Curation Markets

Basic Idea

Curation Markets (CMs) is a model that allows groups to more effectively coordinate & earn from value they co-create around shared goals. Each topic/meme/idea/goal has an associated token of value that is used to curate information inside it. [Ref]

CMs are characterized by a bonding curve, which relates the price of a derivative token to its supply.

Here is an example of a quadratic bonding curve where currentPrice = tokenSupply² (from here):

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When a user wants to buy 10 tokens, the contract mints 10 new tokens, computes their price and sends those tokens to the user in exchange for Ether (or another reserve token).

How It Works: An Overview

(From here)

The basic premise of curved bonding is as follows:

  1. With a specific token (eg ETH), you can buy a new token (eg #projectToken) through a smart contract. The ETH is kept as deposit within the smart contract. It’s not disbursed to any particular person or team.
  2. The buy price is determined by the current supply of the new token (#projectToken). The buy price is hardcoded according to some algorithmic curve.
  3. At any point in time, someone can sell back their #projectToken into the communal pool and get out an appropriate reward that is set by a sell curve.

This setup means that #projectTokens will form and dissolve as necessary. If everyone leaves, all ETH will be refunded and all #projectTokens will cease to exist. If you buy in early, you will get more tokens for the same price. If you buy in later, you will get less tokens for the same price. If you sell back into the pool, you will get less ETH per token vs selling back into the pool when the outstanding supply is higher.

The value derived from curved bonding is that it rewards participants for being early and buying tokens in that project. If they leave at a later point, selling their #projectTokens back into the communal pool will net them a reward. The reason you want separate tokens for separate projects is so that it more easily fits the value being produced from these separate projects. The crypto-economic feedback loops necessary to sustain certain systems will only work if the value being produced is mapped to its own token.

Key References

Design Guidelines

CM Variants

Example shape variants:

  • Vary the shape. Linear, flat, piecewise linear, quadratic trending up, quadratic down, exponential, sinusoidal, etc. Each has remarkable characteristics!
  • Make sell price lower than buy price (hysteresis). Give the difference to special parties, eg creator or charity or project founders
  • Special mechanics to buy into the curve. Eg TCR.
  • Special mechanics to sell from the curve. Eg add delay. E.g. to avoid pump&dump.
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[Image Ref]

CM Applications

Projects:

Ideas:

  • Topic filtering/curation, monetizing open source projects, personal attention markets, decentralized bands, collectively curating decentralized, virtual worlds, topic-based AR filters, dank meme markets, an art-creating decentralized bot, the Grand Curation Market & Registry. The original post elaborates on each.
  • "Arcade Bazaar" proposal Low-friction fundraising (ICO replacement)
  • Funding donations
  • Protect the commons (e.g. forests)

Relation to Automated Market Maker Mechanisms

Automated market maker mechanisms (aka liquid/smart token) like Bancor and Uniswap are basically curation markets with a restricted range of parameters. Therefore developments in those can help developments in Curation Markets, and vice versa.

Code

CM Community

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