As mainstream a topic as cryptocurrency can sometimes seem due to the enormous amount of media attention it has garnered over the past year, there are many cutting edge technologies that remain, for the most part, unknown, even to blockchain enthusiasts. One such concept is that of “curation markets.”
The first whitepaper on curation markets was written and released by Simon de la Rouviere, an engineer at ConsenSys. According to the whitepaper, curation markets solve three main problems:
1) creators of value often do not reap the value of the content they create
2) group projects — something as small as an open-source software project to an issue as large-scale as global warming — are notoriously difficult to coordinate when participants are loosely organized
3) there is an ever-increasing amount of information that needs curation.
In order to explain the second point, de la Rouviere borrows a game theory concept called “Schelling Points.” A Schelling Point (or Focal Point) is “a solution that people will tend to use in absence of communication, because it seems natural, special, or relevant to them.” In other words, it is the “thing” that groups of people congregate around without being explicitly told to. In the real world, it could be a church, a bar, or a community center. Here, it could be an idea, a hashtag, or a project.
Going back to the first point, in order for compensation to be received for work relating to advancing the goal of the Schelling Point, de la Rouviere proposes the tokenization of the Schelling Point via Ethereum smart contracts.
To understand how this works in practice, let’s take the example of a Reddit sub thread as the Schelling Point. If the concept of curation markets were applied to it, each thread would, in theory, have its own associated token of value. This token would be used to curate information inside the thread, wherein participants would “bond” the tokens to curators of the sub, who would then curate the thread’s content — perhaps in a similar manner to what a Reddit moderator currently does, but with added responsibilities — in accordance with their proportional token backing. For instance, if there are 100 tokens bonded to a sub, and one person has 30 tokens bonded to them, they would have a 30% standing in terms of curating governance. Ideally, there would be numerous curators per sub, each with a percentage standing.
In this model, you could bond your tokens to yourself or to another — in either case, you would not lose your tokens by doing so — based on who you thought would do or was currently doing the best job as a curator. These bond deposits can be shifted at any time, making the process of curator selection dynamic. Participants are incentivized to choose wisely, since their own tokens would increase in value with the performance of the sub, which in turn is driven by the performance of the curators.
In terms of token generation, tokens are minted continuously according to a price initially set by the smart contract. (The price of this token actually becomes more expensive the more tokens are in circulation, as it becomes more expensive to buy into the community the more popular it becomes.) The total sum paid for the tokens is kept in a communal deposit. At any time, participants can withdraw their token from the active supply, effectively “burning” it, in exchange for a proportional sum of the communal deposit, which would be denominated in the form of another coin (ether, for example).
The idea of curation markets gets interesting when applied to other, broader fields. If a curation market were attached to an open-source projects, it could be used to vote on new features and decide on pull requests. When applied to art, a curation market could be used to determine the creative direction of an artist collective, band, gallery, or even virtual world. Curation markets could even help monetize our ever-valuable attention, wherein participants — companies, let’s say — would need to buy your personal attention token in order to curate the type of ads you are shown.
There are also a small number of companies employing curation markets in their projects. Zap, for example, which uses “oracles” to connect real-world data to the blockchain, utilizes a curation market model to allow participants access to information. Anyone can create an oracle — essentially a feed with data from the real world (sports scores, for example) — on the platform. But in order to access the information it provides, participants must bond to the oracle using the platform’s proprietary coin, also called Zap. Bonding to the oracle produces a secondary token called a Dot, which is worth one query to the oracle. The success (and trustworthiness) of any given oracle is largely determined by the number of participants who bond to it, either to initiate a query for data, or to speculate on its future popularity.
The field of curation markets has grown steadily since de la Rouviere’s initial whitepaper in April of 2017, both in interest and application. As such, there are a number of offshoot concepts that have arisen, which we will take a look at next time in the Blockchain Spotlight series.
[Disclaimer: Nick Spanos, who is a co-founder of Zap, is also a co-founder of Cryptos.com]