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Freedom, Software, and Token Economics; a Short Story

· 6 min read
Chris Troutner

This is a fictional story about Bob and some software he set out to create. Bob is a libertarian. He loves gun culture and responsible gun ownership. He likes to drink unpasteurized milk. He's also a bachelor and would like to strike up a romantic relationship with someone in his local area.

Bob used to love the site He used to be able to trade guns, buy unpasturized milk, and peruse personal ads, but now he can’t do any of those things, because Craigslist removed them in order to comply with laws and veiled threats from the State. Bob would like to build a site just like Craigslist, but one that leverages decentralized technology, so that it doesn’t have any single point of failure for the State to shut down.

Bob is a competent software developer, but building a decentralized replacement to Craigslist is going to be a big undertaking. He doesn’t know how big, but feels pretty confident that he’s going to need help. He realizes he’s going to need to find other people like him. He needs to form a community that cares about the same thing he cares about.

Bob discovers the Permissionless Software Foundation, the PSF token, and the token-liquidity app that pegs the PSF token to BCH. He creates his own SLP token. Since he’s making a project for decentralized ads, he calls it the DAD token for Decentralized ADs.

Bob saw the crazy growth around the Spice token and other tipping tokens. He thinks that having a tipping token would be a great way to grow a community around his software idea. But he wants his token to have some kind of financial value, so that people take it seriously. He’s also fond of the PSF community and wants his token and community to be attached to this larger, like-minded community.

Bob decides to fork the token-liquidity app and use it to peg his DAD token to the PSF token with it. He’s talked to several members of the PSF that want to support his idea. They are willing to collectively stake $1,000 worth of PSF tokens to help him launch his idea. Armed with a seed fund of PSF tokens and a fork of the token-liquidity app, he adjusts the equations so that the initial value of his DAD token is $0.01 per token.

Bob is really happy with this setup. His token has a low price and low transaction fees, which makes it work great as a tipping token. It’s also loosely pegged to the PSF token, which means his project is financially connected to the bigger PSF community and even bigger cryptocurrency community. But the peg is pretty loose, so Bob and any other contributors have the potential to realize a lot of upside if their project is successful.

Bob goes about coding up his idea. He spends weeks working on it and gets a clunky proof-of-concept app up. He shows it off to the PSF community and talks about it to other cryptocurrency developers whenever he gets the chance.

Through these efforts, Alice learns about Bob’s project. She has her own reasons for wanting a decentralized clone of Craigslist, and starts contributing code to the DAD project, which benefits her own goals with the software. Bob is really happy to get high-quality code contributions from Alice. He tips her in the DAD token every time he merges a pull request. There is no formal agreement. Alice isn’t contributing code with the expectation of being paid. Bob is just tipping whatever he feels is appropriate, based on his own perceived value and what he thinks the project can afford.

Time goes on. Because of the partnership between the DAD project and PSF, the communities grow together. More developers like Alice join the project. Eventually the project improves the software to a point where it has a steady stream of users. Whenever a user places an advertisement on the platform, they pay some BCH, which goes to burn DAD tokens.

Bob runs his own site using the DAD technology, focusing on guns, unpasturized milk, and personal ads in his own state. Alice runs her own site using DAD technology, which focuses on trading cryptocurrencies. Other people run their own web apps leveraging the DAD technology, but they all have the DAD project in common.

The price of the DAD token starts to increase. At some point Bob starts to worry about the amount of money behind the token, and is concerned that he’s the only person holding the minting baton for making more DAD tokens. He reaches out to the PSF for help. The PSF helps him move the minting baton to a multisignature wallet, so that minting new tokens requires agreement of three-of-five of the top contributors to the DAD project. They also set up a multisignature ‘war-chest’ wallet to protect excess funds, so that all of the DAD project funds are not only in their token-liquidity app.

Bob feels a lot better. He’s found a way to share responsibility and liability with other top contributors that he’s built trust with. If the State decides to pick on Bob, or he needs to leave the project, the DAD project and its funds are safe.

More time goes on. Bob needs to step away from the project for personal reasons. He’s still happy to participate in the community, but he needs to significantly reduce the amount of time he spends on the project. Alice is still making great commits to the project, and agrees to take on the title of ‘maintainer’. The title isn’t too important because all funds are protected by multisignature wallets. If Alice ever needs to step away from the project too, she can easily pass on the ‘maintainer’ title to the next best contributor.

There is a steady stream of new improvements to the project, but certain areas are lacking, like dev-ops, unit tests, and documentation. These areas of work are tedious, and not nearly as fun as developing new features. Alice and Bob agree to focus their time on creating bounties to shore up the areas of the project that need more attention. They create tightly-scope code-bounties with the intention of generating small, easily-reviewable pull requests. Each bounty is tagged with a reward of DAD tokens. Alice and Bob share responsibility for creating new code-bounties and doing code reviews. They agree that whoever takes on the management and merging of a bounty gets 20% of the bounty in DAD tokens, to make it worth their time.

More time goes by. The individual contributions of Alice and Bob are less and less important to the DAD project as a whole. They've each realized significant upside from their contributions, and can take pride in making the world a better place. The DAD project takes on a life of its own. It has it’s own management of top-contributors, who direct the DAD token to balance intrinsic contributions to the code base with extrinsically motivated work on automated testing, reliability, and documentation.