Value exchange by anchor

Below is a short outline of an idea I’ve had to use Anchor to build a more sustainable exchange framework between long-term value creators and their consumers.

Consider the prevalent value transfer model: the producer offers some good or service, and the user pays for it with money or barter.

While the above works well for simple one-off transactions, it serves poorly in long-term transactions involving recurring consumption or delivery of future value.

  • Sellers of future value (Kickstarter, startups, ICOs) may not be incentivised to deliver on future value if they receive all funds upfront
  • Sellers of recurring value (content IP, SaaS software) have to rely on discounts to fair value to reduce churn

Long term incentive alignment can be achieved by switching out payments-in-principal with payments-in-cashflow with Anchor.

  • Fundraising: Instead of buying tokens in an ICO, investors can deposit UST into the project’s account so they can purchase tokens with cashflow over the course of the project’s development. They can exercise control over development by deciding to add / remove deposits.
  • Serial IP / Recurring consumption: Users can influence the direction of content production in episodic content (e.g. Netflix show) or serialized fiction by voting on story direction. Users can also influence the evolution of products with feature requests via governance.
  • Participatory content: Instead of randomly tipping creators to get participatory rights (e.g. live streaming, onlyfans, afreecaTV), participatory rights can be clearly quantified by size of deposits.

An architecture to achieve the above is trivial:

  • Any creator can create a deposit_contract with specified deposit lockup terms. The deposit_contract can direct the cashflow from aUST to addresses of the creator’s choosing.
  • Users can deposit UST to the deposit_contract and receive ownership tokens analogous to the LP token.
  • The LP token can later be used to redeem for project tokens, or to grant participatory rights to a project.
  • The Anchor yield being directed to the deposit_contract can share cash flows with a governance token to align incentives over the entire project.

I’m building this if noone else is.

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Sounds amazing. Could it be used for event financing such as music artists concerts or for fans to fund album creation by their favourite artists so it cuts out record labels and other expensive forms of funding and allows fans to have a direct engagement?

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Yes. Any relationship based value exchange could benefit from this - anchor unlocks new dimensions for payments and engagement.

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Just want to say this addition would insanely benefit Subsidium’s Cross Chain UST focused philanthropy model. Not only that but this helps teams bridge trust to public angels, rather than seeking private. A fair way to release and distribute tokens.

What an innovation, one that had been discussed by myself for a while. The doors just opened up.

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Heard this somewhere (can’t recall where) phrased as payments streaming.

It was described there essentially just as you did now. Instead of a full transfer (lump sum) or recurring transfers (subscription payments) we get ongoing micropayments in real time.

It’s a much better reflection of value transfer for so many services - common utilities, taxation, employee wages, local mafia bosses, almost anything that people make payments for regularly.

Found it (CMD+F for stream)

Interesting, i have a draft with a similar idea in my computer. It’s a no-brainer for fundraising imo. It’s not always possible to achieve consensus on which projects should be funded, and with how much. It would be more flexible for individual users to decide for themselves and direct a portion of earnings from deposits to a project/content of choice.

Only concern with integrating it into Anchor would be in case borrowing demand wouldn’t match supply, as it would dilute the Anchor rate. If that would be the case, the same idea could perhaps also be integrated directly into the staking architecture, especially if the incentive for value exchange happens to be aligned with Luna stakers.

Sounds great!

The anchor rate doesn’t get diluted :slight_smile: It’s fixed income

What about for micro loan contracts?

Can you unpack this?

A couple days ago I was thinking on something similar for the publishing industry:

An author (or a publishing house) wants to publish a book, however, they don’t have funds to do it.

They start a crowdfunding project, but they provide co-ownership to those that invest in the book. So that every time the books get sold (probably NFTs could work for this? or just a simple token?), the investors get royalties paid immediately.

Funds can be put into Anchor to generate even more money and they can be unlocked through some governance model.

This transforms the relationship of fan-creator to investor/co-owner - creator, which makes people more invested in the community and in the success of the project.

This can also be used in other digital platforms (movies, TV, streaming, etc.) where someone is trying to get funds.

Just throwing the idea here, since I haven’t code in years, but be assured that I can market it.

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With all due respect, if there were zero borrowers, fixed income on UST deposits into Anchor would also be zero, no?

if there were zero borrowers

from what I know theoretically yes, but there are incentives through subsidies that converge the lending rate with the target Anchor rate - but I guess thats not really the place to explain this, read docs

You thinking something similar to Republic.co?

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It sounds very similar to what occurs with life insurance agents and their commissions.
if you take that model you could potentially think of.

  1. Variable rate payments over time. (so they get larger amounts at the start, slowly going down to a trickle)

  2. Clawbacks where there might be a method to refund some of the payments if certain goals aren’t achieved

  3. Group incentives. where there could be a reward/incentive when it becomes more of a ‘crowd’ funding it vs an individual. this may not be achievable via reduction in fees based on the number of backers?

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I would be more than happy to do it

I recently helped create a project with this same underlying idea during the recent EthGlobal NFTHack hackathon.

Project: https://hack.ethglobal.co/showcase/lootvault-rechhSfa0w9xqd0f3
Demo video: NFTHack LOOTVAULT Final Demo - YouTube

The idea was as follows:

NFTs have been a big thing in 2021, but eventually the bubble will pop in some capacity, and in many cases, fans who bought work from creators / artists hoping for a quick $$ flip will instead be left holding the bag. Fans want to support their favourite creators, but a sustainable solution is needed. As a large YT creator myself, it is my responsibility not to burn my fans; I want to show that I value their support in me.

So, Kai, Grace, Michael, and I created LootVault. Fans would buy NFTs as membership passes, which store the value of the purchase price (in DAI) using Charged Particles. The CP protocol then yields something like 10% avg over a year, which would be paid out to the creator, and in return for holding the NFT, the creator could reward the fans with things like exclusive videos/streams/backstage access/cameos/personalised messages/etc etc. This is where Do’s suggestion of participatory content would come in also - allowing holders of the mem pass NFTs to vote on future content like what the next video topic would be for a YT creator for example.

The fan could then burn the NFT at any point in future to return their original payment price (in DAI).

Pushing in a similar direction with ANC makes a lot of sense to me and something I hope is explored further as the platform matures.

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5 out of 5 cheese covered nachos with chorizo for this one. Me gusta

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