Proposal #0: $ROBOT as reputation / social currency instead of as money / capital asset

Proposal #0: Treat $ROBOT as reputation / social currency instead of as money / capital asset

For : Using $ROBOT as a reputation / social currency (creative seeking)

Against : Using $ROBOT as a money / capital asset (profit seeking)

$ROBOT will remain a governance token in both scenarios

Why Reputation / Social Currency

MetaFactory manages brands. Brand value is based on reputation. Reputation, trust, and friendship can’t be bought, only earned. If $ROBOT can be bought on the open market, new members or even brands underneath MF can use their influence to misuse and abuse the reputation and trust we have built up for their own short term benefits. For example a member can buy up tokens, push through a low quality brand, use the MF brand to promote it, then exit scam leaving the MF brand and business tarnished.

Therefore the main asset of the MF DAO is our reputation and must be protected at all costs so this should be the sole focus of our token.

I think this is all the justification we need for making $ROBOT a reputation / social currency vs money / capital asset but I’ll make a long form argument and explanation of how this model will work below.

I’ve gone back and rewatched the last 6 weeks of community calls and categorized all the use cases mentioned below.

What $ROBOT will be :

  • Loyalty points (social currency) - only earned through a strict set of value adding activities like creating new design, buying products, etc.
  • Social signal (reputation) - boosting products, governance proposals, etc.
  • Stake token for access to X (social currency) - Private telegram groups, early product releases, etc.
  • Referral fee (reputation) - reward members that bring in artists that become contributing members of MF (this could be perceived as using it as “money” but depends on context)
  • Governance rights (reputation) - If there is a minimum needed to partipipate in governance and you can’t buy your way in, then having enough $ROBOT is a sign of community confidence/contribution that you are trusted to make decisions.

What $ROBOT will NOT be :

  • Payment currency (money) - no “pay with ROBOT” option in store.
  • Liquidity mining incentives (money + capital asset) - reputation is not liquid so we shouldn’t incentive that. With my proposed liquidity model we would be driving more sales and brand value than liquidity mining (explaied below)
  • Company stock (capital asset) - holders don’t have rights to revenue, etc. This is abundantly clear by the DAO <> LLC division.

As you can see, almost all the use cases we have discussed fall under the reputation / social currency category. This proposal is aimed at formalizing and preserving this asset class by making sure we don’t pollute it with money / capital asset use cases (namely liquidity mining at the moment) and to set boundaries for the future of what the token should not do.

Using $ROBOT as a reward for participating on governance is a toss up, it’s could be seen as either a reputation or money use case just like governance rights but using it as rewards isn’t extremely value adding if this whole reputation/social currency system works.

Complementary or replacement reputation systems for the DAO could be used as well:

  1. SourceCred
  2. Value Flows
  3. Privileged NFTs

If any of these alternatives looks better than using $ROBOT directly as reputation then please vote AGAINST.

Why Not Money / Capital Asset

So far I have been giving reasons why $ROBOT as reputation token benefits MetaFactory but why is using it as money / capital asset not the right thing?

Most importantly the LLC handles the money and payment which frees up $ROBOT to be used for more effective use case - reputation and social currency. This is also for legal reasons as explained by MF core. If anyone wants to gain a financial profits from the MetaFactory brand, they should go through the LLC not the DAO. Therefore the ROBOT token should be completely segregate from monetary and financial use cases.

We aren’t DeFi nor have any type of financial product so a monetary asset has no connection to what we are building. YFI is a financial protocol so having profit seeking individuals running the business is symbiotic because they understand the market / products they are interacting with. Those types of individuals have no idea what it takes to run MF. For example I will make more money off $ROBOT than any other current member, yet I add nothing to the actual MF business because I have no graphic design, fashion production, marketing etc. skills. I myself am a perfect example of how using this token model is inherently flawed. Obviously other members have created more value than me so far so why do they not posses more tokens than me?

Being creative and making profit are not mutually exclusive but one must necessarily take precedence over the other. Since design oriented companies generally earn higher profit being focused on cultivating the best creatives will bring us better profits.

Also if $ROBOT is a capital asset, it inherently disadvantages people that need to sell their $ROBOT for their day to day life (mostly artists we are funding) and benefits those that have alternate revenue stream (non-value adding members) who reinvest and gain more control even though they are the less engaged. (This makes the assumption we want people to be fully committed to MF which I see as desireable)

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This is an interesting post. I do see benefits of having a governance token that has two key characteristics:

  1. Non-transferrable
  2. Reputation can be burned

You don’t get into how your version of Reputation would work, but the details matter.
You can see an example of it in action with DAOs using DAOstack framework.
Other issues come up with this type of governance too.
Currently in the governance world, there seem to be two main verticals. One is coin governance (like most out there) and the other is reputation governance (non-transferrable and burnable).
We are all still learning which designs are better for each application.
We don’t necessarily know which one is better for MF at this point.
But we can experiment!
One important feature is that initially the majority of tokens will be in deeper stakeholder’s control, and the system can evolve.

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Thanks for the thoughtful response :slight_smile: Yes I think a pure reputation token would be as you say but thats a very limiting token model so what we have now I think is good for exploring use cases and experimenting.

I think it’s important to show the distinction between the two token types (social/reputation vs money/capital) because it’s seems to be implicitly understood by everyone but I haven’t seen it said out right anywhere. I also wanted to show why Liquidity Mining wasn’t aligned from a conceptual standpoint with the value we are trying to add to the token.

LM would lead to a more “coin vote” system if we are paying governance tokens to people that already have the token. The main issue I see with coin votes vs reputation is for brand protection. A successful sub-brand could earn more money than another sub-brand and buy more tokens, then vote out other sub-brands so they could receive more resources/market share/etc. This is still possible if the sub-brands have separate tokens from $ROBOT. This is a worst case scenarios but we should try to steer us away from them as early as possible if we can.

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I agree, $ROBOT is not a financial instrument, it’s a governance instrument. We’re not selling $ROBOT, we are distributing it to incentive and value aligned participants of the MetaFactory ecosystem.

The narrative is “buy and design products to earn governance in what products / designers can come into the shop next”. DeFi protocols, farming food tokens etc didn’t have anything besides LPing that they could possibly provide rewards for, but for us we have producers and consumers and that’s all we need to / should focus on. LP rewards dilute the value of the core experience, and is a signal to people that “the core stuff isn’t cool enough on its own so we need to pull the yield farming card to make up for it”, which is far from the truth. We are closer to Rarible than Sushi or Yams, except with much more immediately meaningful utility and governance power over the MF platform.

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