Extending TCRs to provide a high quality investment & donation vehicle
“Lists are how I parse and manage the world.” — Adam Savage
Token Curated Registries (TCRs) can be leveraged in an infinite amount of use cases dependent on high quality curation focused on any amount of niche verticals. Many applications are leveraging the framework as the foundation for their blockchain architectures pairing curation with content development, moderation, and now, investing.
What I’d like to propose are some ideas that Mike and I have thought through regarding the development of “Investable Token Curated Registries,” (ITCRs) through which the initial TCR protocol is extended and consumers of curated content can interact with zed content in a transactional way. This could mean investing in top curated startups via a more decentralized (albeit not completely) funding mechanism or donating to impressive social impact efforts around the world that have been curated by the world’s top philanthropists.
What is a Token Curated Registry
Of course, I’ll still provide a quick and dirty summary of what TCR’s are and what they’re used for so that everybody’s on the same page.
What is a Token Curated Registry?
Token-curated registries are decentrally curated lists with intrinsic economic incentives for token holders to curate the list’s contents judiciously. There are three user types in a token-curated registry and each has different interests, incentives, and interaction patterns towards the registry. Consumers desire high-quality lists. Candidates desire to be included in such lists. Token holders desire to increase the price of the tokens they hold. Token price increases as the utility of the list increases.
What do TCRs do/How are they useful?
The product or output of a token-curated registry is a list.
How can TCRs be applied to investment?
Curating high quality lists of social impact projects, startups, or even nonprofits empowers investors and donors to fund high quality efforts with relative ease. The mechanism also democratizes access to investment, grant making, and donation opportunities to those who wouldn’t normally have such high quality visibility into that opportunity.
Why do TCRs need their own token?
The utility of the token is directly correlated to the usefulness of the list the TCR curates.
What are some active examples of TCR being used?
Investable Token Curated Registries
An additional layer that can overlay a ‘traditional’ TCR would be one that empowers consumers to interact with the listings in a different way. By making TCR listees ‘investable,’ in that consumers could bet, donate, and or invest into the content being curated, we introduce new incentives for common agents that engage with a TCR:
- Consumers — Additional incentive to invest in projects for an expected ROI based on the success of the project (simplified, tokenized SIB)
- Curators — Increased utility to the TCR token, now that investments are being actively made based on the curation of the list
Once Investable TCRs (ITCRs) are developed, the beginnings of a TCR based exchange start to appear, in which the system would need the following:
- New set of Evaluation Agents to ensure the accountability of service providers applying to be listed on the TCR once investors put a stake into their (the service provider’s) projects
- Staking mechanism that Investors, Service Providers, and Evaluators alike must submit to further enforce accountability and security in the system
- A second token, ideally representing a strong store of value, to be ‘invested’ into the curated listee
The ITCR architecture is the same as the TCR architecture with regards to how an applicant pays an application fee to become listed on the registry. This ‘applicant’ can be a project, a startup, a nonprofit organization, or even a ‘bet’ indicating one possibility of many possibilities regarding a specific event that the underlying TCR is curating for. Of course, dependent on the context of use, there may be post-registry expectations of the newly added applicant.
For example, in an investment scenario where startups are being curated on the list, investors will expect evaluated progress submitted by the startups they invested in, meaning that startups would need to submit their metrics and have those metrics evaluated on a periodic basis.
In another example, donors could be donating to a curated list of social impact projects or nonprofits. In one scenario, donors could have the expectation that the project or nonprofit show proof that the funds are being applied to the correct expenses, which would, again, require an evaluator. However, in a second scenario, the donation could be made freely, relying on the quality of the curated registry, with the assumption that projects or nonprofits that make it onto the registry are safe to donate to. The latter scenario could become quite interesting, because donors could receive special vanity tokens specific to the project/nonprofit in return for their donation — which takes a different spin on ‘ROI’ for philanthropy.
The novel interactions that a ITCR introduce are the following (in chronological process order):
- “Investors” staking “Candidate” listings to provide up-front funding for the listee. Investors do not need to expect an ROI (return on investment) or deliverable (milestone or metric) from the listee, and can simply be donors if that’s the case
- “Evaluators” staking “Candidate” listings to evaluate project milestones and challenge claimed progress if necessary. Evaluators are only needed if their is a specified expectation from the “Investors” of that listing (ROI or a deliverable)
- Arbiters assessing validity of milestone challenges made by “Evaluators” to ensure that evaluating agents aren’t purposefully colluding against the listee
A Conclusion on Investable Lists
As our team delves into the application of ITCRs to support Social Impact Bonds (SIBs) and Development Impact Bonds (BIBs) on-chain, we will find better ways to generalize the protocol to work for more use cases. By adding evaluation agents in addition to TCR curation agents, we start to see a second level of accountability develop through which consumer of the registry can interact more intimately with listees. Stablecoins like DAI are an excellent tool to invest and or donate using this mechanism, but consumers can commit funds in any denomination they see fit. As we deploy a few use cases into the world, I’ll keep you up to date on how ITCRs progress!