This town hall focuses on governance and its impact on token value. Participants discuss tokenomics models, including the leaking vault, which involves marketplaces locking up tokens for protocol use. They debate whether the system should prioritize a market-centric or vendor-centric approach, considering trust-building and transaction facilitation. Overall, the discussion emphasizes the complexity of designing effective tokenomics and governance frameworks for decentralized marketplaces.

Access John’s Figma HERE

Loadpipe Community Town Hall 8: Tokenomics 7

Transcript:
(00:03) put together and John can present that and then we can go back to maybe governance questions which is something we sort of put on the fire for a little bit and I think that’s incredibly important because as we’ve discovered during this this process the utility for the token and th the value for the token is very much determined by the actions that people can make for their own so good does that make sense yeah I think so yeah so let’s start with John and then let’s actually dive into governance oh you and I have
(00:40) not connect for like a while and I I’d love to thoughts on like the internal operations of what utility driv governance would look like outside of the explicit also James it’s a little bit staticky today honestly it’s a little staticky on James’s side at least for me yeah let me try to rejoin I I think I might be having some problems my yeah so in case you didn’t get that I was chatting to James earlier so did you send that figma you made to everyone John J James want to talk about let me think about that so I think so you and I
(01:21) shared the figma I showed it to James now I guess I should have put I guess I should have put it in the like one of the tokenomics or something I don’t think I did that unless maybe James did that please share the one from last week no it’s a new one yeah it’s new it’s basically that is basically the same but it’s an igma so hang on a second I’ll get the well there’s three different options three different kind of directions that I think we should discuss yeah so let me see where I should put
(01:58) this token toomics chat what is it tokom token design team okay that’s where I’m putting it so do you want to explain it while or do you want to share your screen while I’m sh my screen can you guys see my screen or you can just follow along in the figma so again like we’re just throwing ideas around we’re not like I’m personally am not like promoting some certain idea or anything like that I just wanted to get a bunch of different examples of systems that basically work they they basically are
(02:33) viable and that we could kind of compare them make variations on them talk about them make new systems that solve some of the problems of the like existing ones and they’re they’re very simple like very high level because I think that’s where we’re at we’re just trying to get like the basic shapes of some some different systems so the first one called leaking vault is the one that we looked at last meeting where you have marketplaces they pay for use of the protocol by putting locking up their Tok
(03:06) tokens into a vault which slowly leaks back to the treasury over over time making them have to refill it they refill it by either purchasing from other players in the market in the system namely the service providers who get paid for their service from the treasury and so it’s kind of like a circle where it goes from Treasury to service providers to Market back to the treasury demand is that the market needs to lock up their token in the vault in order to use the the protocol and Supply is the treasury emitting tokens to
(03:48) service providers as a reward for their service the r here is ratings so this would be the governance element this is this was not in the in this model last week though this is taken from some other discussion it was a discussion that we had I had with Mike over last weekend and it’s it’s I think it’s just something we’ve been talking about and adding to to models like since for a while so yeah people who are who have governance vote they can rate marketplaces and that the rating in this case would control the rate at which the
(04:26) Vault leaks so highly rated marketplaces would have a slower leaky rate so basically lower cost of doing business is it cost when so can we dive into that a little bit in that world you’re saying like the governance of the protocol are the ones deciding the rating of the markets yeah so whoever has governance rights and votes determines the ratings of the markets I mean I mean wouldn’t that just be the protocol picking winners right the protocol picking winners so the government who would be who would be who
(05:10) would have rights to to do that though like who would have governance votes any token holder or would there be a special governance token that’s not like explicitly said here in this diagram that makes sense so I think we we have two distinctions here we have rewards directly for governance like sort of actors people who are doing certain votes and then we have the ecosystem level rewards which are determined by the market rating of the platform and that’s not determined by the platform itself that’s determined by
(05:46) whatever sort of algorithms we set up for like load pipon for in terms of judging Market I think does that make sense to you guys I think you might have just said that the the ratings are determined by algorithm rather than by voting is that right correct yeah so we have governance and they can determine the tools for Effective governance within the marketplace right according to their needs and the problems that they perceive right maybe they have Bad actors in a certain way that another platform has not had bad actors at the
(06:21) same time yeah we we should have some sort of third party sort of neutral governance control especially for talking about something like emissions because we’re as load pipe we’re the ones who are actually emitting props Behavior right and so it shouldn’t be necessarily our Dow but it should be controlled by the data points that we’ve expressing PR okay I just put this as a question that makes sense I think it makes sense to me and and James so in this case if it’s an algorithm will users sort of be
(07:02) informed of how this algorithm work well I I I think that’s a design question for the team but based off of the philosophy I’ve seen Express even when we’re talking about distribution of shares amongst the team that would make sense like our goal is total transparency and consequentially yeah we We should strive to do that so we can give them the formulas they can try to gain it and then our responsibilities with protocol is trying to fix the game so people can’t gain a fight and then we give them all the tools to fix their own
(07:36) governance they still govern but they’re they’re playing that sort of game of how to get the best rating compared to other marketplaces for better emissions like questions in I’m just putting like as we talk about different like ways I just put questions in blue things that you could ask one could ask oneself when looking at this model no thank you and that’s part of the reason I wanted to focus on governance at this point not just from the utility price driven point of the token but also like
(08:09) what sort of control set they have because like dis disregarding any sort of tokic model we assume we’re doing missions based off of some sort of score and the goal for them is having a better score and we give them the tools to enable better governance and having a better SCH right like what does that look like and I’m not shortcutting this I think there’s actually a lot of value and models that you provided which just contrary to our previous conversations we should look at these through like the
(08:45) governance sort of micro perspective of these marketplaces I think it would be beneficial okay yeah Qui okay so this one is so the gist of this one is that instead of a leaky Vault marketplaces lock up their token in a stake but instead of the the stake leaking back to the treasury the stake is actually rewarded by the treasury over time kind of like interest I think so is that right Mike yeah your understanding that was my thoughts too yeah this one is more based on like Mike and I mostly Mike’s understanding of what we was
(09:27) talked about before like what was kind of yeah things that we’ve talked about in these meetings before is that right that’s how I’ve been interpreting it where the the emission that yeah it’s called emission schedule I believe and then the rating of the marketplace performance would go higher to better performing actors in The Marketplace so in this model the difference is that instead of leaking back to the treasury the stake is being rewarded by the treasury and ratings are controlling the rate of that reward kind
(10:01) of like the interest rate ratings are determined by I guess the same questions might apply from over here but the understanding was when we talked about this is that ratings are determined by Governors and that’s why we called it the Mad scramble because it’s like marketplaces are motivated to stake more to become Governors right tell me this wrong so would they would want to stake more so they would get higher rewards so they can become Governors so they can V themselves higher rewards so it’s kind of like a Scramble
(10:39) for dominance and it would that would be the source of demand of the token well when you say so I mean again so to to James’s point I think it begs the question of like what sort of decisions can be made through like protocol level governance and so like I think that that’s true when like reputation of a Marketplace is like something that’s voted on right by governors of the protocol but if they’re just controlling like emissions rates of a predefined like again like of an algorithmically defined reputation then
(11:16) then they’re increased scramble and mad scramble is not derogatory it’s just kind of like we we gleaned from this that that would be kind of like the source of demand yeah what you’re saying makes sense though if they’re just voting on something like that like the the emissions rates that go with certain ratings but they’re not actually the ratings and is not so much of a Mad scramble well and I would argue that even like leaky vault is like mad scramble to me just means like open market right like so like if if
(11:52) governance power allows you to termine the rate of leak then then the same problem still applies right like Marketplace is just still incentivized to accumulate token in order to reduce their or yeah reduce their leak rate at that protocol governance level yeah for this one though I don’t think that’s really the main that’s kind of like an added bonus I think really the main source of demand comes from just the fact that you have to pay to use the protocol you need need the token to pay for the protocol in this one it’s you
(12:24) don’t need the pro the token to pay for the protocol instead it’s a little it’s a different it’s a different source demand here the demand comes from yeah what does the demand comes from wanting to have more power in governance right yeah yeah yeah so I I think that’s the primary point that we actually want to encourage for demand and I think the Big R that we have there should not be something that’s explicitly controlled by them that that’s the reward right that is reflective of the governance actions
(12:59) that they have taken internally as a community in order to receive that reward it shouldn’t be explicit they shouldn’t decide their own reward what they can decide is the distribution of the Big R so load pipe determines the Big R based off of how good they’re acting and then another incentive of being a governor is the fact that you can decide how rewards are distributed within your Marketplace so from a governance point of view ignoring all the to economics they want to have good governance in order to create a better Marketplace so
(13:37) that they get a bigger R right a bigger rating a better score so they have more money to begin with and they also want to participate in governance so that they can distribute that are in a way that benefits them and it’s a it’s a it’s a sort of balance thing you’re you’re balancing the not Market maker the market Marketplace maker and the vendors who do inevitably have some sort of conflict of interest but you are aligning them with the sense that they want to make the r bigger right they
(14:12) they want they have to work together to get a bigger rating at the same time then you have like the the Nuance of like okay our own self-interest as like group vendors well and I also think it might be helpful oh sorry go ahead a bigger R means a better rating is that is that what you mean by bigger R yeah just we have a better Marketplace therefore we get more rewards from the load pipe protocol because their ratings goes higher everyone has to work together okay okay so when you say they get to vote to determine how the rewards are
(14:54) distributed can you give an example of what you mean by that yeah for example we have certain governance actions right maybe strictly monitoring posts by various different vendors or reviews from different vendors that’s kind of like a mini governance job and if they as a Marketplace are having problems with that and that’s impacting your sport because they end up with bad reviews then they might distribute more rewards to the judges for that s yeah okay at the same time if they don’t have a problem with that they
(15:27) might distribute Rewards something else and they have no problems at all none at all it might be stly the vendor versus Marketplace maker distributions I still consider that okay I still consider that that they’re like kind of voting indirectly like not directly they’re voting for their own rewards but they’re voting in ways that will favor themselves with more rewards so they want more governance tokens so that they have more power in voting so that they can I think I’m not saying that’s a bad thing
(16:06) either that’s that would be what what the source of demand is they need some reason to want the toen and that would be it and that makes sense yeah I think it it’s like curve Wars Bo’s always been explaining that to at least me and I think others in this that it’s somewhat similar in a way to to curve I I think I mean not exactly but of course they want to own it and be able to to vote because they’ll be able to influence the incentive model I hope yeah I don’t mean M scramble as anything like derogatory it
(16:44) I mean it’s just kind of a funny name but what I mean is they want they have a reason to be competing with one another for more tokens that’s a source of demand and if that works as a source of demand and it’s a strong source of demand then that’s a good thing so we we have two sorry just one moment as I see it we we have two games being played we have the everyone’s the team inside of the marketplace game which is getting the bigger R and then we have the the sub game which is how to distribute the art right okay that’s
(17:19) yeah that that’s all sorry about no I was going to say so there’s I I forget the the point I was going to make directly after you said that but but thing I was going to say earlier is that I think it might be productive to think about this in terms of tangible proposals so so like when we’re designing ultimately the Dow right the Dow will have Smart contract structs and those structs will be representative of genres of proposals right and so and thinking about like the classes of Voters right what is it what is it what
(17:53) is required in order to be a voter what is like the constituency of a voter and how do you become come a voter that’s those are like those are questions that all are answered when we think about like the specific proposal type so like right now the proposal type we’re talking about is like it vaguely defines like what is the emissions rate to a Marketplace of protocol tokens and yeah so so like maybe that they’re as we defined it in the past like there is some metrics by which like onchain metrics that we’re tracking and those on
(18:31) train metrics ultimately result in a reputation score on a per Marketplace basis and adjusting the weights and inputs of that algorithm would be something that is possibly controlled by governance right but that’s that’s a a genos indirectly right they they as a Marketplace are autonomous and they realize they have problems people are delivering things slate right and that measures up within the very transparent algorithm that we have they realize it’s a problem everyone is incentivized to work together because everyone is
(19:08) earning less emissions because of that yeah so I think there’s I don’t want to like conflate the terms here because I really think this should be like a a governance to economics discussion we peeled away from it for like a little while and I think for a good reason but we should revisit like what are those internal interactions what is the true non-monetary utility for the actors within a space we can already assume that they have a carrot because we’re giving them admissions we can figure that out after the
(19:42) fact like why what are they doing what sort of controls what sort of levers do they have internally as like their own Nation like better L okay so finally this is just a variation on that one where the difference with this one is that it’s not the marketplace that’s the the first person it’s the vendors themselves so this has some implications that maybe it’s a separate question yeah you’re right the governance we we need to talk about that but just to finish this up there might be some benefits to
(20:17) making the vendors themselves first person where the market itself is just an aggregator just something we can like sh and talk about when we’re ready to yeah does that make sense though otherwise this is the same model I I was thinking about this when I was writing the white paper right because like ultimately our goal right is to shift the power away from a sort of conglomerate monopolistic Marketplace back into the vendors and the buyers and my question I suppose to Bo and Mike is like how much agency do
(20:51) we want to get to the marketplace we we could theoretically assume some sort a scenario where they just have to St some money and then or not Stak money Stak some low token in order to instantiate the marketplace based the volume that is going through market place and that’s it they don’t vote it’s entirely owned by vendors and maybe potentially buyers as well and then it’s entirely for the People by the people it’s the people who are using it no one owns it just someone owns the building and
(21:23) theying some R that’s didn’t find out I think that Marketplace as platforms I think it begs sort of a larger question of Justice right like where does Justice exists and I think Justice exists at the marketplace level generally speaking right because if you are like thinking about it from a customer perspective if you are disputing a payment or like if you’re disputing a transaction or a sale or something like that then you’re going to go through the market place which means that that’s sort of where justice
(21:55) has to exist unless we want to just make it like protocol Justice and which is not not not quite what I had in mind rather you could have marketplaces who are essentially like non voting investors and they just instantiate the marketplace they St the Tok and they get some passive rewards and that’s it they’re not actually involved beyond that point and the vendors themselves and the Dow that is created they actually determine the governance and Order to actualize that we essentially have no Marketplace maker other than they put
(22:36) forward some money and they’re making the Fe and that way it’s it’s literally the only participants as far as like governance Etc are the people who are actually interacting with the system we no longer have a 1B one we have just a one I know that sounds corny but think maybe that’s actually possible buiness yeah I mean they can self and we have load pipe which determines rewards based off of results not their actions just results the Big R and we go from there and the people that put forward
(23:14) the money they still get money that’s taking the token so the marketplace still make money yeah oh go no go ahead Mike I know I’ve I’ve been critical of Amazon but I mean marketplaces do do a decent amount of work in in in the e in to get customers and traffic to the marketplace so I don’t I don’t want to discount them too much on their value in the in the ecosystem but oh and sorry but yeah basically that’s that’s the but I do think we should allow maybe the idea is the marketplace could all be an actor
(23:49) or a direct vendor could be an act Comm engage directly with the protocol maybe it’s almost treated the same I’ve been thinking about this a lot is it treated the same just if a because like a Shopify store do we entertain a Shopify store I still think a Shopify store needs Justice to to build trust because if I just buy it on with ethereum off of Shopify right now I have no charge no justice if I buy something off somebody’s personal business website so I think that that’s like two two different issues because one we have
(24:24) this sort of esro vendor buyer policy which can protect against a lot of the Press components but secondarily not everything has to exist within the protocol for example mik you have some money and you want to create a Marketplace via load pipe and so you do and you let’s say get 5% of Revenue or something very simple like that and you have no decision making for the marketplace itself but what you do your incentive is to reach out the uh non- crypto channels in order to pull on the correct vendors in order to Market it in
(25:04) order to do that because your incentive is I get 5% fees of everything that’s going through here in a way vendors are their own farm and the marketplace is its own Farm after that and so the the the marketplace doesn’t necessarily need any sort of control their control is who they attract rather than like a sort of governance sort of proposal and that they don’t lose any money they’re just taking tempor they’re putting it up but just to be clear they can earn as much fees as they’d like as a normal
(25:37) Marketplace and their business model and advertising and everything like that is separate from this right I’m just trying to make sure we’re partially correct yeah maybe there still can be that sort of distribution between vendors and Market places but it it seems like we’re already growing this direction we want vendors to be free and we want vendors to in the marketplace right the ACT tural marketing is something that they can do so they have more vendors they have more volume so they can collect
(26:05) more that transaction of the volume and that’s entirely outs okay I I guess maybe I could discuss this later but I feel like they probably would need more money to sustain I mean marketplaces I know I’ve been the most critical but they they do have a lot I I guess it depends I mean who’s bringing traffic to the marketplace is it that I think that’s that’s that’s intelligent Fe structure though we’re talking about like posive production whatnot part of that is on us as a protocol but if we
(26:38) can actually anticipate how much it cost to like send a product for example just P Baseline 0% we can eff do that on the fee level on transaction and get the market as like which just and then the other thought is are we going to try to onboard existing marketplaces or is this only for like is this really only attracted to a new Marketplace but if there’s an existing say web 2 Marketplace we’ve had these discussions in other focus groups is this attractive for a Marketplace existing to join so mik mik Mike how how do Market places make money
(27:25) web current web 2 Market places yep yep how do they make money I mean they have so many ways primarily they make it off the transaction fees but as we we know they also have their own advertising platforms inside of them to be on top of the search algorithms and there’s other like fixed monthly costs to be like a subscription to be a seller those are I think the Three core and there’s a lot of other well I was going to say like I’m just I’m sort of running in a different not entirely different
(28:01) direction but but on this topic so like the other way that Amazon for instance makes money is through warehousing and fulfillment yep and and like thinking about marketplaces as being actors that serve vendors right like marketplaces both serve vendors and see have vendors as customers especially in the the instance of like those three like streams of income right the advertising and and increasing like people search ranking on their Marketplace that’s extracted from from vendors warehousing extracted from vendors and fulfillment
(28:36) right all extractive from vendors I mean it doesn’t have to be extractive right but like they they are providing a service to them to the vendors they’re been paying for and so like but but like to Mike’s Point yeah marketplaces have skin in the game and even our experience in this is like instructive to that to that effect right like we’re building a Marketplace and it’s taking a lot of like time and money from like a technical perspective and maintaining that Marketplace from a technical
(29:00) perspective and and this is entirely separate from the work that we’re doing on like this sort of governance protocol level so like I guess like I’m I’m starting to just like ask myself the question yeah do marketplaces need to have a vote do have a vote ciens and saying like Okay their state acts functionally as like a collateralization ratio which is like sort of what we’ve discussed before in terms of like their ability to hold any amount of escrow at at any given time but maybe that collateralization ratio
(29:39) changes as we emit tokens to them and our token has like a significant impact on their collateralization ratio so for instance we could say that they post 100 usdc Bond and they’re able to sell $50 as they get increasing emissions of tokens based on their like good behavior that that like Bond ends up counting for more based on like the number of tokens they also hold just again sort of a wild idea but like but but it does get into this thing that I think i’ I’ve said a couple of times recently I can’t remember
(30:17) exactly to who but like we we need to start thinking about the marketplace from a legal perspective and what it means to actually engage in things like the warehousing and film and how are we getting products from vendors in one place to buyers in another what do tax look like because these are the things like a Marketplace actually like if like we still have a lot of technical work to do but we’re moving to the place where like we’re going to be up and running and we’re going to have to answer these
(30:48) these legal questions of like how do we operate anyway again that’s that’s a bit of an aside to this whole discussion but but I do I guess big point is I do kind of like this idea of centering our token emissions and rewards around vendors and marketplaces s of exist as as service providers to vendors right functionally in the ecosystem they provide them with access to customers like a single interface their inventory management warehousing fulfillment and and and so on and so forth yeah so if I could maybe
(31:23) admit the reason I think we are at least I personally went into the more Marketplace Centric was because of the Martin or Martin collaboration and trying to differentiate there but I had a call with him yesterday and he supports us making this for D Toc I I think maybe it was at least me maybe trying to I don’t know I think we got off the last month or two a little bit too Marketplace Centric I I think it I think we’re po just said I feel like it I think we should go back to vendor Centric I agree and I think the the
(31:57) ultimate question like marketplaces that you’re on boarding that they’ll ask is they need to for money and how much money are they getting in return it’s very much like if we’re talking about investment in icos and idos this is kind of it is someone willing to put forth enough money to instantiate one of these Market places for some sort of like fix Fe which can be dependent on the protocol level by like a d non-algorithmic and then what we’re doing is we’re allowing Market places to
(32:31) exist that are governed by the vendors themselves for the important stuff we’re separating that sort of problem that exists for them where they’re worried about someone overreaching but you still have that sort of centralized eny that’s it deserves to be there they put forward the money and that’s that it’s it’s all about just setting proper boundaries well and I think that what I’m saying at least is that like the I I think we and to to Mike’s point I completely agree and I think
(33:04) we’ve gotten so like Marketplace Centric because we’re building a marketplace right and so we’ve we’ve been thinking like a Marketplace for like so long but really the protocol is yeah vendor Centric and marketplaces sort of can I mean not they can’t kick rocks but like we’re forcing them into competition with one another in order to provide good services to vendors which are like the individuals right like we want marketplaces to be Servants of the the vendors and the customers rather
(33:32) than yeah the primary primary citizens CI 100% agree and thank you John for pointing this out via the diagrams but yeah I think that’s that’s the sort of goal right we’re we’re talking about the problem we’re solving right and we’re solving many different problems disparity between vendors in the marketplace or citizens in the marketplace and the governance that is the marketplace and like Shifting the power back and we can effec do that through something like blockchain and we can do it in such a way that is non
(34:11) anistic to the marketplaces prent like a sort of over at the same time we can still as a protocol and we can do we should do most of this algorithmically in order to protect against the things that happen and people sort of reward system the Big R and I think we should also explore that I I think that’s almost more important like the self-governance we assume there’s an R we assume we’re going to distribute it in some sort of way but what tools do they have in order to self-govern in order to get a bigger
(34:52) AR I mean I guess the bigger question is could a Mark I guess it’s not always the same but could a Marketplace B is it a group of vendors I mean currently it is currently in web 2 it isn’t it’s like a totally there’s Amazon is a seller on the marketplace but is are we trying to make it where it could be like a group of vendors in I think it has to be a little bit more than that because someone has to develop the website and make decisions about how it functions and run the website the in backend
(35:22) infrastructure and everything so that it’s hard to have everyone like all vendors collaborate on that so I think a little bit more we yeah I agree but we we’re designing a baseline system that enables a sort of trustless and basic a basic set of logic which is enforceable in the smart contract level and doing things externally in the same way that marketplaces are incentivized to advertise people venders can do the same we shouldn’t discourage that we should just have a baseline of Truth or what’s
(36:00) important if that makes sense we we can avoid that yeah so back on topic vendor Centric I think is what everyone wants to do we should less focus on like marketplaces marketplaces are Market providers perhaps and they get some money for like putting some money in and we can Design Systems to run up for the actors they’re in for example example if vendors are doing bad things maybe the marketplace get hit gets hit maybe what they St gets hit if the marketplace vendors are doing good maybe the market does better but there are social
(36:42) controls that we just can’t control on the the blockchain so again I think we should focus on the internal actions of self-governance within a specific Marketplace especially because we’re looking at Hamza as a sort of group of EX extion I think that’s that’s more important temporarily for the toomics okay I feel I mean is everybody on that John what do you think do you have an opinion on vendor versus Marketplace Centric I it sounds like being more vendor Centric these are good arguments so that
(37:22) sounds better right at the moment maybe we’ll go back the other way and say there’s got to be some kind of balance between between between vendor Centric and Marketplace Centric but yeah I mean it sounds fine to me it doesn’t really like the high level model is not so much affected because it would just be that can any of these models take away the market or just put it behind and the vendors in front and it’s kind of the same overall strategy but it’s still a good thing to consider right now
(37:53) I guess I’m leaning towards vendor Centric yeah I think to me it doesn’t matter that much as far as a higher level I mean overw back in the day back in the day eBay used to be listen more to the vendors I could go I don’t want to spend so much time on the call but they would actually have Community calls with vendors when they change their fee structures and vendors or sellers would get upset and they would actually listen and adjust but I feel like Amazon now I mean address is in it they don’t listen
(38:26) at all there’s no communication channel to the marketplace I mean I feel like here we’re trying to at least have a communication Channel between vendors and marketplaces in yeah go ahead I’m just like I’m just trying to think through like how to build all this like like there’s these there’s like the the sort of theoretical level of it all and then there’s like the the code right and like what is possible and again it’s like we always I’m like thinking about like how do we
(39:08) extract a Marketplace Fe right like how does a Marketplace like I’m just trying to think it’s like okay if we force a Marketplace to instantiate a dow that is like that is spun from a Marketplace Factory contract that we right at the protocol level and then I’m just like I’m thinking about like how do we force them is that their own transaction switch right does that does that deploy their own switch which they then gives them power to change the percent fee of like that payment switch but always inherits like our payment
(39:48) switch protocol fee yeah those are yeah yeah I I I think starting grand grand granular actually is more important in order to effec enforce a fee on a Marketplace you need to be able to estimate right and that’s something that we should try to beiz protocal and some of that data some of that information would have to be self voluntary in a way but to a degree I don’t I don’t know the answer to that question but if if we can assume that people are self estimating or we are estimating the fees that
(40:27) they’re incurring that we can charge that as a protocol fee and then we can charge something else on top of that if we so desire and look and again this this like this is intimately tied have two levels yeah sorry this is intimately tied with Justice right because like our and and a little bit of like our conversations with Martin right because like we have this idea of the counterfactual smart contract deployment and that counterfactual smart contract deployment then routes the payment to our payment switch and routing the
(41:00) payment to our payment switch is where we would extract fees and also do dispute resolution right like it’s a it’s a contract that like sort of big picture controls escrow controls our dispute resolution logic and everything like that right so marketplaces we have no control over which code they deploy right they could just use their own contract or something like that but control that we enforce B is that Big R right we we could even assume that we’re giving out 1000 no no no no no I agree I agree I
(41:39) understand that what I’m saying is like I’m saying like if there were a malicious marketplace right like we have no control over them deploying their own like sort of esro contract I mean it would be it would be what I’m saying is like we we can’t force people to engage like we can only present rewards as you say right and and hope that they are incentivized by those rewards to actually engage in the system as we imagine it but we can’t we can’t force them to develop in any certain way and
(42:07) we can’t enforce them to like like that that’s sort of the question I’m asking right is like so so so if if we need some sort of uncomfortably overreaching like sort of governance I think that should be on the market places as a whole like if we need a hammer from this isn’t a governance question right like this is a this is a question of like when a Marketplace comes along and builds a front and back end how do we like like if they allow a what incentive do they have to engage in our system
(42:43) right like we provide an outof thebox Justice solution and like we are integrating with the product relay right like we we we have to be providing them with with value enough that they want to engage or the rewards have to be so like well we have the reward component but is there not some sort of centralized decentralized component to this like pza is just one but is there not like a I always assume this you know yeah no absolutely what and what I’m saying is like is like so let’s let’s assume that the r is big enough right
(43:24) like that the the rewards are big enough that a market Place wants to engage in our system then from a from a technical perspective what does it look like for a Marketplace to at the onchain level right like what smart contracts are they interacting with how are they routing payments how are they extracting their fee how are we extracting our fee and what order do those deployments need to go into right and so again this gets back to like the question I keep coming back to is because because again I’m EXP in my mind
(43:58) with this idea of like moving towards a very vendor Centric thing and I was like well what if we just got rid of the the marketplace Dow entirely do they have to be a dow but I think that that like Dow and reward structure as you said is maybe the only way to enfor that they’re or to incentivize them to use the set of smart contracts the Justice mechanism the escro contracts that we’re developing at the protocol level so the problem and forgive me if I’m per this run but the problem is we have no way of
(44:31) anticipating the mechanisms through which that they would deliver the product as far as like cod goes is that correct well I mean no no no that’s that’s sort of inevitable right like the again like that that’s sort of being the web two like real world component right like marketplaces are going to have to deal with warehousing and fulfillment in in whatever way they choose to whether they say it’s just entirely on the vendor or whether or not they have some like service that vendors can pay for
(44:59) right like there’s no onchain component not that there never will be but like currently there’s no onchain component to that but but I mean more so again like this this fundamental question of like how does the protocol extract fees on a per transaction basis and so like that’s I think why John had like theorized and and correct me if I’m wrong John but that’s why his theorized like sort of leak this so that way we don’t have to do fees on a per transaction basis but like I just don’t
(45:31) know in that world yeah there’s no like fee percentage that’s being set like we we instead say governance is like important in determining like the rate of leap but I I I do think that we need to have like a per transaction basis Fe as as a like a developer who’s familiar I think we’re using optimism like what is a per transaction fee look like I sold something right as a vendor how much does partical have to pay for that how can we accurately estimate that if it’s 003 cents that’s a lot less relevant
(46:12) right if it’s z03 that’s more relevant right yeah but I mean again this is this gets to like what are the fundamental decisions that like the protocol Dow and that the marketplace Dows are able to make right and setting a fee percentage is that and and again it comes comes to like this question of like how we’re doing escro right because when I in amounted in you like nested or like is sitting in an escro contract that’s the point at which we can automate right like we’re not doing it manually
(46:44) necessarily but like we can automate like a fee percentage being taken we can also populate that on front ends and say like look this is the this is the Fe percentage and and put that as like the I entirely agree with you in the fact that we need to effectively measure the cost of transaction and that expands Beyond just a smart contract cost that also is like going to be very Marketplace specific as far as like shipping but that’s very web to like additive but when we can estimate the entire cost of the
(47:19) marketplace we can distribute that across the whole as like some sort of collected vendor fee on the marketplace itself and who we tax for that I I suppose depends on the structure of things but that can be the marketplace itself right because again the marketplace instantiated it’s like its own mini business and it wants things to be cheap and it’s got that sort of soft policy power in order to encourage people to behave a certain way and vendors know this right the marketplace can express this at saying hey cost are
(47:56) to expens ensive I’m going to evaporate as a corporation or a company and the marketplace will no longer exist but but I guess what I’m saying yeah again you’re talking at sort of a theoretical level and and and I’m I’m I’m more asking like how how do we do it from a technical perspective like what what is what how do we write the contct yeah the the the the wrong people on the call for this I’m not that guy I mean yeah but but yeah I’m like I’m s of like spitting here I think I think that’s critically
(48:30) important like regardless of whichever way we go how we can find the cheapest way to effec execute and how we can find the cheapest way to measure and we’re doing this for all sorts of things right we’re we’re measuring like market performance in order to create the Big R but we’re also measuring these individual transactions and this is something that John had put forward before as well various people hello yeah I heard know hear I heard somebody drop or something but I hear you yeah no me yeah I think that’s a quential
(49:10) question we tackled things from like uh high level point of view but estimating costs on the smaller level and more more importantly like finding how we can measure those costs is important for the literal cost point of view as well as like all the metrics that all the higher level tokenomics rely on and I think that’s partially largely dearer sort of question I don’t know yeah I I would say I’m I’m not when I’m when I’m talking about this I’m not talking about this from like a a measuring the like the the individual
(49:50) like the cost of like gas or something like that I’m saying this is as you said like this this ties into like like tokenomics and mechanism design are like intimately related right so like how we extract the fee determines the flow of the token and like where who extracts that fee at like a smart contract level right like which vault which regy is the fee sitting in how then is it converted distributed right like that’s tokenomics yeah so I think like you said a large part of tokenomics is informed by
(50:27) simple things little things Atomic things like the sort of Fe that go through I’m fairly confident talking in that sort of theoretical like we have the big art I think macroon we have like a a pretty solid system and it’s a question of how do we treat vendors in marketplaces for example how do we treat the esro contacts like we Drilling in and yeah that’s I I feel like that’s a Cofe session with you and me and goo and actually talking over this I think there’s like a Nuance here because like
(51:10) you can’t have toonomic decisions that aren infl by the technical capabilities of what’s possible if we’re maybe kind of overstating the the technical implementation details a bit don’t we need to figure out the just the basic flow that we want and then decide how to make it happen yeah so the basic flow we have pig R we have the reward system and then as far as the macroeconomics goes we have an emissions that are air dropped across various different Market places and we add based on yet to be
(51:52) determined those are I think mostly solved actually I think the the more important questions are like the relationship between the vendor and the buyer as well as the utility value proposition of the vendors within the marketplace and yeah we’re we’re we’re drilling down I think we we actually got the high level would say anyone just feel free I’ve already made a copy of this figma feel free to add stuff to it clean it up Riff on it make variations whatever you feel like doing to it don’t don’t worry
(52:31) about messing it up or anything like that even if you delete stuff I already made a copy the way the way we I don’t think we need it needs to be like all all or the other for vendor Centric versus Market Centric like if we link markets into the reward and disincentive system then there’s some control over markets as well and if we link vendors in then there’s control over their behaviors as well so just question the other what’s up yeah just a question for the people who are present do we favor like a
(53:08) market Centric or do we favor a vendor Centric or are we disagreeing anyway I feel so far for me I’m agnostic on it I think the model is pretty much the same either way but just the distinction is not super important I think it’s a stronger proposition to be vendor Centric because there’s more it’s almost like B to C it’s more and we there’s going to be less marketplaces I think realistically there’s not going to be like millions of marketplaces right and we I’d rather have a lot more
(53:41) relationships with smaller vendors I think that’s a bigger potential than than just working with cuz I I still don’t know how many marketplaces are really going to exist in this I agree with you Mike I think the conversation is waying I understand the the the let’s say trying to Envision how this is the whole thing is going to work out but I think it’s becoming way too abstract and I think we should focus on a community of vendors which is the most likely the group that is most likely going to be
(54:16) attracted by by the proposition of an initial Marketplace and based on how that Marketplace performs then we could I guess guys you from a technical point of view you could say okay so now this is kind of working this is replicable people can Fork it Etc but I I would focus much more on trying to build a community of vendors otherwise I don’t know how we how long we’re going to stay in these discussions and the technicalities of this yeah so so let’s simplify right we have a big r we have a reputation score right and if we’re
(54:54) vendor Centric then vendor determine their actions which can result in the score so they don’t decide the score they just do things that make the score better that’s the whole game that’s the mini game that’s the marketplace level game marketplaces themselves don’t care they just get a commission for staking some funds and putting forward some money right I I think that’s a pretty simplistic model the higher level toonomic model we can revisit but that’s actually less relevant I think that’s
(55:29) mostly solved actually according to what Bo was saying from the very beginning as far as like the burning and minting mechanisms that’s that’s a thing we can solve down the line and we can always adjust and we will probably do it as like a protocol other like initially manually and then we’ll develop the algorithms around that so that’s less important like how do we curate that should have experience is more important I think the big the really big picture is we want the buyers to want the seller and or the
(56:05) marketplace to use our protocol for them it’s like a way of buying trust they use us for trust and so we want the buyers to buy from these vendors or marketplaces in confidence knowing that they have our Justice protocol like I keep thinking about Visa MasterCard I really think we like Visa Mastercard because we protect the the consumer the the buyer and the seller uses us for the trust mechanism and the buyer wants to use us and tells is that’s why the seller uses it because the buyer trusts it and they’re opting in to get that
(56:49) trust I we we told most of theonomics I’m going to put this together but like when talking about issues like that’s not actually economics that’s like micro transactional escro system that was explored in like some of the earlier JS that’s that’s an we can assume that we’re providing trust we can assume that marketplaces do not overreach we can assume that vendors decide their own self policy for this sort of big Carr and that’s it it’s it’s it’s pretty simple that’s
(57:28) and we’re we’re going to get more nuan in each one of those categories and maybe maybe marketplaces have some sort of say in some sort of way that is not just like external outside of the the blockchain and maybe buyers have some sort of more say like if if we want to push this through with a sort of deadline we need to agree on like some basine facts like the big art right we need to agree that our entity our third party entity load pipe is Distributing rewards we need to agree on a lot and I think everyone
(58:09) on this fall is kind of feeling it like we’ve been spinning our Wheels we can always readjust our course we need to sort of just put something out there work on it use hza as an experiment a good experiment and then adjust from I I I think we are getting into more detail but the point I think is whether it’s a Marketplace or a vendor they opt into our Justice mechanism to be and they’re rewarded with emissions for being a good actor so if they’re a bad if they have bad intentions they shouldn’t join because they’re not going
(58:46) to be rewarded and if they’re good actors they’ll be rewarded with customers and Emissions uh yeah so it’s it’s not really problem in that case right we’re providing the mechanisms for good actors to be rewarded for being good right yeah so I I think maybe we get into details about Mark I know Bo has a good point about the technical part but but I think we should treat John even says whether it’s a vendor directly or a Marketplace could be treated similarly but yeah I think we’ve all been agreeing
(59:20) on the r and the reward and John brought those three different models today to the call which is heate about the the esro system more specifically like how do we proceive staking working right because we have two different kinds of staking right and oh I’m forgetting the word now but you brought this up on the last call we have the microtransaction staking then we have the actual staking in order to become a participant in I say the micro is yeah there you go es that’s how I see it as well exactly so so as as a team we
(1:00:01) should train ourselves to use those words better because you’re referring to like the buy or seller escro you mean right yeah I was about say escro doesn’t have anything to do with token generally speaking right like I mean maybe there’s some like tangential relationship but like when we’re talking about Esco we’re talking about like products being bought yeah yeah yeah okay so we we agree on the Big R right and we agree on the escro system and we temporarily agree that we should prioritize vendors and we also agree
(1:00:35) that marketplaces should self-govern so that they can influence the Big R or sorry vendors should self-govern so they can influence the Big R and that marketplaces should not temporarily have a say in any of the decision making process they’re just when you say we agree on wait wait hold on when you say we agree on the Big R what does that mean that that reward should exist this is BL pipes like meta governance if that makes sense we we determine how rewards are distributed on an ecosystem level so we give a ball of
(1:01:13) money to an ecosystem and then the ecosystem determines how to distribute the rewards whether they give that to individual governance actors who are performing something in order to make their ecosystem better or if they give it across the board to everyone who’s a member of the ecosystem that’s entirely un can you can you say that one more time I’m sorry I don’t I don’t know that I understand yes yeah so we give all of money to a marketplace right and the vendors decide they vote to determine
(1:01:45) how the reward is distributed they could reward that ball of money or part of the ball of money to everyone who’s a member of the marketplace based off of what they vote or they could put like sub bounties based off of various activities that they need in order to improve the marketplace for example which right right which means that a Marketplace needs a dow right yep yep and the governance toen and so and the government and it needs a dow and then is that Dow and then how do we determine that payments actually flowed through
(1:02:20) that Marketplace does it mean that when they go to our Dow Factory and instantiate a dow they instantiate own payment switch and then the payments are routed there because that would be the only way of like tracking that it goes through a okay so yeah okay yeah this this would be metad Dow to smaller Dow absolutely we would put it inside of a wallet which is only triggered based off of the Dow that they instantiated and that would be based off of the vote and that’s part of the value proposition of load pipe is hey we have all of this out
(1:02:54) of the box you can have your mini governance and you can determine you can pull the the switches and turn the nozzles which token which token votes in the the smaller down as I see it and I feel like we’re approaching the Ken worms but I think it should universally be the low token especially if our goal is low token having a value proposition and so what prevents someone from one Dow One Marketplace voting in the marketplace are of another doubt so Dows themselves could control the entry conditions they could vote for
(1:03:34) example to allow someone to join like as aent they can vot people out as far as like monetary policy like sorry as far as like someone with a lot of money walking into a d or a lot of blow token walking into another D first they have to be let in and then as you and I had previous previously discussed I think having some sort of curvature towards voting power so that you get less and less and less the more you stake would somewhat prevent that okay okay so it has to be staked in the marketplace Di and the marketplaces the marketplace
(1:04:13) Governors get to decide who does and doesn’t have a vote because they have like a guild kick or Guild ad function I I think a little little before that they get to decide who joins who can and they I I don’t see any way around the problem that you’re describing like how do we prevent Bad actors from joining these BS and like doing this what what we can do is give as many tools to Dows so that they can kick out Bad actors out of the box without pipe over site you don’t want that I don’t know I
(1:04:52) I I don’t think there’s a perfect solution there though either I mean I’m having trouble F I have to probably listen to this again but the point is staking the load token to a Marketplace to participate I mean me that that makes that’s kind of how I think the answer to Bose’s question from them moving around different marketplaces they have to commit and lock up to participate it’s like stake versus not stake to that Marketplace to participate in that marketplace with see caveat that someone
(1:05:25) could potentially join a Marketplace and act as a vendor and this is determined by the marketplace but someone could theoretically join the marketplace without staking if that’s within the bylaws of the marketplace but they still don’t get the vote until they stake yeah I see that two separate things I see this do you think that you can draw this as a diagram like what you’re talking about right now details that you’re discussing do you think that you can make some visual representation it and put it onto this figma or a
(1:05:57) different figma yeah oh where where are you right now in I’m in Copenhagen okay how long are you coming back to CH my soon or no no I won’t be back in chm until August all right I can do a call with you next week we can spr that out and go through this I agree with pretty much everything you’re saying to be clear so okay yeah I mean so everyone can see it can can visualize what you guys are discussing yeah and the point I wanted on this call sorry even if the questions are not answered yet just like what the
(1:06:42) questions are and like where they fit onto some sort of like schema yeah I’ll take a crack edit B I know you’re probably busier than me you can no I can I can think about it this weekend as well no I’ll I’ll think about it a little bit today as well and but I I think it’s to to it’s basically like the Hamza da right is that what you you guys so to participate in a Hamza da you could James is suggesting to use load token to participate in I was just digging down because again it would like Spawn from
(1:07:12) this question of like okay we agree on R right and I was wondering like what does that mean so I think in order to receive the r you have to be staked or a particip ipant I don’t right like I think the discussion is how do you receive R can I write down what is r r is ratings or R is reward okay R is ratings marketplaces get to make decisions which indirectly influence your rating and then yeah actually I thought it was reward actually but yeah yeah all right I’m I’m going to I’m going to put put something together to
(1:07:55) clarify this yeah so emission schedule we’re not currently concerned with we’re not concerned about the toonomic burn rate or the on and off switch so to speak we’re concerned about the microeconomics of a specific Marketplace and the Lea they can P I think governance at this point is more important and who should govern is actually more important as well like vendors right I think I think that makes more sense we decentralized yep it’s definitely more decentralized and wider audience participants actors all right I’ll
(1:08:36) connect to you after Mike’s birthday I do have to go for now no I’m going to be there for my no thanks thanks yeah Tuesday some other things to deal with and problem yeah put something together thank you guys so much for the conversation who recording this can you send it to me directly I need to rewatch this okay yeah I I I got it awesome all right yeah let’s talk next week C okay good all right everybody have a good weekend all right all right [Music] cheers