ABCs OF TOKEN-CURATED REGISTRIES
Token-curated registries (TCRs) are becoming popular subject in the cryptospace. While there are many different possibilities of token-curated registries, there are general overlapping gamification rules.
Mike Goldin of Adchain helped developed what TCRs have become today. “Token-curated registries are increasingly common cryptosystems apparently applicable to solving problems in a number of domains,” according to Goldin in a recent article. He points out that the “product or output of a token-curated registry is a list. Humans have a penchant for list-making and lists appear commonly.”
He describes TCRs as a “smart contract on the Ethereum blockchain, which keeps a cryptographically secure record of publisher domain names. The domains listed in the adChain Registry are accredited as non-fraudulent by adToken holders”.
Simon de la Rouviere wrote a recent article entitled, “City Walls & Bo-Taoshi: Exploring the Power of Token-Curated Registries” in which he says he is excited about Token-Curated Registries (TCRs). They constitute a “simple, elegant, powerful and has extremely broad application.”
This is happening in part because ICOs and even private efforts are becoming increasingly decentralized. Automated decentralization is also taking place in exchanges as well. Regulators have come up with ways to make rules for centralized exchanges but not decentralized ones.
Exchanges that have been shut down by regulators should be switching over to a decentralized model instead of switching jurisdiction. Now that decentralization is spreading to individual offerings.
One key I believe is keeping rules of the “list” very simple. Businesses that are based on TCRs should use a “decentralized first” model. Similarly, ventures were constructed using “internet first” model in the 1990s and a mobile first” model after that.
How does it work? According to Goldin and others, three kinds of users compose a TCR. Consumers want the best lists; candidates want to be part of those lists; token holders want to raise the price of their tokens. To ensure the need for tokens stays strong, token holders should keep the listing standards high.
Candidates should pledge a payment for a listing. This pledge is confiscated if the candidate doesn’t work out. Token holders may seek to reject many candidates, but if they do so, their tokens will not easily rise in price.
People with the most tokens should probably have the most say about who comes in. If the price of tokens falls, token holders should consider raising the price to make sure the best candidates apply. Sometimes applicants (or domains) will be rejected entirely.
“CryptoStreet,” explains it as follows:
If a domain appears to be fraudulent or of low quality, it will be challenged by the [Token] holders. The forfeited deposit is awarded to the winning party and the voters in the losing bloc receive nothing. In case their application fails, the applicants can reapply for listing as often as they can.
TCRs are self-sustainable, and decentralized. The more tokens you have, the more you contribute. But the tokens and the system only need your input at certain times. The rules are entered on the blockchain so that anyone can look at them. Competition creates the best possible outcome.
Additionally, someone with tokens who is skilled at voting can create ongoing revenue by marketing the tokens without touching the principal. The best token programs are thus expanded without principal involvement.
TCRs may have trouble to begin with because potential token holders may not wish to subscribe to an unpopulated list. This problem has been resolved various ways though not in one fashion over and over again. There are numerous approaches but not all of them work all of the time, or even some of the time.
One idea is to partner with various industry groups and boards, thus adding immediate credibility. Another idea is to actually distribute tokens to such people thus allowing otherwise unconcerned individuals to become holders.
“Latetot” sums up the advantages of TCRs on Reddit as follows:
-“Tokens incentivize people to care enough initially.
-“Tokens are generally a great way to bootstrap a network effect, i.e. “kickstarting”.”
This has been a quick overview of TCR development. It is an extension of automated and decentralized exchanges that are a reaction to unwanted regulations being put in place — mostly by government authorities.
ICOs are private, non-central bank money of the kind that has been around for thousands of years. It is new in the sense that it is digital. Yet in a larger sense, private money has been around far longer than the quasi-public money of central banks. Central banks want to recapture non-central bank private money but because of the acceleration of technology and sophistication that will not be easy.
There is much more to come, but decentralization and automation will play an increasing role. They are integral to cyrptocurrency development itself. Thus it is the shape of the future as well as a way to fight back. The battle continues.