrary initial Supply and then minting new tokens and maybe doing that paired with some sort of burn function monolog does that create some kind of inflation on your own token yeah so I have this column here and
(25:01) we’re kind of skipping ahead but it’s daily dilution so you can see if we were to Mint in a vacuum X Supply or x amount of new tokens how that would impact the price of the token so we yeah we are looking at that these are sort of like endpoint variables and really like besides just determining some arbitrary variables for the marketplaces where where we can really learn a lot is by playing with the protocol variables here so one of the things like I wanted to talk to you guys about so we can get some real numbers or realer numbers is
(25:42) what we anticipate the percentage fee load pipe is going to be collecting on Marketplace Revenue like this is an arbitrary 7% we could do 60% like Amazon which I don’t think you guys want to do and we could play with it and see what happens when we have 1% like what what do you guys think initially on launch I I just want to clarify maybe David’s the best to answer it and I I believe he said he want to talk to you about it but the 50% is not it’s not just pure pure commission off the topic includes shipping and other
(26:15) services as well just to make sure that’s clear so we had to just what value are we providing I think the the actually there is a chart maybe David could help pull it up or different categories have different percentages in Amazon Market it’s not like a flat percent it depends on the product category and that’s like that’s their base fee and then they have all kinds of fees that does get up to like 50 or 60 but there’s of course the fulfillment fee the warehousing fee the they PPC fee so it’s not just like a flat percent so
(26:45) I don’t I don’t know if we should consider it in multiple Parts but it’s definitely not like one fee that they have they have a whole list yeah so my my follow-up question with that would be how much of that is is Justified in terms of the service they’re actually providing and then how much of it is actually Revenue how much are they taking home I think Bo shared an article recently in Discord about They Don’t Really disclose that in their numbers because they mix AWS and they mix other
(27:15) businesses and their financials in their public records They don’t break down their Marketplace profits division so nobody really knows how much they make they try to say they actually lose money in the marketplace and the way they do their numbers but we don’t nobody seems to believe that I don’t know if David might be the best you I think they they could yeah I was going to say sorry but go ahead D David do you have an opinion or response about like the fee structure of Amazon and how we could replicate that or learn from that
(27:45) or apply that well as you mentioned the the the fees from Amazon are very diverse they affect almost everything you do right and the percentages also as you mentioned depends on categories etc etc right but normally at the end of the day they take like 45 50% of your Revenue in fees right so do we actually want to charge that much but of course this is is 50% when you use FBA yeah that’s saying FBA yeah that’s what I was trying to say it gets it gets a lot so again this is the beautiful thing about this project but we’re kind of merging
(28:27) TR Commerce with crypto but FBA for those that don’t know maybe even James or others fulfilled by Amazon so no it’s fine I mean we’re all learn we’re all sharing different skill sets FBA means fulfilled by Amazon and the other option is fbm which is fulfilled by Merchants which means it’s shipped from outside of Amazon’s own Warehouse by the merchant or a third party service so but I definitely don’t I I hope all of us don’t want to charge nearly as much as they do and there’s another
(28:58) factor that we all got to keep in mind that Hamza or any other Marketplace also needs their own fee structure this is just the protocol level fee right this is not the marketplace fee so I I personally vote to be as low as possible I I I was even saying some people verbally is almost negative because we almost want me want to incentivize them by paying them to transact at to beginning potentially in some form maybe it’s not directly in maybe other ways it’s a it’s a negative but I also want to make sure we all take
(29:30) into account that there’s other other fees that other actors need to charge such as the marketplace themselves the low protocol fees will be charged to the marketplace right and then the marketplace will have its own fees for the service of the marketplace right that’s a great question but I think it’s paid at the time of transaction I don’t know if somebody here wants to help maybe bow or Garo or others want to weigh in there maybe John it would probably be at the time of the the sale I’m sorry
(30:05) one both so let’s David you want to repeat the question yes yes we are talking here we are talking here about the load protocol charging a fee right but that fee I assume should be charged to the marketplaces right and then the marketplaces will have their individual fees because if someone uses the load protocol for creating their own uh Marketplace which is completely inside of us we will be charging them the loow protocol fee right and then that person or that team will create the fees they consider in their
(30:46) Marketplace or can we force the marketplaces to charge the load fee to the consumers somehow we can yeah this is actually a good question and yeah I mean I think because like oh yeah It’s tricky because as we’ve been evolving our understanding of the way the escro system works we know that we can extract a fee but I’m like now now I’m trying to think of like how do we enforce that a Marketplace uses the protocol escro contract do we want there to be a protocol escrow contract yeah I mean John I’m I’m I’m
(31:35) like this is the first I’ve like given some thought to this do you have any any input here let me think about it as well yeah but but you see what I’m saying the question is about whether or not to force marketplaces to use the official protocol escrow contract and in so doing allow the esro contract to take fees for the protocol yeah because I think yeah when when we’ve been talking was to not actually have transaction fees from the protocol but take the fee out of the protocol in other ways I think in more
(32:16) like complicated ways and I think that that made sense I thought we had like just decided to go to not go with the idea of taking fees directly from every transaction in the protocol yeah I mean that’s I know I mean I was going to bring that up to I think that’s a marketpl well there’s so much to discuss here yeah sure to marketpl job because will charge the market places and the marketplaces pass that on to their well there’s another Factor there’s sorry to give you some more insights about what
(32:51) what I’m thinking is I can create a Marketplace using the load protocol right yes so I assume that the load protocol meant some expenses in whoever created it right so if I’m using that service it will be pass part of my operating expenses right how much costs me to use the Lo protocol for having my own Marketplace that that’s what I I I was thinking that’s why I assumed the load protocol will be charging me and then I will do whatever charges I want to my users yeah I mean this is a very important discussion and there has been
(33:38) a over the months been a lot of different job mentioned we were even considering not taking a fee on the protocol level we were we were originally talking about a just a pure staking model for becoming a EI a vendor or maybe a fee for becoming Marketplace as you mentioned there’s even discussions about carry in and and and earning from carrye I don’t know what is James thoughts James you’re familiar with some of those discussions right not not in the entire history but I I I think it’s similar in some ways to
(34:12) like uh nuclear power plant versus burning coal so or maybe some other energy generation resource but we have the barriers to entry for VAR for vendors and if we expect to get capital for the load pipe protocol via exclusively staking those numbers are going to be higher and if those numbers are higher that disincentivizes small vendors from participating for example if the escro requirement for a vendor to participate in a Marketplace is not $50 but it’s $22,000 then we’re going to have less vendors very likely and what we could
(34:57) potentially do instead is have a very very small fee maybe half a per maybe 1% and what that would allow us to do is like any expenses that they’re incurring maybe it’s it’s gas fees something like that this is a number that’s directly related to that so we’re never operating at a loss right this is this could according to David like in terms of operating cost for load pipe this could initially literally equal whatever cost that we’re we’re paying or maybe even being negative if we have
(35:35) some sort of War chest but like I I don’t think we want to accomplish this exclusively through escrow because if if we do that that’s going to hinder user adoption and it also doesn’t scale with expenses necessarily it’s like a onetime thing right what what how how is there percentage Lo pipe fee if we’re not doing it on escro transacted that’s like that’s money flowing through the system where where else would there be a percentage Fe yeah so so Escrow in this I I I think I understand so this this escrow is the
(36:14) escrow required in order to get a seat at the table right this isn’t the the escrow that is required for like a specific individual order right I think two different things so so yeah yeah yeah so we’re we’re talking two yeah exactly so maybe maker stake requirement would be and vendor stake requirement would be better because when we talk about escrow we talk about the escrow of a transaction the escrow of an order more or less right which is which is how yeah yeah we is that how we got down this path when you said escrow did you
(36:47) mean oh you meant what took us down this path I think right in our ter come back yeah in our terminology we call it staking to become a vendor or Market Marketplace versus Escrow in our at least how we’ve been calling it is for a buy sell transaction terminology so I I think this is like a an extremely important conversation which will inform like tokenomics as well as like some of the things David has to be concerned about but like how how do you guys want to make money with this like we we can do a percentage fee
(37:22) on on escrow right not the staking we can do curely just staking right those are kind of like our two options the most important well there’s there’s other ways I mean the other way is needing is token for for the for the judges it’s like the native token for judging and disputes I mean that would require them to to purchase it right yeah I mean that’s the demand side Mone but there could be there’s two mechanisms of Revenue generation right there is a a fee on volume that passes through the
(38:00) protocol and then there’s token like token value acrel right those are the two possible ways that we could we could generate revenue and then marketplaces now marketplaces are different because marketplaces can have sponsored items right and and they can do all kinds of like deals on top they they can sell ads on their website and like like marketplaces can have have different Revenue generating mechanisms but in terms of like the protocol the protocol can possibly make make money in two two ways one is a a fee on on all
(38:36) transactions that pass through the protocol and the other is token value acral and token value acral does not necessarily mean that the token goes up in in value on a per unit basis right like it could just mean that it’s going that the token is going up in value on a market cap basis right like if we’re continuing to emit tokens and the value of the token keeps on going down but we’re emitting like it’s it’s staying relatively stable and we’re emitting tokens then that that is still
(39:06) technically like Revenue positive but but those those are the two possible mechanisms to make money right and and like the token value exclusive yeah what aboutus isn’t Carrie Carrie would be one of those two or or not krie I would say ties it well I mean Carrie yeah technically possible although I’m I’m less and less convinced that it will like that it makes sense just from like a smart contract perspective like bonus car is something we could do maybe as like a bonus for extra Revenue but not make it part of like the
(39:49) core of how we Revenue I can’t even remember who I talked to about this but I think it’s worth sharing they said you could give give the buyer different escro choices that gives them different bonuses and rewards like higher risk higher reward escrow that could allow us to do carry more or invest or so it’s like if somebody wants to be really risk averse they could choose it’s like different levels on there on the way the transaction is done and we could incentivize them to go ways that we would prefer benefit more from them to
(40:25) go if that makes sense it is possible it is possible sorry go ahead well let me let me just finish this thought and then go ahead but it is possible but like literally the calculation of gas fee for a swap versus like interest gained like like we would have to model out and figure out like and and and it would take some time it’s obviously not like MVP and it’s it’s it’s something if we were going to consider we would have to do some modeling about of just like figuring out what it costs to do a SW
(40:57) swap when you’re entering into the escro contract and then a swap out of the escro contract versus the interest gain well in escro and I think for that we have to like have an understanding of like what the average escro time period is right because like if if average escrow time is longer obviously like it can make a little bit more sense but like and and then like also on the value of the transaction right because sometimes if if if we’re proc cing an order for $15 then it it very likely does not make
(41:32) any sense at all because maybe like that that swap I mean we we looked at it the other day with Martin and even on like Unis swap or like on optimism a swap like that is going to cost like a dollar and so like on a $15 transaction like swapping twice to get $2 will cost $2 do we get $2 in interest on is it possible to get $2 in interest on $15 on $13 over the course of the average lockup time which let’s say is a week I I I think that that’s unlikely something that we can model out in theut we could ask Doan ORF they
(42:11) might have some solutions that’s true they might yeah they might be getting into something that’s true what is that some some great project he’s cooking yeah maybe we’ll get in on that but sorry go ahead James you something to say that was a joke yeah I was just gonna ask yeah no I yeah yeah so yeah not staking but specifically this this sort of escro are we not batching that like from a vendor point of view is it really on the individual item level one specific tiny escrow contract for the user or can
(42:43) we not like batch it by day or even like week with some sort of load up that they do anticipated based off of their revenue in order to mitigate gas fees yeah they will be batched it it gets really like the the the releases will be batched and like there will be some like gas mitigation there it’s not on a per item level but it’s on a p per vendor order level is like so so the send right like is there’s no way to bat the sent right so so on on deposit right and it would be a deposit on a per vendor order
(43:18) basis that that’s 100% going to have to be an individual squat right because we just can’t batch that right it’s going to be people paying at different times for different orders and so on and so forth we can batch release which theoretically reduces the gas cost of the exit swap right but but again that entry swap right is that’s that’s the question and again I I don’t know for sure because we don’t have like real numbers and we haven’t quite modeled it out yet but like but my inkling is that
(43:47) the the the the swap fee versus the interest on 7 Days might not be worth the squeeze but it’s on our mind okay so just just pulling things back cuz I think we only have seven more minutes allocated for this call this load percentage fee cell that I have here is just a very useful number for determining everything else I think this should be a number that we don’t issue we should collect some sort of percentage fee and that should be based off of whatever our costs are for operating all of this just like what you
(44:24) were talking about I think modeling that is important but we can assume at least according to what Mike was saying that this should at the very least be amounting to Zero from like a revenue perspective it should equally match whatever our cost in curred is for operating this Marketplace is that is that correct guys yeah yeah but that’s difficult to to to predict I mean how much you are going to spend but you cannot control how how much you are going to get in income because if you set a percentage that will depend on how many people joins or
(45:02) how many marketplaces or whatever right so as that maybe you exceed or maybe you don’t achieve the figure that you want yeah that does make sense like these numbers all exist inside of a vacuum like this 15,000 could arbitrarily be $1 or $50,000 and so like this is more just informing what our ratios are if that makes sense like if we’re collecting a fee like if we’re earning money in some capacity then or let’s say if we earn $1,000 somehow maybe it’s the fee on Revenue that passes through like the
(45:46) escrow maybe it’s token value ACR whatever that is if we’re earning $1,000 how many more tokens would we be emitting to vendors is kind of of like what I’m trying to figure out here and we’re trying to we’re asking the question how we’re going to take that fee out is that correct we’re I think that’s yeah I think that’s a question for us John like we haven’t I think we haven’t quite yeah it’s it’s just like a complication that I mean seems obvious now but like I don’t think we if we
(46:17) wanted to take money through Esra right would it not make would it not just be easier for everybody if we took the money if we took that percentage from the marketplace but based if we wanted to take some of it based on escrow or like based on volum like TR money flow through the protocol could we not just charge a percentage based on how much order Flow came from that Marketplace through the I didn’t say that very well but you what I’m getting at you mean a aggregate right like oh so you’re saying so when we do when we do
(46:51) emissions we like net out a per a percentage of like what we’re charging at at the emissions Point rather than doing it like by taking it on a per transaction basis yeah yeah on something like some measure of volume from the market or something yeah that’s a way of doing it so we don’t have to like take the percentage fee at the protocol level in the escro contract marketplaces can have their own escrow and then we can just see how much like volume they’re doing through those escro contracts that we’re taking yeah it
(47:27) wouldn’t change the fact that we’re taking a percentage of order flow Revenue but but it would just change how we’re doing it in a way that maybe would be more convenient for everybody and that’s s what no no because that’s sort of what I mean when I say like we can either take a percentage fee or we can do value acral to the Token right and if right like we take that percentage and we like literally buy and burn right um that per like those tokens right through open market orders then then that’s
(47:59) yeah or the second thought is that the token is a the token is a utility token so we could if we can figure out like the the right ratios and formulas and whatnot we can maybe just take our fee out of the fact that it’s a utility token without having to look at anything like order volume or anything like that can you what do you mean so it’s a utility token so people will need it yeah it’s value approv basically but utility makes it so that people will need it and we can just extract value out of
(48:39) that you mean like introducing extra Supply and then selling on the open open market that could be one way or just making people buy the token in but yeah we’re yeah we’re doing the same thing right we’re introducing new Supply and then selling the token and people are buying it okay so I suppose we are wrapping up soon and so I guess my final thoughts on this is like so this this spreadsheet deals with sort of a subset of a subset of emissions and it’s specifically the like a loose calculation of how we’re admitting to
(49:17) marketplaces at the protocol level but there’s two things that I would ask is one there’s these sort of like load pipe global Ables but we should maybe introduce all the other actors that exist protocol level so like justice would have a percentage of emission and maybe some sort of like little controller box that determines our like percentage that we’re allocating to to those different actors right so the actors at the protocol level would be vendors Jud judges and marketplaces let’s just say for now and then some
(49:50) sort of like controller box of like what percentage are we at the protocol level issuing directly to those and then second is yeah John is getting at this this good idea of like we do need to understand like what do people need the token for right and what are the different buy and sell pressures of the token right because like emissions should generally either be like people are holding for increased like vendors might want to hold more of the token as they get more of it in order to be able to do more volume do more esro
(50:23) marketplaces might want to be able to hold more of it to to engage in more voting at the protocol level but like judges will probably want to sell the token vendors will or like buyers if we admit to them will probably want to sell the token who are the who are the must buyers right initially it’s marketplaces and it’s also vendors to to but like getting an idea of like where the buy and sell pressure exists at like the sort of global level I think would be would be nice yeah so I I I think that makes a lot of sense within the token
(50:53) value ACR like sort of Revenue model and boiling that down as I understand it we would essentially be looking at how we can measure demand for the token right like mac pure macroeconomics like we yeah yeah yeah well because and then again it’s like if we can because if we can identify the different parties that we’ll be admitting to and the rough calculation of how we’ll be deciding who gets the percentage of those tokens then we can start like get an idea of like how often do we want to admit how much
(51:33) do we want to emit how does like an initial Supply change this and like how do we distribute like let’s call it the cold start Supply right because there will be a cold start Supply and then there will be like a continual emission and and then we can like again if we can identify some numbers of like then we can play with the idea again and have some the numbers to back it up of what does it look like when we don’t emit tokens but only emit out of the cold start Supply and then that just gets depleted over time what does it look
(52:07) like when you like what if they are governed by two curves right where we have our cold start Supply which goes down and a curve fasten over time and then we have emissions which rise According to some curve right defining those curves would also be nice in terms of like tokenomics and getting an idea again of these like demand Supply Dynamics so I think regardless of our Revenue earning strategy that something will absolutely want to tackle just just from like a PR sorry Dow like protocol level just like understanding what the actual price
(52:47) per token is not just this in the in a vacuum sort of scenario that I think we we for a second and say and ask James how far do you think you could get with that I think that’s that’s going to be a lot of oneon-one conversations yeah yeah yeah I just thinking like how far to get a really good picture of this we’ll need to create simulations and the simulations will get increasingly more complex but I’m wondering like how far do you think you could get just off the top of your head trying to simulate that
(53:23) using Excel sheets is that could be a start and I would recomend actually Excel not not this because Excel has like more functions than like mathematical stuff so I’m I’m gonna have to get back to you on that because we’re looking at I we we can certainly like break down this demand variable right so what what B’s describing is what is the Demand right and then what is that a function of so we’re going to have those variables from there and then sort of breaking them down similar to this Market reputation score that we have and
(53:59) then when we have all of those variables like so what is the demand from like a judge right then I think that’s a that’s going to be an open Forum conversation like what you guys think understanding the the value for like specific vendors to to judge their own market place and putting a dollar value on that so if we start doing this if we start trying to model this in Excel like it maybe it could be a collaborative effort between like me you and Bo or something like that or or maybe you and Bo or whoever wants to jump in on that
(54:36) like if we were to start we might find that Excel is just not the right tool for doing that but it might lead us to the right tool for doing that and we might be able to get a start of modeling some of this stuff before we actually build like a more complicated simulation Sim simulation Excel is the the the quick and dirty eventually when we understand things better we’re probably looking at Python and actually doing I was about to say I think this is a good start for identifying the various variables because because like sort of
(55:07) like he has here right like it’d be nice to have the variables and then have sort of like a stepwise progression of like day by day these are what the values look like and then export to that to to some to a graph where we can like visualize how how things are changing over time we might also discover that there are tools that we’re not aware of that are made to do to do the sort of like modeling like Financial modeling tools we may find done that the tools exist they I mean Python’s got such a robust library
(55:41) for yeah okay data yeah it probably be something like that and yeah that makes sense that that said as far as like action items go because we’re 6 minutes over for you guys I think the determining what that demand formula might might look like and then also reminding ourselves that we we need to consider the sort of like two alternative non eally exclusive Revenue models I think those are like the the biggest unknowns for any sort of toonomic modeling moving forward would you guys well I can I can tell you right now we will we definitely
(56:22) want token value apprel 100% and that’s like sort of I think what the process of toonomic modeling like that that is the end goal of toonomic modeling is is to design a system that engages in to in in token value acrel right that creates value and then ACR that value to the Token that’s that’s useful in the system so you me token price or market cap or both like I said it could be it could be both or either right like we we I mean like I would say say the primary statistic is market cap but the second
(57:00) and the secondary statistic is is price right because like market market cap is is like if the if the system is getting more valuable over time that’s good and the easiest way to judge that is by market cap not necessarily by Price okay but but market cap is a function of Price Right Price and Supply yeah exactly so yeah yeah personally I don’t I don’t really like to be defe structure cuz I feel like it’s just kind of replicating what we’re we’re trying to to leave and it’s of course I guess
(57:30) we need fees right but I I I don’t know I hope we just don’t think we just because I think what could happen is 5 10 years on the road the Dow votes increase the fees right like I could just see that happening it doesn’t it doesn’t have to be a votable variable it could be algorithmic and it could be a function of what our expenses are whether it’s gas fees or shipping Fe fees or any any sort of fee like literally just an expense variable and that to simplifies things so that regardless of macroeconomics and
(58:07) token price and whatnot like the the business itself is not yeah I like that I like that because people like the marketplaces and others that build their business on top of this would probably get upset if the fees unexpectedly increases it’s just like what Happ Us in Amazon if if there’s a formula or algorithm or justifiable reason I I like that more than just like a dow vote and then the marketplace is fighting in the future about the fees increasing well I would say also remember that the marketplace is as
(58:42) we’re admitting to marketplaces they’re getting power to vote in the load pip protocol right so like so marketplaces as we emit tokens to them get more power in choosing what protocol fees are right and theoretically if they’re holding the token right like they they have some some differential motives of like they do want the protocol to be successful so maybe they like fees but they do want to keep fees low because they’re operating a Marketplace but yeah they they they’ll have some it won’t just be that like the
(59:13) that’s sort of the whole idea right is that like the the the the protocol won’t just decide by some secret Council vote like the reason why we’re like emitting these tokens is to emit power to make decisions within the system so so even if like the it does increase it’ll increase with input from Market participants which are Market places I think that makes a lot of sense yeah that’s fair thank you I guess the old my response to that my response to that would mean the newer marketplaces would have an uphill battle versus the
(59:44) established marketplaces that have been inuring value and power over time but that’s a fair point though that they do have a say it’s yeah I guess we all just Ponder on all this is there others I hav’t I mean go ahead sorry I was just going to say yeah I mean like and and part of that is like it’s possible to design it with some sort of like diminishing returns to votes which I I tend to tend to like this is this is like James and I talked about this in I think the last one-on-one session we had but like this
(1:00:20) idea of I I really like the microtransaction model that like has a low barrier to buying the game right like games where you just you have to continue to buy and and spend hundreds and hundreds of dollars in order to like get the full game is a shitty model to me to me it’s like you should there should be like sort of a low barrier to entry and then any more money spent after that should have some diminishing return and so I I personally would love to see that in a voting system where yeah it’s like it doesn’t it doesn’t
(1:00:54) like really crowd out new imprints and once you get to to a certain level right like you have diminishing returns on your power is there another one I I I saw people in ens complain lately the cost to make a proposal was pretty high I mean is that a is that a part of it like to make a proposal having a certain amount of token and to be able to is that part of this at all or thought process or that’s just prob a minor detail it’s a I mean like it’s a it’s a parameter we’re going to have to set
(1:01:27) when we launch the Dow like it’s just something that we have like the the cost of making a proposal is is a parameter it can be adjusted up or down and but yeah we’ll have to come to to some initial for making a proposal it could be zero right but we also don’t want to like allow people to to spam proposals so there there should be some cost but yeah finding finding the sweet spot for like how costly it should be we’re not okay all right is anyone else want to share something I guess we’re wrapping
(1:02:00) up getting close wrapping up but I’d love to hear some others that haven’t shared much all right also I I want to oh Nina n one onone Nina has something sorry I was just gonna just I was just gonna quickly say from a Marketplace perspective given the kind of marketplaces it is you think you’re going to attract at the onset the size of these marketplaces the sizes of the teams whatever the revenue charging model is going to be they’re going to be probably a little bit more price sensitive than some of the other
(1:02:33) marketplaces so the ability to predict whatever their charges are going to be from period to period is going to be essential for them right so whatever it is you end up with from a charging methodology it does have to be relatively simple to understand and to I’m going to use the word predict but they should be able to gauge how much of their costs are going to go towards that so as as we layer more and more and I get that you can bring these on later it’s just that it will be helpful to remember that from a let’s call it a
(1:03:01) front end perspective it’s simple is better particularly when you’re promising to be transparent about about everything that’s all yeah absolutely I agree if we’re charging any sort of fee relative to costs of our our business we we should be very transparent to that even if it’s simply just gas PES and if we absorb that we should also be transparent in the sort of opposite regard so they understand like what we’re doing for them yeah if we have a negative fee for example we should make
(1:03:31) that very clear so they’re happy with us and yeah I I just want to point out this is this is an exploration document none of this is the Bible I think we’re definitely going to change some things based off of the conversation that we had moreover if any of you guys have questions individually or want me to walk you through more of this document cuz I think there’s quite a bit we didn’t discuss I’m more than happy to make myself available so yeah thank you guys thanks so much James thanks everybody cool thanks thank
(1:04:05) you very much see you later [Music] byebye