This idea is neither mine nor new. Several people have mentioned it and there are many similar projects out there. However, I believe this solution still doesn’t get the attention it deserves so I’m repeating it here. This proposal aims to help with both funding and governance.
Basically, you donate to a BCH node implementation by purchasing its SLP token. The tokens come with perks like voting rights and dividends.
Here I use a hypothetical node implementation called P2Pnode as an example. Amounts given are also examples. I do not consider (or know) the legal implications in any particular jurisdiction.
P2Pnode creates the P2P SLP token. It mints 10,000 P2P. It initially markets these tokens at around $1 each. Users donate to P2P development by buying these tokens. P2Pnode continually dividends 5% of funds raised back to token holders. This initially gives token holders around a 5% return. P2Pnode team mint an additional 500 tokens each month (indefinitely). These are sold for their market value (a number can be held back to help stabilise the price)
As more tokens are minted the dividend amount per token decreases and then levels off (after 5 years it is down to 1.6%, after 10 years it is 0.84%, after 20 years… etc). These figures are examples. It could vary depending on the chosen emission rate and dividend %.
Besides simply wanting to support development, the initial high dividend rate not only incentivises early buyers, but also that those buyers go forth and evangelise the good word of P2Pnode in the wider community. Token holders can have additional privileges like voting rights, or an exclusive on-chain memo style forum where token holdings are displayed and development is discussed. You could also ‘support’ P2Pnode by accepting P2P token at your online store as this would give the token further value. Other features like token burning in exchange for dev/agenda time could be implemented. Maybe the tokens could even unlock special features in certain wallets or apps.
Yep, ‘cash-back’ seems like a peculiar incentive, but consider the following -
Dividends financially incentivize holders to act as advocates for P2Pnode.
Whales are encouraged to purchase tokens as they get a small but steady long term return.
Even small (but reliable) dividend paying SLP tokens are attractive assets. P2P node now holds the monopoly on a saleable commodity!
It garners attention in the project from outside the community. Passive income is hot-topic!
It helps raise interest in the wider SLP ecosystem. Despite the long standing technical viability, there have been comparatively few examples of established dividending SLPs.
With these dividends, P2Pnode is ‘paying’ the token holders to promote their service, participate in governance and provide community feedback. Likewise, in purchasing tokens the holders are ‘paying’ the P2P dev team to maintain a BCH node imp. If both parties do their jobs well, then the whole BCH ecosystem will benefit.
While dividends are a small incentive to the holders, the major advantage here is stability for BCH.
Democracies, despite their flaws, are a lot more stable than dictatorships (even benevolent ones). For any radical change, the P2Pnode dev team would have to have the support of the majority of their token holders. To do otherwise would be financially ruinous as the value of P2P token would depreciate. In short, it would reduce/eliminate unpopular forks.
Since P2Pnode is dividending 5% to holders, it would in the absolute worst case scenario be 5% worse off than if they continued to rely only on traditional donation methods. This would improve as time went on as it could hodl some of its own tokens. But, more likely since it now has an involved and incentivised community behind, it will be financially better off.
Buy from me instead!
Would the fungability of tokens mean that people bought them from each other rather than purchased directly from P2Pnode? Maybe, but this fact does not mean Bitcoin has no value. Do you buy BCH directly from miners? Either way, buying directly from source is no less an altruistic act then simply donating.
Since you are paying dividends out of token purchases could you justly accuse the whole thing of being a Ponzi? No, the P2Pnode team are producing a valuable node implementation. This is the ‘product’ that is being sold. Bottom line, it is no more or less a Ponzi than Bitcoin itself.
True, token holder projects have a ‘colourful’ history https://news.bitcoin.com/token-holders-dont-give-damn-voting-rights-community-governance/ , but there are many positive examples too, https://psfoundation.cash/ (i first heard mention of the memo style forum for token holders in relation to PSF token)
Most of us here believe Bitcoin Cash is the good stuff. We buy it, use it and sometimes profit from it, all because we believe that ultimately it adds value to the world. Community backed node implementations can be a microcosm of that. We would have a token that we buy, use or trade because we believe that a particular node dev team adds value to the BCH ecosystem. If they are successful then BCH will be successful. If BCH fails then they will fail. If they succeed spectacularly then token holders may even profit. All incentives are correctly aligned.