The Civil Cryptoeconomic Whitepaper

Introducing free, independent and self-sustaining journalism, enabled by Civil’s decentralized newsmaking platform.

UPDATE: This post reflects the founding vision for Civil, and our commitment to introducing a new, self-sustaining model for journalism. Civil’s core mission of introducing a new funding model for journalism remains, but some of the details outlined below have evolved as we have refined the cryptoeconomic model that will power our platform. We’re finalizing a formal white paper (to be posted by March 2018) that will outline how this model works. In the meantime, here are two other relevant reads reflective of how Civil will be a self-sustaining marketplace for journalism:

What if the news were run by the people?

The Fourth Estate as we know it is vanishing. Advertising dollars, fake news, and powerful agendas are manipulating what we see and what we think we know. Our freedom, justice and even democracy are at risk. We’ve never been more divided.

At Civil, we believe the certainty and transparency of blockchain technology can offer a radical new way forward. With open governance and cryptoeconomics, we can create a sustainable place for journalism — even the kind of local, policy and investigative journalism that has been most eroded. Decentralization is the key to a free and independent press.

How it works

“The primary purpose of journalism is to provide citizens with the information they need to be free and self-governing.” 
 — Bill Kovach & Tom Rosenstiel, The Elements of Journalism

Civil is building a newsroom platform using blockchain technology and cryptoeconomics to create an open marketplace for journalists and citizens. In Civil’s self-governing marketplace, readers may directly sponsor journalists, and journalists collaboratively run their own publications, called Newsrooms. Citizens may sponsor Newsrooms using Civil’s cryptocurrency (CVL), thus kickstarting a new collaborative model for the production and distribution of news. Civil will launch a public search to fill the Journalism Advisory Board, an independent governing board that ensures fair, objective and professional standards are met throughout the platform.

Our blockchain-based platform and its smart contracts will protect journalists against censorship and intellectual property disputes while fostering transparency across the platform. Meanwhile, properly incentivized collaborative editing and fact-checking will substantially limit misinformation.

Initially the Civil platform will focus on local, policy and investigative reporting led by our First Fleet, a diverse group of 200 top-tier journalists across 30 self-directed Newsrooms. Civil is bootstrapping these initial Newsrooms with pre-sale CVL tokens and $1,000,000 in grant funding, not to mention substantial logistical support to get started.

If you’re interested in joining our First Fleet, apply on our website: joincivil.com.

A message from Team Civil

We believe that in order to build Civil the right way, we need to build it together. In that spirit, we invite constructive criticism and feedback for this whitepaper on Github. Thanks for all your support.

Please be sure to visit our website, job board and prior major posts (here and here). Then come chat with us on Slack!

Cryptoeconomic design

“Media is increasingly less just a source of information, and it is increasingly more a site of coordination.” — Clay Shirky, Internet sociologist

The Civil platform uses smart contracts on a decentralized network underpinned by Ethereum and related blockchain technologies. Our cryptoeconomics (powered by the CVL cryptocurrency) define the users within Civil and their interdependent incentives in order to align all behavior with the overall sustainability and growth of the platform.

The Civil platform comprises 4 interdependent smart contract procedures:

  1. Creating and running a Newsroom — Anyone can apply to create a Newsroom with a proposed charter and creation fee paid in CVL, kicking off a Journalism Advisory Board review process. If approved, the newly appointed Newsroom Officers may run their organization however they like within the confines of the Civil Code of Conduct.
  2. Producing news content collaboratively — Any Newsroom-appointed Newsmaker can start a piece, invite or request collaborators, negotiate terms directly and transparently, and publish good journalism to a global network of concerned Citizens.
  3. Supporting good journalism—People can also sponsor Newsrooms with recurring CVL token allocations to provide more stable support in exchange for a portion of future revenues. Anyone can pledge CVL tokens to an individual Newsmaker or collaborative piece to offer one-off support, and it will be allocated automatically according to any relevant terms active on the platform.
  4. Floodlighting and fact checking — Our mission is to connect diverse perspectives exchanging accurate information. Therefore discovery will be built to floodlight issues with stories from multiple angles, so readers don’t get trapped in bubbles; and a role, with cryptoeconomic incentives (described in greater detail below) will be created for fact checkers across the network.

Newsrooms are independently owned news organizations with the power to govern, finance, produce, validate and distribute their own original news content into an open market. Newsrooms are self-directed: they define their own mandates, governance structure, operational parameters and sponsorship tiers — all within a broader Civil platform and its Code of Conduct. Newsrooms are also just a piece of self-managed software, which programmatically handles all incentive structures, smart contracts and record-keeping to share internally and with the wider network.

Civil roles

  1. Journalism Advisory Board — An independent body consisting of leaders in journalism and journalism ethics. It oversees the governance of the platform, and acts as the ultimate dispute resolution body.
  2. Officers — Officers run Newsrooms according to charters that have been agreed to by participating Newsmakers, supporting Citizens, and approved by the Advisory Board. They are responsible for Newsroom operations.
  3. Newsmakers — Reporters, writers, editors, photographers, videographers, illustrators, researchers, proofreaders and more who are affiliated with a given Newsroom.
  4. Citizens — It’s our mission to make the vast majority of content on Civil freely accessible to all. However, those who choose to pledge or sponsor CVL tokens on the platform will unlock certain “power user” features as well as potential earnings opportunities over the long-term.
  5. Fact Checkers — People can validate content, flag inaccuracies or challenge claims for the opportunity to 1) earn CVL tokens and 2) improve their reputation. Newsmakers will seek out highly effective Fact Checkers, creating an important secondary market on the platform.

How Newsrooms Work

What are Civil Newsrooms?

Civil Newsrooms are a software implementation of a marketplace for news creation and distribution with DAO-style governance, a business model, and an economy that allows the marketplace to function fairly and sustainably. Technically, a Newsroom is a deployed set of smart contracts together with a content storage layer that is open source, trustless and decentralized.

Civil Newsrooms collectively form a marketplace like any other — there’s a demand side and a supply side. Citizens demand news content and serve as the primary source of revenue via pledges and sponsorships. Newsmakers supply the news through content production and distribution. The Civil Newsroom marketplace connects these demand and supply groups more effectively than current models — and in a direct, transparent and self-sustaining way.

The following table shows how different people intersect across various Civil Newsrooms throughout the platform:

Creating and running a Newsroom

The Journalism Advisory Board — Civil’s independent decentralized governance board — will establish the Newsroom creation fee, a security margin primarily meant to deter spam. It also builds economic commitment among Officers, and creates sustaining revenue for the Journalism Advisory Board.

Founding Officers must pay this fee in CVL in order to submit their application for review. Officers may also choose to bootstrap their Newsroom with initial seed capital.

Fluctuations in the CVL exchange rate may cause fluctuations in the creation fee, which is unstable. Therefore, the Journalism Advisory Board may adjust the price to the market from time to time.

Once approved, Officers may now perform the following basic functions on behalf of their Newsroom:

  1. Establishing and managing Newsroom parameters, such as sponsorship tiers and earnings allocations.
  2. Reviewing and voting on applications to admit new Officers or Newsmakers (as well as the powers to remove them).
  3. Publicly reviewing Code of Conduct disputes, with powers to adjudicate or escalate to the Journalism Advisory Board.

All official Newsroom business will be conducted in plain sight, and each decision brought to a vote will be permanently public.

Officers’ governance rights and Newsmakers’ publishing rights are represented as state within Newsroom contracts. Officers may confer or rescind these rights from members only using a Newsroom proposal system. The relative voting power among Officers is arbitrary and decided autonomously.

For example, Matthew and Lillian start a Newsroom, sharing voting power 50/50. They add Christine as a new Officer, collectively agreeing to 20% voting power. Thus, the updated voting distribution is Matthew (40%), Lillian (40%), and Christine (20%).

Publishing content collaboratively

Newsmakers are authorized to publish at any time via their Newsroom to the broader Civil platform and potentially beyond via shared links or embedded content. They may invite or request collaborators such as editors, photographers and more — drawing from Civil’s growing global network of Newsmakers and beyond. Every piece published on Civil has an associated compensation table, which represents the agreements made amongst collaborators for the work contributed. This information is permanently public as soon as the piece is published.

It’s possible to update or add new collaborators to the piece’s compensation table after publishing — new research is conducted or more footage is collected, for example — all of which is tracked and publicly available.

Supporting good journalism

Besides seed capital provided by Officers, Civil Newsrooms have two primary sources of revenue: pledges and sponsorships.

Pledges are like tips— totally discretionary and tied to an individual piece of work. Anyone is free to pledge any amount of CVL tokens to Newsmakers in recognition for a strong content, and this revenue is automatically allocated amongst the Newsmakers according to their compensation table via smart contract.

Sponsorships are like memberships — recurring payments via smart contract that unlock premium content or community experiences, with tiers and pricing set by Newsroom Officers. Citizens sponsor the Newsrooms that matter most to them in order to provide consistent backing, participate in the community, and potentially share in the Newsroom’s long-term financial sustainability and growth.

This works by allocating a portion of pledging revenue to Newsroom sponsors, thus incentivizing these Citizens to consume and share great content throughout the Civil platform and beyond. Civil will use a system for early-bird rewards, so early backers are entitled to a larger allocation of pledge revenue than those who sponsor later on. This will be achieved through a quantitative function on the number of sponsorships over time.

Pledge and sponsorship revenue will directly, transparently and instantly pass through to Newsmakers and Officers according to active agreements on the platform. Newsrooms may also direct some or all sponsorship revenues to a ‘treasury’ — a multi-signature autonomous agent — in order to manage, reinvest or distribute profits at the discretion of its Officers.

The intent is to provide Officers tremendous flexibility in running their Newsroom operations, while also providing unprecedented transparency and accountability for Citizens to see how Newsmakers earn their revenue.

Floodlighting and fact checking

Civil aims to create a news marketplace that minimizes factual errors and misinformation. Therefore, validating and fact checking are critical functions within the marketplace. Civil strives for a cooperative newsmaking process as much as possible, welcoming corrections to accidental misrepresentations and honest human error. It is also important to note that false accusations should not be allowed to undermine the platform’s legitimacy or become a tool for censorship.

Consequently, Civil’s fact-checking process is designed to resolve disputes only when parties continue to publicly disagree on the merits of their respective claims. In such cases, Newsroom Officers act as the first recourse among disagreeing parties, and in rare cases of appeal, the Journalism Advisory Board acts as the ultimate decision-making authority. There’s potential concern that Newsroom Officers will exhibit bias in favor of their Newsmakers. However, because the process is public and there’s the opportunity to escalate to a higher power, Officers are more strongly incentivized to protect their Newsroom’s credibility lest they lose support from Citizens or incur financial and reputation repercussions themselves for Code of Conduct violations.

The public fact-checking process begins when Newsmakers publish their piece, at which point anyone may become a Fact Checker to suggest corrections and flag errors. In most cases, Newsmakers will simply accept or reject the recommendations, and where accepted, include Fact Checkers in the piece’s compensation table commensurate with the contribution. In rare cases, a Fact Checker may claim a piece is violating more serious standards and ethics (e.g. libel, plagiarism, hate speech). Fact Checkers must post a CVL bond, which deters fact-checking spam, along with any supporting evidence to issue these severe claims, triggering a Newsroom Officer review process.

At any time, the relevant Newsmakers may simply accept the correction, which will return the CVL bond to the Fact Checkers plus a small interest. This interest rate is set by the Journalism Advisory Board and is drawn from the Newsroom’s capital pool, which implies that many such corrections will drain resources.

Alternatively, the Newsmakers may dispute the claim, triggering a vote by Newsroom Officers to decide in favor of either the Newsmakers or the Fact Checker. If either party feels wronged by the Newsroom’s decision, they may appeal once to the Journalism Advisory Board for a final review and vote. All adjudication processes should be as public and transparent as possible to most fairly uncover the facts.

Apart from the small CVL bond to deter frivolous claims, the fact-checking process is not influenced financially. There is no way for anyone — Fact Checker, Newsmaker or Officer — to ‘sway’ a review or ‘buy’ a victory.

Anyone who visits news content under review will see a clear notification communicating the specific issue in question and the current review status. No content will ever be ‘blocked’ or ‘taken down’. Instead, there will be a public and permanent record of claims and confirmed violations visible to anyone visiting the individual piece as well as the Newsmakers implicated.

Summary

With this proposed cryptoeconomic design, Civil seeks to establish the necessary roles, relationships, governance processes and revenue streams to self-sustainably produce, distribute and validate news content via an open and transparent marketplace platform. Advisors and Officers are compensated for their leadership, management and decision-making. Newsmakers are compensated fairly through both recurring payments from committed sponsors as well as ad hoc payments from Internet readers in general for highly valued, widely shared pieces. Citizens pay sponsorship fees to support and access exclusive content and experiences, but are also rewarded for helping to distribute quality content and grow compelling Newsrooms. Finally, Fact Checkers earn revenue from Newsmakers or Newsrooms for highlighting valuable corrections and harmful conduct violations in order to ensure Civil maintains a high standard for accuracy and ethics.

Civil Newsroom Walkthrough

Three journalists decide there’s a need for a publication in their region about opioids — a vital, fraught topic crying out for serious coverage — but doubt the local newspaper can be persuaded to devote the necessary resources to it or that a start-up digital publication on the topic could sustain itself in the current digital media economy, if they even knew how to go about starting one.

They decide to create a Newsroom dedicated to covering the topic from the top down — the role of government agencies and politicians, the medical establishment, first responders, the pharma industry — as well as from the bottom up, telling unsentimental and unflinching stories about the impact of the epidemic in local communities.

They pay 100 CVL to apply and create the Newsroom, and begin collecting revenue from Citizens on the Civil platform in two forms: year-long sponsorships with recurring monthly payments, and Friend of Founder-level pledges of between 100–500 CVL. These early supporters become entitled to a commensurate share of future revenue.

The Newsroom Officers set their share of revenue at 60 percent, split three ways, with 30 percent reserved for “freelance” expenditure — other contributing writers, photographers, fact-checkers, etc. The remaining 10 percent is allocated as “dividends,” to be distributed to Citizens in accordance with the amount and earliness of their support.

The Newsroom quickly collects 500 sponsorship smart contracts from Citizens for 10 CVL/month for 12 months, creating a minimum near-future revenue stream of 60,000 CVL. They also collect 200 pledges for 100–500 CVL up front, giving them 25,000 CVL on hand.

This is enough for them to launch a proof-of-concept version of the publication and earn some money while they’re working on it. Their work draws positive notice, and entices other Newsmakers to offer submissions and suggest assignments.

They add 50 new sponsors each month, with an additional several thousand CVL coming in through one-off pledges.

One of the founding Newsmakers likes to work with a talented freelance photographer. Together they create a news story about an innovative local intervention program. The Newsroom agrees with the photographer to split any potential revenue with her 50–50.

The story gets picked up by national outlets and makes 4,000 CVL in pledges as people find the story from across the Internet. Of this 2,000 CVL goes to the Newsroom, and 2,000 CVL goes to the freelance photographer.

The Newsroom’s charter indicates how this remainder revenue is distributed: this Newsroom allocates a portion of pledges to its members (40 percent, or 800 CVL, distributed among the three Officers); puts 40 percent into the Newsroom treasury (800 CVL); and distributes the remaining 20 percent among supporting Citizens. In this way, the newsroom has directly monetized an individual successful story by bringing in outside help and paying that help a fair fee; and it has incentivized its Citizens to help popularize the team’s work.

At the 12-month mark, the Newsroom has increased their sponsors to 1,000, good for 10,000 CVL in revenue per month. The individual Officers are also making money, along with the rest of the Newsroom, through the increased value of their own token holdings and through their cut of pledges.

They are now faced with a choice between keeping their share of the revenue static while maintaining the Newsroom’s mission and capacity, or whether to spur faster growth by reducing their share slightly and expanding the mission.

They choose to expand.

They make a deal with a respected investigative journalist to contribute six 4,000-word pieces on the interplay between the pharma industry and public opioid policy over the course of the next year in exchange for a 2-percent stake of Newsroom revenue and a 50-percent cut of pledges on her pieces. They invite their favorite photographer to become a regular member of the Newsroom, giving her a 10-percent stake in the Newsroom and the ability to contract other talented local photographers to individual assignments using the freelance budget.

They also decide to dedicate a portion of Newsroom revenue to a paid internship.

They form a partnership with a nonprofit health care think tank and a national newspaper to create themed series of deeply reported articles.

All of these things increase the publication’s impact, making it a go-to place for sources, experts and interested Citizens, while driving up in-market exposure, support numbers, and revenue.

They achieve sustainability and the ability to plan growth over a long term, without having compromised their mission to suit the desires of a wealthy owner or the traffic-based demands of an advertising model. They have created something viable, and vital.


Next steps

Join our token sale

We are launching the Civil platform and CVL token simultaneously in early 2018. We will be posting weekly roadmap updates along the way, including opportunities to contribute to the cause.

→ Join our mailing to hear updates first.

Apply to our First Fleet

Civil is issuing pre-sale CVL tokens and $1,000,000 in grant funding to 200 top-tier journalists across 30 self-directed Newsrooms.

→ Apply to become a First Fleet newsmaker.

Join our growing team

We are hiring engineers, designers, product managers, journalists and marketers.

→ Apply here.


Team & Acknowledgements

Our team

Matthew Iles is CEO of Civil, leading strategy, product and team-building. He studied journalism at Duke University before an 8-year career in digital marketing and startup entrepreneurship. He believes journalism is core to a healthy society, but that legacy business models are holding it back. He started Civil to energize journalism for the 21st century by rewiring how it works with blockchain technologies. For more, read his posts “What if the news were run by the people?” and “Why Civil?

Lillian Ruiz leads Growth & Operations at Civil. She studied history at Wesleyan University before beginning her career in the digital marketing space, where she has served startup media companies and non-profits alike. Lillian comes to Civil energized by its paradigm shifting vision of a fully autonomous media landscape, and is eager to share its story with new audiences.

Christine Mohan leads Community & Partnerships at Civil.

Dan Kinsley leads Data Services at Civil.

Julia Himmel is Product Designer at Civil.

Matt Coolidge leads Content & Communications at Civil.

Nguyet Vuong leads Product Design at Civil.

Patrick Heinz leads Blockchain Architecture at Civil.

Our partners

  • ConsenSys: Civil recently announced $5M in funding from ConsenSys, the world’s leading blockchain company and venture production studio. CEO Joe Lubin and CMO Amanda Gutterman are Civil board members.
  • CoinFund: Jake Brukhman and Aleksandr Bulkin are co-founders of CoinFund, a cryptoeconomics advisory team and open research community for blockchain, and also lead authors of Civil’s cryptoeconomic whitepaper.
  • Old Town Media: Tom McGeveran, Josh Benson and Katherine Lehr are longtime journalists who teamed up to establish and oversee POLITICO’s state operations, before leaving earlier this year to form Old Town Media, a media strategy firm working to find new models for journalists and publishers. McGeveran is a Civil board member.
  • Chris Padovano is a New York-based attorney and the founder of Decentralized Legal. His practice specializes in the legal and regulatory implications of blockchain tokens and distributed software.
  • Ed Klaris is former general counsel to New Yorker and Conde Nast, advising Civil on matters of libel, privacy, fair use, technology and the First Amendment.

Acknowledgements

We didn’t reference any of their work specifically here, but these people have been highly influential to our thinking: Eric Ries, steve blank, Brian Robertson, Jay Rosen, Charlie O’Donnell, Fred Wilson, Joel Monegro, Nick Grossman, Brad Burnham, Ben Thompson, Fred Ehrsam, Satoshi Nakamoto, Ted Nelson, The Coral Project, Hearken, Marc Andreessen, bhorowitz, Chris Dixon, Vitalik Buterin, Frederic Filloux, Alex Moazed, Nicholas L. Johnson, Sangeet Paul Choudary, Jason Fried, DHH, John Wooden.


Thanks to Katie Neufeld Iles, Kim Schatzel, Trevor Iles, Barbara Neufeld, Doug Neufeld, Ron Garrett, Matt Corva, Kavita Gupta, Sam Cassatt, Alex Felix, Jono Schafler, Stefan Pepe, Christian Crowley, Alex Hardy, Eric Richmond, Ryan Zampardo, Ed Staples, Sawyer Carter Jacobs, Lauren Ramsby, John Ness, Blake Eskin, Jerry Weinstein for their support and input.