Re: [ANN][PRE-ICO] Narrative - One of the First 10 Token Sales on NEO!
The news just keeps on coming! We're changing our token symbol (slightly): https://blog.narrative.network/out-with-nrv-in-with-nrve-8991629bc80c.
Hello Rosemary,
With the public sale imminent, I'm finding myself needing to ask a few questions before I take the plunge with Narrative. I know there is very little time left before the sale, but I'd really appreciate it if you were able to reply in time!
Think of me as a Fox Mulder 'wanting to believe', but needing to be skeptical. I also know a number of individuals who right alongside me have wished for something like Narrative to come along for the past fifteen years - I want to contact them and make sure they are on board - they are upstanding individuals with great contributions to make - but these questions are holding me back.
First question
It is highly speculative for people to bid on niches with zero metrics or past performance of the Narrative network to go on, to ascribe reasonable value.
The platform is not operational yet, but the community is being asked to bid against each other over its real estate. I am not adverse to speculation per se, but we have to be sensitive to the degree of speculation here. We all want cryptocurrency and blockchain to thrive. Before true mass adoption can take place, the negative stigma of excessive speculation needs to be overcome. The NEO founder has nodded towards this reality and I applaud him for it.
So my question is, isn't it multiplying the speculative nature of your platform to do an ICO with no MVP (minimum viable product), and then ask the community to give back many of the speculative tokens they just bought from you, in a second round of speculation, still with no MVP, and with no concrete notion of the returns the niches will generate?
I'm sure it was considered during development meetings, that initial niches could simply be reserved for a nominal fee, on a first come first served basis, and I'm wondering why this option did not get chosen.
Second question
Also concerning niche 'ownership' - it would be more accurate to call it niche leasing. Is it fair to tell people they will own a niche after paying the highest bid for it (potentially a large sum of money), when in fact they have to pay annual fees in order to keep it, and if they don't, the Narrative organisation gets to auction it again to the highest bidder?
This concerns me on a number of levels.
First, the so-called owner of the niche pays an upfront, auction-determined purchase price for what is actually a lease.
Then the so-called owner puts effort into developing the niche, finding the best moderators, attracting the best content. They add value to their 'property' which should be on-sellable should they choose to cease to 'own' it. You buy a house, improve upon it: you expect to be able to profit from those improvements - nothing complicated here. But with Narrative, the 'owner' loses any value they have added to the niche if they decide to no longer own it, because they can't sell it, from what I have gathered from your white paper. It sounds like the true owner, the Narrative organisation, gets to have its cake and eat it too: it 'sells' niches to the community, and leases it to them at the same time, while keeping ownership of the niches, and the possibility of selling the niches over and over again via auction.
So the question is - what am I missing here?
I want this to be a misunderstanding because I really want to have confidence that the Narrative Content Economy is being set up with a fair, optimally decentralised ethos. This aspect clashes with the ethical ideal of a decentralised economy, and also seems to be being described in misleading terms (ownership instead of leasing).
Third question
There is mention that niches may need to go through a second approval process long after niche reservations, when the platform actually launches. How will this be managed, after the community has bid upon and secured potentially expensive niches? By then, many will have done leg work contacting and screening potential moderators, researching methods of attracting quality content etc...
Fourth question
Would you be willing to consider the following option, and report back publicly on your decision and the reasoning behind it?
- Initial niches are reserved for a nominal fee, on a first come, first served basis, with the person who suggested the niche naturally getting 'first dibs' (or first right of refusal).
- The person who purchases the niche becomes its real owner, not a leasee. She can still pay an annual 'platform' fee, but if she fails to pay, or if she chooses to sell the niche, the niche is auctioned to the community and the proceeds are paid to her, not to the Narrative organisation.
In this scenario, such auctions would only be allowed to occur well after the platform is launched, so that bids on such niches would no longer be anywhere near as speculative.
Conclusion
This is your project - you have worked hard to bring it to the point it has reached, and the community is watching on with the hope that you - indeed we - succeed in creating a fair, truly decentralised content economy.
I hope you will take these observations and questions in the spirit of constructive criticism, and see them as an opportunity to embody the ideals of fairness and transparency you have spoken of and enthused us with.
Thanks for the questions!
Regarding Q1:
We actually feel the system we are going with is the fairest possible way to do things. If we only charged a fixed fee, then potentially valuable "real estate" would be locked up by users for essentially pennies on the dollar. This way, if more than one person wants a particular niche, they can compete for it fairly, using a market-driven approach. It's true that no one (not even us) knows the true value of these niches prior to the launch of the complete platform and that's why this approach is fair. A user should only bid what they think is fair value.
In addition, keep in mind that ultimately it is the community that benefits because all revenue from the niche ownership fees goes into network rewards, to be returned to network participants.
Finally, because we are limiting the number of niches that any one user can own or bid on at any time, we expect that to reduce the amount of wild speculation. If I already own 3 niches, I can only have active bids on two niches, since there is a limit of 5 niches per user (owned or bidding on).
Thus, I would argue that the bidding system we have enacted is completely fair and ultimately beneficial for the network as a whole. If one person thinks a niche is worth $1,000 (in tokens), as opposed to the base rate of $75 (in tokens), for example, that entire fee goes into the community pot for redistribution, leading to more revenue for all participants.
Regarding Q2:
We call it ownership because you essentially earn royalties based on the content contained in your niche. It's kind of like home ownership with a recurring mortgage payment, I suppose.
We like the term "owner" because of the obvious benefits you receive, whereas a lease does not usually convey such benefits.You said that the "Narrative Organization" gets to auction off non renewed niches, but that is a misstatement. The organization has no role in this process. And the revenue collected from the niches- for new niches and for renewals- goes into the Network Rewards pool, which is distributed to all network participants, like all network revenue is.
Regarding Q3:
It is still TBD as to whether or how a re-approval process might work, but obviously if the community later rejects a previously approved niche prior to launch, the niche fee would be returned to the owner. It is likely that very little work would have been put in by the owner, since this would presumably happen before the launch of the network. But again, this is not even something that has not been decided yet; we simply mentioned it as something that is still under consideration. Also keep in mind that the community can revoke any niche, even after approval through an appeal system... in fact, if we do not require a re-approval on the early niches, then we will likely just rely on that mechanism. We also do not expect a high rate of rejected niches in either case.
Regarding Q4:
We like the model we have in place, for the reasons I gave above. I don't see that changing for Chaucer. We will always consider feedback during the alpha period, of course... and ultimately the Narrative Committee that will be put into place (comprised of community members and narrative staff) will have the power to make structural changes to the way things work, if it is deemed necessary.
I also want to reiterate again, since you have mentioned it here too... these fees are NOT PAID TO THE NARRATIVE ORGANIZATION. They are paid to NETWORK REWARDS and distributed to everyone who qualifies based on the network rewards payout formula. The organization receives only 15% of that revenue, while 85% is returned to the network users.
Thanks for the feedback... I hope it helped. And please feel free to keep that feedback coming!