I’ve been thinking of ways to incentivize liquidity providers for wSFX and have come up with the following.
Create a TWM governance token
Use it to reward LP’s and GUI wallet users. If you purchase or sell an item through TWM gui, you get some TWM governance tokens. If you provide liquidity to pools, you get TWM governance tokens through LP staking. If you rate people, you get TWM governance tokens. This will align the incentives to buy/sell, rate and provide liquidity for the whole protocol. Which is what we want. It also serves as a cash back mechanism for buyers.
TWM governance usage
TWM token’s purpose will be to govern TWM, not the Safex blockchain. It can help get rid of bad actors or onboard good ones. Initially Dan will do all of it but as it scales there will need to be a mechanism to do this in mass scale. Through a DOA you will be able to create proposals and vote on them to drive the development of the TWM.
So at the substrate we will have Safex Cash and Safex Token. Then one level above, we will have TWM token which is a separate entity than the protocol.
I read Satoshi was planning a rating system in his half finished marketplace. He was planning on rating based on mining behavior. The longer you mine, the higher your rating. Taking this in, we can use TWM to help with ratings a bit. Staking TWM token can give you a small rating increase over time. The longer you are staking, in a way, shows the time you have participated in the network, so you will less likely be a bad actor. This would just be a small factor of the overall rating score.
Lastly, I would encourage the Safex team to look into wrapping Safex into secret network as well. The developers values align with Dan’s extremely well. Currently a group of devs are working on a secret Monero bridge Secret Monero Bridge | Devpost since Safex cash is a Monero fork, then the code will be very similar and can be a gateway for safex to the secret network. The cool thing about this is, safex will be private the whole way in!
Owning a part of something is a powerful emotion that creates all sorts of network effects.
From my understanding, you suggest to launch this TWM governance token on the Ethereum blockchain. It makes sense that it would be distributed to LPs on the Ethereum network. The question remains how it would be possible to distribute the token to TWM GUI users and offer raters. The Safex blockchain does not differentiate between a GUI user and a CLI user, so it is unclear to me how the “GUI use” could be detected and the governance tokens be distributed.
Good points, I agree this would be beneficial.
This is a key point in your proposal. From my understanding, the current structure of the Safex ecosystem is set up in the following way. Decentralized Safex blockchain (Safex Github), centralized TWM GUI (twminc Github). Maybe your proposal would interfere with that idea of separating those two as a result.
Interesting, I have not heard about that yet. Another network one that came recently into my mind would be Solana, which just starts getting traction and has lower fees than ETH. I think they have a function of directly implementing wrapped ERC-20 tokens into their system. In my opinion, any new gateway to the Safex ecosystem with low fees and without the need of an exchange will be beneficial for the adoption of Safex. Anyways, we should be good with a wSFX on ETH for some time.
I guess the only possibility to realize your proposal of distributed a governance token for users interacting with wSFX as well as with the native Safex protocol would be to have
a TWM governance token on Ethereum that gets distributed to wSFX liquidity providers on ETH
a TWM governance token on the Safex blockchain that gets distributed to users who are doing activities on the Safex blockchain.
Then, we would have to figure out how to realize a proposal mechanism using those two tokens.
If the Safex project (the core protocol) wants to introduce governance functionality for Safex core, then the Safex Token SFT should be used.
If TWM by twminc wants to have governance for their TWM app, then so be it and they can do it in any way they think it is the best - it could involve a TWM governance token as proposed by the original poster.
yes, however, safex core, being a censorship resistant marketplace has no room for governance because this would add censorship which is the opposite of its purpose. However, TWM will have some censorship and therefore a governance token makes sense. It’s cool because you can delegate your governance tokens to Dan or whoever aligns best with your beliefs. It becomes a republic which is like a cyber nation. A cyber nation of ecommerce!
Core proposals should be done only by people with a certain amount of the governance tokens(through ownership or delegation) to filter out noise. Then anyone with the governance token gets to vote on the proposal or if they are lazy, they can delegate there vote.
But this doesn’t actually incentivise SFT. When I sold all my Bitcoin back in 2017 to go all in on this project SFT, which evolved out of the Safe Exchange Coin, was the big deal. But as of late there doesn’t seem to be much thought given to SFT. No push for wrapped SFT, no voting rights for SFT holders anymore, it’s all about SFX and now potentially another coin.
Yes, I know you can stake SFT to earn SFX. But right now, SFX actually is worth more Satoshi’s than SFT and most likely a TWM token will be worth more Satoshi’s than SFT.
Unfortunately, it would appear as if SFT is being marginalized! We really haven’t been provided with any updates to feel otherwise.
This wont happen because SFT generates 5% of total sales of the Safex blockchain. That will always give it value. It is also a way for the Safex team to generate cash to fund future endeavors and keep the development of the whole ecosystem healthy. However, for this to work, we need sales volume. Sales volume wont happen if SFX is illiquid because no one can cash out. Due to the egalitarian nature of the SFX cash distribution curve, we will be in high distribution for a couple of year; unless price is healthy, we will have very few miners and an unsecure network.
Miners currently use programs that switch their hash depending on what coin is more profitable to mine. This is why you see mining hash spikes when SFX cash price goes up. We need miners to secure and decentralize. We can have a healthy SFX cash price if we can have a liquid SFX cash pool. This is easily done by aligning the incentives for that desired outcomes.
All of this will help create volume on the core blockchain, hence rewarding SFT token holders.
My proposal:
Fixes liquidity pools so we get healthy volume
offers scaling to TWM
rewards participants of the network -
These things creates network effects (feeling ownership/participation of something is very powerful)
How cool would it be if, when you used Uber you got an shre of Uber or governance token?
If you use Microsoft Windows, you get rewarded through Microsoft shares
If you use amazon, you get amazon shares?
The users would own the networks.
Makes sense, since the users create the value.
You can reward a token that can be cashed in for the real thing through an ongoing swap. TWM token would be on a transparent by default blockchain so you can track the votes and delegations. The DOA voting reputation would work in an honest way through checks and balances. This will keep people honest since I can track what you voted for, then I can choose to delegate to you or remove my delegation from you.
Solana. ethereum, secret network are all transparent by default. Ethereum has high fees but that will be fixed in time, there is also matic L2 which is extremely cheap/fast but requires migration.
Lots of options. Personally I like secret network because its transparent by default but can make any coin/token a layer 1 privacy smart contract coin. Fees are low too. I haven’t thought through enough to know why TWM governance token would need the optionality to become a layer 1 smart contract token, but having the option would be good, in case that functionality is needed.
Secret network also has a project called Human Node being built, which is a private identity verification project(one of a kind). This will allow you to have a private identification on the blockchain, which seems TWM/safex would benefit from.
They are seperate and should be treated as such. I don’t think it would intertwine other than TWM token would create immense value to the core protocol.
If we look at ethereum, it’s whole ecosystem gives value to eth but the projects built on top of eth are their own entities. Ethereum is not a security, but many ERC-20’s are.
I thought this was one of the reasons for wrapped SFX, the ability to cash out, so to speak, by swapping it with another crypto.
You’re ideas are sound, but what I propose, perhaps foolishly, is that if @dandabek does decide to implement a TWM governance token, maybe we could reward SFT holders with the option of either earning SFX or TWM governance token. This way, it ensures that it really pays to have SFT.
But my proposal is not really aligned with what you propose because then it would reward SFT holders who aren’t gui wallet users that actually buy and sell.
yes this is correct. there can be an ongoing swap, Burn and mint through a contract.
Ethereum is the biggest ecosystem and best to do it on top of that for now. Too much upside for interacting with it.
this is over complicating it, in my opinion. the token staking should stay like it is, collecting revenue share from sales. this will always give the token fundamental value and cash flow. people can then decide to sell their earned SFX on the market for the governance token if they wish to do so.
I don’t think so. I see no harm in providing alternative ways for rewarding SFT holders. What if their are other apps developed on the Safex Blockchain other than the TWM.
Are we suggesting then that the only option for SFT holders to be rewarded is by staking their SFT solely with the TWM wallet?
as said, why introduce another token on the safex blockchain for governance when there is one token already - the safex token. it would take effort and time to build this additional token/system which could be used elsewhere (like for other marketplace functionalities in safex core). just my 2 cents.
I thought the proposal was a new governance token solely for the TWM wallet, not the Safex Blockchain. If that is the case, then we wouldn’t be introducing another token on the blockchain; and then all the benefits ascribed to this new governance token proposed by @Edwin could be another reward type for SFT holders.
My hope is that no matter what other apps or uses are created both for and on the Safex Blockchain, SFT holders will always be rewarded. I hope that the TWM wallet will not be the only way to reward SFT holders. Shouldn’t there be a push to incentivise SFT as much as possible? I thought this was tacit!
Otherwise I may be correct in my view that perhaps SFT is becoming marginalized.
I have no doubt it will be that way. SFT holders will always be rewarded with SFX revenue share that takes place on the Safex blockchain, whether it is via CLI, TWM or any other app that is interacting with the Safex protocol.
airdrop a certain % of the total TWM token to SFT stakers. All in one sitting. Lets say 5-10%
airdrop over time. For example, 10% of total TWM tokens will be distributed to SFT stakers over a period of time, lets say 4 years. This is done through farming with a yield.
Anchor the distribution to SFT staking rewards. Example, If I stake 10 million SFT and in the next 1000 blocks I get 50 SFX cash as a reward, then you get 50 TWM token as well. It’s mirroring.
The third is the most elegant and my favorite. You can allocate 10% of the total supply and it will take as long as it takes to distribute based on market activity.
You would of course name the token something like xTWM, and it will be redeemable in the future to regular TWM which can be on ethereum, solana, polygon(matic), or secret network. Depending what is best for the marketplace. Once the bridges are made of course. Since xTWM will be similar to SFX cash, and Safex is already building the wSFX bridge, you can copy paste the code for xTWM easily. Would require very little effort for a migration swap.
back in 2017 to go all in on this project SFT, which evolved out of the Safe Exchange Coin, was the big deal. But as of late there doesn’t seem to be much thought given to SFT. No push for wrapped SFT, no voting rights for SFT holders anymore, it’s all about SFX and now potentially another coin.