Why does CanYa need its own token?

The team and I at CanYa have been asked this many times before. I want to write a short summary of why the $CAN token is fundamental to the decentralised future of the CanYa Ecosystem.

I will explain the core use cases for the token and then how they fit into our eventual decentralised economy.

Use Case #1: Powering the DAO

CanYa will eventually be run by a decentralised autonomous organisation. The reasons for this are many but include:

  1. It will allow CanYa’s costs to be very low and allow our fees to be 20x cheaper than our competitors.
  2. A decentralised organisation is more transparent, secure and efficient than a traditional company structure.
  3. Having CanYa run by the DAO will mean that the function of governance and strategy is undertaken by token holders who are directly aligned with creating the best platform possible. A superior platform means more users, which, in turn means more demand for $CAN and thus an increase in $CAN value over time. This is in comparison to a traditional company run by a board of directors whose responsibility is to extract value from the platform and its users to create shareholder profits.

The DAO (as eluded to above) needs to be run by individuals who are economically aligned with both the platform and the token price.

Note: This works well because in the long term as the token price will be heavily dependent on the popularity of the platform . This means a healthy platform will give rise to a healthy token price.

To ensure that those that run the DAO are economically aligned to the platform and token price the DAO will require its operators to stake $CAN. Furthermore DAO members will also be paid in $CAN. Both of these points means DAO members are directly incentivised to operate in the best interests of both the CanYa platform and the $CAN token price.

This cannot be achieved without a native $CAN token.

Note: Specifics regarding staking, tasks and payment for the CanYa DAO are still to be finalised.

Note: A detailed blog covering the economics of CanYa’s token model will be released next week.

Use case #2: Powering the hedged escrow

Like any other marketplace CanYa will need to ensure payment can be made (or reimbursed) once a job has been agreed to. Traditional platforms do this via methods like holding credit card funds. CanYa, being a cryptocurrency based solution, does not have this option and therefore has to hold funds for the job in escrow. However, due to the volatility of cryptocurrencies, job value could fluctuate up and down while funds are escrowed leading to a poor user experience. To solve this issue CanYa will ‘hedge’ the value of escrow against a pre-determined value (most likely $USD to begin with).

CanYa will eventually support a large range of cryptocurrencies, however, the hedged escrow will only work with the $CAN token. This is due to the technical and economic complexities involved in the mechanics of the hedge.

Functionally, the users of the platform will be able to pay for services in a range of cryptocurrencies, however, in the background these other cryptocurrencies will be converted into $CAN while in the hedged escrow.

Solving the volatility issue is a key determinant in the adoption of cryptocurrencies by the broader public. This is particularly relevant for a broad market like the freelance economy. We feel the hedged escrow method will fix this while still creating a token that can appreciate in value. Again, this could not be achieved without our own native token.

Use Case #3: For use in CanYa’s freemium economy

We will offer freelancers the opportunity to promote their profiles within the CanYa platform. These promoted profiles will become ‘featured providers’ and will appear at the top of searches and have other benefits within the CanYa ecosystem.

Freelancers will need to pay for these optional promotions using $CAN.

Use Case #4: Consumptive use token

Ultimately, the tokenecomic goal behind the entire CanYa project is to increase demand for the $CAN token. To achieve this goal, all of the dApps within the CanYa ecosystem will use $CAN as the primary medium of exchange .

CANWork due for release July 2018 will be the flagship product but there there are other exciting dApps in the works for the CanYa ecosystem.

Eventually the core functionality of this ecosystem (payments, customer support, dispute resolution etc) will become universal across all CANApps via the DAO. This will mean that third party developers will also be able to create their own CANApps to plug into the DAO and further increase demand for the $CAN token — an exciting concept that is made possible via the decentralised ethos.

‘Decentralising out’

The team at CanYa believes in ‘decentralising out’ towards our final vision of what the CanYa ecosystem will be. By this we mean that initially it is inefficient and almost technologically impossible to have the fully decentralised CanYa ecosystem operating from day one. Firstly, we need to build the CANWork marketplace (which will initially have a lot of centralised aspects). Following that, some of the other complementary CANApps can be released while sharing common modular elements from CANWork. Eventually, all of these dApps will be supported via the DAO and the supporting modular tools will be open source allowing third parties to add to the CanYa ecosystem. As this process takes place we will become more and more decentralised and will have ‘decentralised out’.

As this occurs, keeping everyone economically aligned (while discouraging bad actors) becomes fundamental to the success of the ecosystem. Therefore, as CanYa progresses along its road map the need for the $CAN token becomes greater and greater until the ecosystem is completely dependant upon it.

Summary

With cross-chain technology becoming more and more advanced we at CanYa believe that the future may be one where there are many different cryptocurrencies all operating independent, yet interoperable with each other. Maximalism will stifle innovation within the space and create monopolies.

Hopefully the four identified use cases for $CAN and the decentralised roadmap for the ecosystem have outlined why a native token is fundamental to our tokeneconomic model.

$CAN is the oil that runs the CanYa machine and will always be tied to the success of the platforms within our ecosystem.

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