A token isn’t required for a thriving ecosystem Gitcoin sounds like a token. I know. But… it isn’t. Let’s explore the landscape of tokens, when we believe a token is warranted, why Gitcoin hasn’t fit into that category, and what might change our perspective.
Gitcoin sounds like a token. I know. But… it isn’t. Let’s explore the landscape of tokens, when we believe a token is warranted, why Gitcoin hasn’t fit into that category, and what might change our perspective.
About a year ago, Balaji S. Srinivasan and Naval Ravikant posted their early blog post on the token economy.https://news.earn.com/thoughts-on-tokens-436109aabcbeAmongst many of the points made, the following have proved to be the most timeless.
As we’ve watched the year play out, we’ve gotten a chance to watch useful tokens rise to the top of the token economy. Great minds have expanded on concepts like token curated registries, bonding curves, and the future of tokenization.
Mike Goldin’s ‘Cryptosystem’s Manifesto’ also remains salient in our minds today.
There are plenty of scenarios in which tokens meet these standards. Quite a few projects who meet these standards have made their way onto the Gitcoin platform, including DAI, WYV, ZRX, and more.While most projects (including Ethereum) haven’t gotten to the ‘self-sustaining’ phase, it’s clearly the goal. Many in the community speak of the increasingly blurring lines between the Ethereum Foundation and the community.
However, in the wake of these incremental steps forward, many token launches failed. While this hasn’t adversely affected all teams, some combination of the following affects token launches.
When spending time deep in Ethereum developer communities, it’s easy (and frankly, healthy) to drown out the noise of all the ICO’s which launch without real utility. However, it’s clear that many of these projects have fallen into the above traps — either maliciously or by fooling themselves.
The first principle is that you must not fool yourself — and you are the easiest person to fool. — Richard Feynman
We didn’t launch with a token because we believe there are better paths. A Gitcoin token is not a ‘necessary element’ of a OSS bounty network offering (our current offering). We wanted to focus on product-market fit, not legal, regulatory, and investor relations. We’re grateful for opportunity to be a part of ConsenSys, where we’ve been given room to experiment. This, ultimately, has been one of the most important strategic decisions made for our network.We hypothesize that developers and funders will tend towards the most frictionless and value-creating product experience with the strongest community, and we’ve been hyper-focused on building this experience.
If, in the future, we sense that there is a utility value to having a token which a) meets the criteria above and b) enhances, rather than detracts, a user’s experience, we remain open to these models. There may be future path’s for Gitcoin where a native token could be a necessary element of the model.However, this, today, is by no means a sure thing. If it does happen, the Gitcoin community can be assured that it will be because it improves the functioning of the Gitcoin network, rather than detracting from it’s usability.
History does not repeat itself, but it often rhymes.
Did you know that ERC-20 is the standard for tokenization on Ethereum’s blockchain? ERC-20 provides the necessary functions which a token contract must have to interoperate with other dApps, wallets, and exchanges.While ERC-20 was one of the first standards on Ethereum, quite a few proposals have been made since. All proposals are technical in nature, but a few also have implications (like ERC-20) on capital, assets, and revenue for dApps and users in Web 3.
ERC-721, which is almost finalized, sets a standard for tracking and managing scarce assets. From the ERC:
NFTs can represent ownership over digital or physical assets. We considered a diverse universe of assets, and we know you will dream up many more:
— Physical property — houses, unique artwork
— Virtual collectables — unique pictures of kittens, collectable cards
— “Negative value” assets — loans, burdens and other responsibilities
In general, all houses are distinct and no two kittens are alike. NFTs are distinguishable and you must track the ownership of each one separately.
Disclaimer: Kevin Owocki of Gitcoin proposed and is working on this proposal.In the SaaS model of the past, subscription models have consistently been a reasonable business upon which valuable businesses can stand.In Web 2, a common business model is subscriptions. A famous example is Netflix — A consumer pays $9.99 a month for the service and can cancel anytime. Purchase decisions are easy because there is no complex whitepaper to read. The company will have consistent cashflow, know their churn, and therefore can plan many years into the future.A great team, including Kevin Owocki, are working through this possibility within Web 3.https://news.earn.com/thoughts-on-tokens-436109aabcbeWe encourage others to keep an eye on the EIP and ERC standards. It’s a place for discussion, debate, and progress. Who knows what the rest of 2018 might bring?
Balaji’s post from last year was subtitled ‘tokens are early today, but will transform technology tomorrow’. One year later, this is still true. As ERC-721 and EIP-948 show us, we are still in the early days.Gitcoin continues to be actively involved in experimenting with token standards, and are even more excited for the next wave of ideas. In the meantime, we plan to continue placing a high emphasis on shipped product and infrastructure tooling in the ecosystem (see our EF grant).We feel strongly in our choice to hold off on a token launch as a means of fundraising, as it ultimately must also be a non-trivial portion of a business model. We’ll continue iterating upon community standards, considering tokenization, and most importantly — #BUIDLing a product which brings value for the community.
https://news.earn.com/thoughts-on-tokens-436109aabcbeTo learn more about Gitcoin, click below. We welcome you on our journey to grow open source while changing the way we work.