After
numerous AMAs and webinars, we have found a few common misconceptions
regarding OPEN and we want to address the most widespread among them:
the developer growth pool and the network gas fee.
The
Developer Growth Pool is the mechanism that the OPEN network will use
to grow our community and to get into the hands of every application and
user that wants to integrate cryptocurrency payments. The method of
airdropping to incentivise users is not new to blockchain, or to Silicon
Valley. In fact, the Developer Growth Pool is doing what venture
capital in Silicon Valley has been doing for the past decade — providing
projects with capital that the project then turns around and
distributes, for free, to its customers in order to win them over. The
enormous success of such strategies is exemplified by the growth that
PayPal and Uber have experienced by offering new users in-app monetary
incentive to use their platform. When a company is able to capture a
user base by employing this strategy, it can go back to the venture
capital funds who then provide them with more capital for further user
acquisition. This cycle is repeated until the project has captured a
significant portion of the customer base, at which point the project
typically tapers off such giveaways.
At
OPEN Platform, we are employing a similar approach. Our “airdrops” are
an analogous strategy to what Uber and PayPal have been doing to achieve
their enormous success. In fact, the blockchain provides an even more
robust method of giving back value to the customer because it enables it
to be done in a far more transparent and efficient manner.
It is important to understand that not a single Satoshi of that 3% fee hits the wallet of anyone at OPEN.
Since the Developer Pool exists on the blockchain, we can guarantee
this by providing an auditable record on the blockchain. Furthermore,
any additional funds beyond what is required by the Developer Growth
Pool are refunded back to the developers from whom it was taken from and
that process is governed by transparent smart contract logic.
There
are, however, key advantages that traditional companies have that
blockchain projects do not. Silicon Valley, on proving success in
acquiring users, can always come back to VC funds that are readily
available to provide mountains of capital. Blockchain projects do not
have that same luxury, so such a mechanism needs to be baked into the
protocol like it is with OPEN Platform. We decided on a 3% fee initially
because we need to be aggressive in scaling. This is a lesson
application developers have known for quite some time, but blockchain
projects have yet to catch on. It is important to highlight that the 3%
transaction fee represents the ceiling on what can be charged — whenever
the Developer Growth Pool is full, the excess is airdropped directly
back to the developers. These “airdrops” are essentially refunds, but
they occur immediately, this means that as the community grows and
growth is not needed, the fee will be decrease towards 0.
Once
OPEN has reached inflection points of scale, we will also permanently
reduce the fee to precisely the minimum the network needs to keep going.
This means that the 3% is only an initial starting point, with the
eventual goal of having only a fraction of a percent fee baked into the
protocol to sustain any development and scaling the network needs.
We
recognize the necessity of such a scaling mechanism because our team
has built numerous successful companies and knows how to separate white
paper theory from the reality of the work required to achieve true
adoption. This is something token economists of blockchain projects will
soon realize is incredibly important when it comes to building
successful decentralized networks.
A
lot of projects are also doing what OmiseGo started and are uniformly
airdropping across an entire blockchain to wallets that have a specific
balance in ETH. This mechanism was innovative for its time, and a big
step forward in how blockchain projects think about scaling, but it
still has room to grow. Uber isn’t really willing to give free credits
to just anyone — only people willing to sign up onto their platform,
with other incentive mechanisms to promote their first ride and keep
them going. Similarly, at OPEN we aren’t blindly airdropping to everyone
blockchain, but are airdropping only to developers and applications
willing to integrate our API and SDK toolset. By being strategic about
it, we can be more efficient with our token and create a powerful
community.
We understand that this is quite different from what other projects are doing, but it is something that is necessary to:
- Build strong networks
- Promote widespread developer adoption
- Catalyze a revolution on the scale of our ambition.
Our
fee structure will never be used to fill our own wallets and is
designed to be minimized. We hope this provides clarity as to what we
are doing with our Developer Growth Pool and initial 3% gas fee, but
please feel free to contact us at anytime on our various community
networks. If you’re a developer interested in OPEN, don’t forget to sign
up for our Developer Program.
Let’s
empower developers and allow cryptocurrencies to reach their potential
far beyond what fiat currencies of the status quo are capable of!
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