Please describe your proposed solution.
A: Extended Problem Statement:
Free journalism is the foundation of a functioning society and democracy. Today, the mainstream media are facing a major crisis of trust. Declining readership is the result of a lack of trustworthiness. Due to the rapid increase in fake news, it is becoming more and more difficult to assess the accuracy of information and the trustworthiness of information sources.
But it is not only readers who suffer from this development and increasingly turn away from major media. It is also becoming increasingly difficult for journalists to maintain their independence and ensure the quality of their work. On the one hand, this is a result of the growing dependence of journalists on large publishing houses, so that independent reporting is becoming increasingly difficult in this centralized system. And on the other hand, good compensation for independent work is becoming more and more difficult to achieve.
Furthermore, most large media companies see readers as a product to earn money with. But the idea of serving the reader with truthful information is becoming less and less important in this system. The result is that many news stories are designed to get clicks, but less to tell the truth.
Both readers and journalists want and are waiting for a new news system that has trustworthiness and fair reward at its core.
B: Our new P2P approach for open journalism:
DOON is a decentralized, blockchain-based news platform that is based on a newly developed reputation system.
This reputation system measures the trustworthiness of content, sources, and users while providing the basis for a novel reward model for content creators and contributors - all without a centralized authority. This decentralized reputation system will have a major impact and transform our content industry by building trust in a world of "fake news" by helping consumers identify the credibility of content or content creators. In the long run, these reputation scores may even be weighted factors for suitability for tokenized assets.
C: Why combine Blockchain and Media? Decentralization, Transparency, Immutability and fair rewards!
- Blockchain allows users to create a reliable and immutable system for recording any kind of information
- Identifying and rewarding valuable contribution by content creators and media user
- Thanks to the blockchain, the rewarding phase is transparent because transactions are tracked and audited by everyone
- Removing user as the product: The idea is that no central authority will have the capacity to use user information for their own purposes, essentially freeing (social) media users from their current status a product
- Control over content: No single entity can enforce monitoring and controls generated content
- Improved Security: Privacy and security through a distributed reputation mechanism
- Expanding and protecting freedom of speech: Blockchain removes the aspect of user accounts so that metadata can not be tied to any single person, and the metadata itself is spread across a single decentralized network. This provides a great opportunity for those who need real anonymity to fight a good fight.
- Fake news: The blockchain enabled platform can provide online readers with a reliable way of verifying the content and its source.
D: Decentralizing reputation to restore trust
Current reputation systems operate in silos and are vulnerable to manipulation, as malicious behavior goes unpunished or even rewarded. Providers and Internet users can create multiple different accounts for each platform with relative ease. Since there is no incentive to improve one's reputation rating, any user with a bad rating need only create a new account to start with a neutral rating.
With blockchain technology, there is now a way to change this management of online reputation. Quantifying and tokenizing users' reputations on the Blockchain based on various factors now provides the incentive for users to build a long-term positive reputation as it relates to rewards. Blockchain and the open-source character of DOON make manipulation much more difficult, and if it happens, it is forever traceable.
In summary, the more users trust you in the long run, the more you will be rewarded for creating your content.
E: How can decentralized reputation be solved for our media use case?
To solve the problems described above, we need to create a decentralized reputation protocol that is open and permission-free. We need to adopt some key principles from blockchain and self-sovereign identity to ensure the decentralization of the system and the associated user sovereignty.
<u>Our reputation protocol consists of four core components:</u>
1. Reputation Quantifying Mechanismen
To quantify the reputation score of a user, we need to define descriptive factors of on the one hand and valuation models on the other. It is important to separate the reputation data from the valuation models. Reputation is simply a combination of facts and opinions. A single opinion and evaluation is always subjective, but the cumulative opinions and evaluation are objective data points, as are additional measurable facts. That's why we separate data collection from data analysis. Thus, reputation are vertices of a directed graph representing facts stored on-chain. The output would be an actual reputation profile.
2. Reputation Tokens
The heart of DOON will be so-called reputation tokens that will serve two purposes:
- To identify and reward the users who have contributed value to the platform—a form of signaling, which those users can parlay into public reputation.
- To provide a form of compensation that enables contributors to liquefy some of the value they have created into an exchangeable currency.
Yet these two roles are in opposition to each other. A token needs to be exchangeable in order to be liquid. But the more liquid a token is, the less effective it can be as a pure signal of reputation.
Therefore, we propose a two-token reputation system, whereby one token, which we call “REP-points,” which serves as a non-transferable reputation signal. A second token, “DOON-coin,” is a transferable asset dispensed to holders of REP-points on a regular cycle. Effectively, REP-points spin off dividends in DOON-Coins that can be used as tradable currency.
At a high level, this design promotes a feedback loop whereby users derive REP-points from high-quality contributions on the platform such as contributing content, moderating or evaluation. And then, when the users with REP-points receive DOON-coins, these can be traded as a currency. Users’ demand for DOON-coins drives the need to acquire REP-points, which in turn incentivizes high-quality contributions.
In summary, contributors receive a non-tradable token for their reputation that spins off tradable tokens.
3. Pseudonymous and private by default
Users are identified by their decentralized identifiers [DID] and are free to choose real names or pseudonyms for this purpose. To ensure the long-term value of the DOON DID, we develop a reputation system consisting of a general reputation protocol, a reputation pipeline interface, a reputation data-on-chain and algorithm library, a reputation incentive mechanism, a reputation account management and a fake account identification mechanism.
4. Open source and community oriented
In web3, you will not gain acceptance or success by developing a complete solution in isolation. Instead, we are thinking about how to combine the amazing work of many open source projects. Reputation systems remain largely fragmented, but there are some interesting experiments being done in the community. What is missing so far is an open, interoperable solution for use cases like DOON.
When it comes to reputations, the open source character becomes also very important in terms of transparency of the rules on how to gain reputation points. Users need to know the rules of the 'game' before they start playing.
F: What will DOON look like?
<u>The DOON- platform works according to the following scheme:</u>
1. journalists and content creators create articles and content that they post on the platform under their DID.
2. readers get access to content via DOON coins.
3. the reputation-protocol determines the relevance of a content and thus the author gets reputation-points (REP-points)
4. the author receives DOON-Coins according to his REP-points as a reward for his content.
<u>Business-Model and Tokenomics:</u>
The problem with many token-based projects (rewards through tokens) is that the underlying value of the token is hard to qualify. Especially when rewards should be a financial incentive. So you need to get real money into the system.
There are several ways in which the demand for DOON coins naturally arises and thus a real and liquid market for these tokens exists. Here are a few possibilities listed. At this stage of the project it is not mandatory to choose the final business model. What is important in community-based projects is to engage in a dynamic learning and development process to find the best business model.
<u>Cycle of Coins:</u>
- Create Content: Posting content costs Coins. This ensures that there is no flood of irrelevant content. The higher a user's reputation, the greater the ratio of cost to potential gain.
- Review content: The user receives tokens for reviewing. The higher the reputation, the greater the weight of the review and the greater the reward
- Consume content: To view content, users have to pay coins. We will test different models for this approach. These can be subscription models or one-time payments. In addition, authors can decide between different compensation models.
- Discuss with author or users: Users need coins to discuss with peers and comment on posts. The amount will depend on the individual reputation and relevance of the post.
- Sponsored posts: Companies need coins to advertise their products. Users who allow companies to show ads to them get a share of the ad revenue and thus receive Coins to participate in the platform. (Especially for topics like advertising or sponsored posts, a reputation protocol can also be implemented to determine the cost of advertising).
<u>How to stabilize the value of the DOON-coins?</u>
At the beginning the platform may need to undertake monetary policy by adjusting the overall supply of DOON-coins. This area needs deeper investigation during the MVP phase with the first test users and will be relevant at a later stage of the project.
The two-token system we have described offers a simple approach: adjust either the point accrual rate or the dividend flow rate. For example, the council that governs DOON could change the reputation-system as a way of slowing down or accelerating point accumulation, or could reduce total dividend size, as a way of decreasing/increasing the long-run DOON-coin supply. But we have to be careful with these sorts of interventions, as every change in the overarching incentive structure for contributors impacts contributor behavior. In particular, anything that degrades point value unexpectedly could harm user trust.
<u>Key-elements of the DOON platform:</u>
- Reputation and token system as described above
- Online platform to post and read content and to interact with each other
- A treasury and governance body, that ensures the development of the platform
<u>Parameters of the reputation protocol:</u>
Our protocol will be designed to incentivize valuable contributions to the network and discourage participants who make fake or biased contributions.
The final definition of the reputation protocol (parameters and alogrithms) for the MVP version is part of the proposal. After the launch of the platform again this aspect will be a permanent iterative process. There are already studies for the measurability of the individual parameters. Nevertheless, research on this topic will be a permanent part of DOON. The following parameters are examples:
- Objectivity
- Truthfulness
- Relevance
Long-term activity: The link between REP points and DOON coins provides a natural mechanism to reward users who have made high-quality contributions. However, since REP points are not transferable, there is an element of hysteresis: those who accumulate points early could end up owning a disproportionate share of DOON coin dividends. In many crypto projects, the largest shareholders are the people who learned about the project the earliest. But these early adopters are not necessarily the most valuable to the future of the ecosystem. Therefore, it is important to incentivize continued contributions and engagement. This means that REP points lose value over time. To maintain your REP point level, you need to continuously contribute value to the system.
In order to develop a secure and sustainable protocol, one focus of the proposal is to find the right parameters and algorithm. This requires research and collaboration with the community (content creators and content users).
Please describe how your proposed solution will address the Challenge that you have submitted it in.
Before we explain why we have chosen this challenge for DOON, let's first tell you why we chose Cardano and Project Catalyst as the best place to start this project.
We believe that Cardano is the blockchain for true decentralization. We support and contribute to this community by making our projects open-source, so that everyone can understand and learn from it. By developing and implementing reputation and governance models we will help other projects become truly decentralized. We are also open-source because we have benefited from the experiences of other projects and because we want others to learn from our experience.
Our team has been involved in Project Catalyst since the beginning, and we see it as the best playground in which to experiment on novel models for decentralization and governance. We see this fund as a great opportunity to find real solutions to real problems. That's why we've been a part of this movement so far and will remain so.
Why this challenge?
This Challenge is looking for 'impactful use cases' that will run on Cardano. We understand the goals and main KPIs of this challenge to be the following:
- Cardano become a thriving ecosystem for better alternatives over current centralized providers
- Increase overall quality of Cardano DApps in ecosystem
- Increase new viable applications on Cardano
- Attract more users to Cardano
Our solution contributes to this quest. Why is our approach impactful and who will benefit from us?
- First of all, it is a service for all news readers: by significantly increasing trustworthiness and transparency of the content
- Secondly, journalists and content creators: by getting more independence, new revenue streams and new forms of rewards
- Finally, the Cardano community: we share our findings about reputation and decentralized governance to help Cardano to become the go-to blockchain for true decentralization.
Comparison to some other existing projects in and outside the Cardano ecosystem:
- DeSo: Layer-1 blockchain built to form the ground up to scale decentralized social applications with heavy databases.
- DNN: Decentralized News Network, combining news creation with decentralized networks to deliver factual content, curated by the community. ICO in 2018, but doesn't exist in is original form anymore
- Mindplex by SingularityNet: Decentralized magazin, based on collaboration but with centralized editors
In summary, as we as a community head more and more into the voltaire stage, we think it is the right time to shift the focus more and more towards systems and use-cases that fully use the potential of the Cardano blockchain when it comes to governance.
What are the main risks that could prevent you from delivering the project successfully and please explain how you will mitigate each risk?
We have analyzed related initiatives in the blockchain industry and identified the following risks for our project:
a. The reputation model does not work as desired
b. The business model and underlying token-based reward and incentive model does not take effect
c. There is not enough capital to put enough time and development into the platform
d. Adoption within the industry and community takes too long.
e. The technical requirement of Cardano blockchain is not evolving in our needed direction
f. Underestimating the complexity of the development and implementation required.
Our strategies
We are adopting the same strategy that we have used for different business ventures: build a buffer into our development forecast that leave room for refactors. Our strategy is to remain transparent on our progress and report any adjustment in our monthly reporting within Catalyst.
a. The main focus of this proposal is to explore different paths for a novel incentive model in a real-world setting. By doing so, we ensure that we can test multiple variants and thus develop a reputation model that meets our requirements.
b. The underlying business model and tokenomics are designed from the ground up so that the underlying value of a DOON Coin (the core of the platform) does not depend on pure supply and demand (and is thus highly susceptible to price fluctuations), but has an underlying value (cash flow via treasury management).
c. We act transparently, we reward participation, and we hire an experienced community manager from the beginning to build a long-term and sustainable community. Our goal, of course, is to ultimately operate as a pure community-driven DAO. In addition, DOON does not depend on a network effect. It is important that the size of the community is proportional to the cash flow and the amount of content created. This makes even a smaller ecosystem sustainably viable. Of course, the goal is to become a big player in the media world. But that's a long road and depends on many variables.
d. DOON is part of a startup factory (Conu21) and thus has access to experienced entrepreneurs and a network of seed investors. DOON will access various resources (private and venture capital, pre-token sales, ICO) to be solvent in the medium term. Catalyst funding forms a building block of seed funding for this project.
e. Currently, Cardano Blockchain meets our requirement and its corresponding future roadmap is aligned with our plan. And fundamentally, we are very confident that Cardano is the right Blockchain for our use case.
f. Our approach is to overestimate development on this part and make sure our capacities are well used in order to leave space for unexpected developments.