Personal Tokens (2020 Edition) & Social Reputation
Recently, the topic of personal tokens started gaining traction again in the blockchain community. This is particularly driven by new tooling and platforms (such as Uniswap), enabling easy trading of personal tokens. This is a far cry from 2014, when I first proposed ideas around personal tokens. Back then, the only way to experiment with this was to launch your own blockchain. Glad times have changed.
New examples of personal tokens take various forms. I'll explain some of them, and then propose a new variant for liquid, social reputation tokens. This comes after discussions on Twitter with Jesse Walden, Reuben Bramanathan & Manu Alzuru.
Service Tokens:
Most personal tokens currently out there experiment with selling time/resources.
- $BOI is a designer selling design work.
- $PEWPEW is a token that is redeemable for retweets on Ameen Soleimani's timeline.
- $RCLE is a lawyer selling legal services.
- $YUNG is a designer and engineer.
- $MAGIC sells consulting on DAOs.
Following Saint Fame DAO ($FAME: an internet-based fashion house) on Twitter shows how this blockchain-based organisation is buying personal tokens, then expending them with the people for their services.
$RCLE
$BOI
$YUNG
$JULIEN
Whether doing things like this is economically valuable or meaningful is up for debate. Why have a separate token, vs just selling one's services out right into the market? Having some external token tied to one's services does allow the market to value the time and skills (and not yourself).
Since the beginning, however, I felt that personal tokens thrive primarily on its ability to capture NEW kinds of value, not just it being backed by services or resources. In the past, I've proposed using personal tokens to build value around the memetic network effect of a person. The tokens become skin-in-the-game to curate information around the person-as-a-topic. Another good example, I've found is the ability for the tokens to influence decisions in a person's life. The pre-blockchain pioneer of this is Mike Merril, having his 'shareholders' vote on his life decisions. Another, blockchain examples Jonas Lundβs art practice, where token holders can influence the practice.
This can seem a bit extreme, because in order for these tokens to have value at all, the person should adhere to what the shareholders want you to do. So obeying it, makes the value go up, which isn't necessarily a desirable situation. Shareholders CAN constrain you: even when votes are voluntary on part of the person. If your livelihood depends on what your token holders care about, you would be inclined to do that. It does still however allow people to sell value they own without resorting to traditional, financial tools such as debt.
With debt, you sell your future earnings to leverage your present. With personal tokens such as the above, you sell SOME of your future time to leverage your present.
Social
Seeing the personal tokens thrive in a niche community is interesting, because it feels like it represents something more than just bringing liquidity to services offered by various people: it's also social. And I think that's perhaps the most interesting part of all of this.
Can personal tokens enable new agency through enabling stronger forms of social coordination?
That's what a big thesis of mine has been, ever since I've gone down this rabbit hole. Merely holding a token is a signal of intent. The problem is, is that this signal gets lost in the noise of whatever else the tokenβs utility is. Even within larger cryptocurrencies, holding ETH or holding BTC *means* something above and beyond its technical and monetary utility. Heck, this is even the case with fiat: holding USD, despite its monetary value, implies a signal of trust in the US government.
Reducing a token to represent social signalling value, in order to experiment with it, has been a constant theme of thinking of mine for years. There's always interesting permutations and experiments to be had. I want to propose a version that was inspired by discussions on reputation with Eril (at ETHSanFrancisco in 2018).
Social Reputation Tokens
If I minted 100,000 $SIMON and gave it to friends, they might feel inclined to collect it: to merely hold it and say that they own this collectible. It has no implied monetary value: merely a social, collectible value. How it is issued is important when it comes to social collectible value. If it is merely airdropped to many Ethereum addresses, it feels meaningless, since its value is spread amongst holders that don't care about. Itβs like saying you are holding an exclusive party, but having an open-door policy. Thus, if I'm a recipient of a social collectible, what does it mean? What does it stand for? Thatβs important.
A proposal by Reuben Bramanathan, is to give it away as forms of gratitude: thanks and appreciation. I enjoy that. I had a similar idea, but with an extension that enables the social tokens to exist ONLY when it provides social value. In other cases, incentives would force it to disappear and be removed from circulation.
In short: a person extends personal gratitude tokens that only they can mint from a bonding curve.
A person mints a personal token (say $SIMON), from a bonding curve, by putting up some collateral (say ETH). Only they are allowed to do so. With this newly minted token, they then can send it to whomever as a form of gratitude/thanks. Because this token is automatically backed by collateral in the bonding curve, the recipient can choose to sell the personal token whenever they wish. The recipients would always be in profit since only the issuer carries a cost. If the recipients choose to hold it, it is because it has value to them above and beyond the underlying monetary value it has: thus, in this case, the social value of the token. They could also hold it because they believe that the price will accrue if the issuer continues to issue new personal tokens. This latter component will matter: when and how the issuer mints new tokens. What you want is that people who hold the personal token to keep for its primarily, additional social value.
A question that someone might ask is: why do this at all? Why would the issuer give away tokens in such way? What's the benefit for them? They are undergoing cost to lock up collateral (ETH) and giving it away if people redeem it.
There could be a few reasons:
- Inherently, this is a form of a grant/tip/donation since it has backing value. Thus: the issuer can choose to build a leveraged network of influence.
- Collectible value. Making something that people want to collect & hold is cool in itself.
- Benefits to their network. This is always a use-case. Those who hold it can get certain access/privileges.
The primary value proposition for the issuer should be: the benefit of creating a desirable social token accrues to my social benefit MORE than the cost of the issuance.
I think this holds, especially when you consider that this could be extended to more forms of reputation (which is discussed later).
Fungible vs Non-Fungible
The question of a social collectible, might work better if it's an actual collectible, not a fungible token (eg, fans like owning merch). I've explored in the past around using a bonding curve to create an automated economy around collectibles. This would work almost exactly the same as describe in this blog post, except: if someone wants to sell their collectible NFT into the bonding curve it would first create an auction such that someone else can buy it, before it's destroyed and removed from circulation.
Reputation?
If the incentives work, the idea of marrying social tokens to a bonding curve means that those holding it, would value it for the meaning of the token, beyond its monetary value. This can be extended by having the token represent something more than just an individual. It's a label that's issued by someone. Those together (issuer + label) becomes its combined value. In other words: if someone else issued their own $SIMON, less people would hold if it, compared to if I issued $SIMON.
The extension of this is to have different labels potentially mean different layers of reputation. In other words: what about $SIMON.GREATCODER? If I give this to someone and they choose to hold, it means that me, Simon gave this to a great coder. If I make sure that only great coders receive this token, those great coders would choose to keep it due its signalling value. If they think the signal is bogus, they could just sell it. If they think I gave it to bad coders, they can just sell it into the curve.
Would you keep a $VITALIK.GREATCONTRIBUTOR?
Modifications & Open Questions
This is a baseline idea. One issuer, issuing labels that have social value on a bonding curve. If it does not have social value, then the holder can dispense it for more liquid underlying monetary value.
1) I'm not entirely sure if transferable is preferable?
My gut leans to saying no because the point is that the label should stick with a specific entity.
2) Why a bonding curve and not just 1:1 issuance?
Social games often rely on the creation of focal (schelling) points: things we think others would also think about. We are more likely to go somewhere, together, if we believe others are also inclined to want to go to the same destination.
1:1 issuance, where all issued labels have the same value over time, creates a weaker focal point. If thereβs the belief that the social label might accrue in value whilst the holder chooses to hold it, it boosts the signal. The negative side of a bonding curve issuance is that the label might lose its monetary value over time, and thus the holder might choose to sell it prematurely, despite wanting to keep it for its social value. This is somewhat negated by the fact that the holder is never the buyer. So, the difference is: βShould I keep this free social signal I received for $10, or should I keep this free social I received for $5β? Itβs still a free social signal.
I might be wrong and 1:1 issuance is simpler.
3) Can the issuer make some money?
Thereβs myriads of ways to explore modifying this such that issuer receives not just social benefit back to themselves (through creation of a meaningful label), but also monetary value.
If the social tokens are sold, some percentage of the released monetary value goes to the issuer. If the issuer mints some and keeps it to themselves (as long as its predictable). If the label is valuable, paid requests can be created (because they really wanted). The latter is close to how awards programs work.
Conclusion
All in all, personal tokens have always been an interesting rabbit hole. 6 years ago, it got me to invest all my time and effort into cryptocurrencies and I still feel there's a lot more to explore. Utilising it as a social reputation token backed with collateral is one such way to look at it.
