CSTK Score: The “Trust Score” of Commons Stack
Skin in the Game to Realign Incentives for Public Goods
[Article updated in March 2021.]
The CSTK Score (pronounced “C-Stack”) is represented by the CSTK Token on xDai, but it is not a run-of-the-mill token.¹ It’s a non-transferrable “trust token” similar to a reputation token but not exactly the same, as we explain below. Issued by Commons Stack, it represents the “skin in the game” that trusted contributors have put towards accomplishing Commons Stack’s mission.
Here’s the TL;DR:
- People with a CSTK Score are members of our Trusted Seed, and the Score can be thought of as reputation within the organization, estimating how much skin they’ve put in the game.
- The Trusted Seed is transitioning into a a legal Swiss entity. Currently many people have CSTK tokens that do not represent their CSTK Score. During March and April we will ask that they activate their membership by paying membership dues using our Swiss Membership DApp.
- A CSTK Score will enable people to participate in future Commons Hatches, bringing their experience and expertise to help guide these Commons towards success.
- CSTK holders will also participate in certain Commons Stack governance decisions such as voting to select which communities will participate in our Field Test Commons programs.
- CSTK holders are selected carefully (put another way, the Trusted Seed is a highly curated list.) Once you’ve applied and been accepted, you can begin building your CSTK Score on your contributions to Commons Stack.
The Trusted Seed
The software components we are building are the raw materials for complex systems, which means we can’t expect them to work “out of the box.” Setting up a Commons will involve fine-tuning these components so that the system suits the needs of the community. To do this customization work properly, it’s essential to have a deep understanding of the relationship between the various Commons Stack components and to know how they can best be applied towards achieving the community’s objectives.
That’s where the Trusted Seed comes in. The Trusted Seed will learn how Commons Stack’s tools work by being invited to participate in many Commons Hatches. With this knowledge, they can help future communities successfully navigate the critical initialization process. In other words, these individuals will act as the human bridge between the people who want to start a Commons and the technical and cultural techniques used to create the Commons.
In addition to helping launch and steer other communities’ Commons, members of the Trusted Seed will also be very well-positioned to launch Commons of their own. The Trusted Seed will get an up-close-and-personal look at how these Commons succeed and fail. This will provide them with a depth of knowledge and a network to build thriving Commons for their own favorite causes.
Membership in the Trusted Seed
To become a Trusted Seed member, you must apply, which takes into account applicants’ experience, perspectives, and degrees of alignment with our mission. We are looking especially for prosocial people with experience in the fields of blockchain tech, decentralized governance, token engineering, and/or grassroots organizing. One formally activates their membership in the Trusted Seed by paying dues to join the Swiss association that underpins the organization, then receiving a CSTK Score.
The transition to utilize the legal Swiss association to protect the members of the Trusted Seed was always part of the roadmap but officially started in March 2021. In April, the CSTK tokens held by community members that have not activated their Trusted Seed membership will be burned on-chain, but we will keep account of the member’s holdings and when they activate their membership, these previously held tokens will be applied to their CSTK Score.
If you’re wondering whether it’s worth your time to apply, the answer is yes! We encourage curious minds seeking new alternatives to the world’s problems to join us; the only applicants we reject are the ones we cannot identify and those who seem more interested in extracting a profit than driving change. Once we can better estimate the initial distribution of the CSTK Scores, we will introduce a “maximum trust,” a ceiling on what percentage of the total supply of CSTK Score tokens each Trusted Seed member can hold. A person’s maximum trust percentage will depend on how much Commons Stack trusts them to make good decisions in the early days of a Commons.
It’s important to note that upon being accepted to join the Trusted Seed, you do not automatically receive a CSTK Score. To accumulate CSTK, applicants have to contribute to the Commons Stack by putting “skin in the game”. This can mean:
- Making a dues payment in DAI to become a member of our Swiss Association or by donating to Commons Stack: members who contribute financially, 100 DAI or more, receive a Score increase that varies depending on the size and timing of their payment.
- Putting in work: when people do work that helps us advance towards our concrete goals, we recognize these contributions by dishing Praise in our Telegram and Discord channels and increasing their CSTK Score according to Commons Stack’s Praise process.
Contributions, over 100 DAI, other than dues payment, will increase a contributors’ CSTK Score which will be pending minting until they have formally joined our Swiss Association. If paying dues is a financial burden, successful applicants to the Trusted Seed may apply for a scholarship.
The minting of CSTK is not a payment, but rather an acknowledgment that the recipient has helped us move (incrementally) closer to our long-term goals. Just as the “maximum trust” will denote Commons Stack’s level of trust in each member, a person’s actual CSTK Score can be thought of as their reputation score within the organization, one that measures how much skin they’ve put in the game.
Assuming Liability, Curating Integrity
One significant advantage to joining the Trusted Seed is that the members are part of a Swiss association. The association offers legal protection for all activities carried out under the Trusted Seed, meaning that anyone joining any future Commons/DAO approved by the Association will have their legal fees covered if any issues come up. This can ease the issues associated with joining DAOs with no formal legal entity that many jurisdictions classify as general partnerships, a risk that many members of today’s DAOs may be unwittingly exposed to.
Membership in the Trusted Seed is curated by Commons Stack to ensure the integrity of the members. The Trusted Seed is not a ‘code-is-law’ DAO, it’s an organization with rules that are respected because we reserve the power to enforce them. Namely, if any member of the Trusted Seed begins displaying a pattern of extracting profits from the Commons/DAOs they join, to the substantial detriment of those communities, that member will be subject to a system of graduated sanctions, the most severe could be the revocation of their CSTK Score.
Because members of the Trusted Seed understand that these sanctions can be applied, Commons Stack hopes that the threat will act as a sufficient deterrent and we will never actually have to apply this level of sanction. We take this power very seriously and track every token burn event in our transparent burn event log.
Participating in Future Hatches
A Hatch is the initialization phase for launching a Commons. The steps of a Hatch will always include A) deploying the Commons economy with all initial parameters defined, B) collecting the capital that will be used to initialize the Augmented Bonding Curve, and C) issuing the first batch of locked Commons tokens to those who contributed the capital.
The Hatch is the defining moment in a Commons’ timeline, determining who will steer the Commons’ course in its early days. A lot of vested Commons tokens (not CSTK Score) will be minted in this process, making the participants in the Hatch the “benevolent whales” of the Commons. For this reason, we suggest that Hatches be open to trusted people only. The success of any Commons is dependent on the Hatch participants being engaged, wanting to build a healthy culture, and making good decisions. It is critical that speculators who care more about making short-term profits than creating value for the Commons be excluded from Hatches.
It’s important to understand that the CSTK Score is very different from Commons tokens. As we mentioned earlier, the CSTK Score gives access to participate in Hatches. On the other hand, Commons tokens will be created by each Commons. “Commons tokens” is a generic name for the tokens issued by each individual Commons (but not the Commons Stack). In practice, each community will choose its own token’s name. For example, the Token Engineering Commons might name their Commons Tokens “TEC tokens,” and a ‘Save the Whales’ Commons might call theirs “Belugas”.
Commons Tokens behave very differently from the CSTK Score. Commons tokens represent partial ownership of the Commons’ shared resources. They will have a monetary value (if the reserve asset has monetary value), and can be used as payment for work done in the Commons community. The exchange rate will be determined via the Commons’ Augmented Bonding Curve, an improvement over the price discovery method used for conventional tokens.
For example, anyone who does work on behalf of a Commons would receive Commons tokens in return. They can then choose whether to hold onto the tokens and use them to secure some say in the governance over community funds in the Commons’ Funding Pool, or cash them out for the underlying collateral, available in the Commons’ Reserve. In other words, these Commons tokens will act as the economic lifeblood of a Commons.
Commons token holders will have the power to vote on how funds held by the Commons should be spent. Therefore, anyone receiving them as pay has an incentive to hold onto them in order to maximize their influence over how the current and future funds are allocated.
Commons tokens gain value as more funds are added to the Commons, a design feature that encourages the community to complete the goals it sets for itself, as in the following example: imagine a Commons focused on after school arts education is launched. If parents and teachers are exuberant about its positive effects on the children after a few months of operations, then more community members will feel comfortable putting additional funding into the project, contributing to the economic sustainability of the initiative.
Another interesting feature of this model is that the people and groups putting down the money are not outright donors, as is the case in some nonprofit work, but covestors. A covestor is someone who has contributed value to a community and has been recognized for it by the Commons. This would be any Commons token holder.
The main difference between a covestor in a Commons and an investor in an enterprise is that covestors are more concerned about the production of long-term community value rather than short-term ROI. Commons aren’t designed to give 100x returns like BTC, ETH and other networks with free-floating tokens. Instead, they’re optimized to return value to their community by producing public goods like open source code, clean beaches or any other goal that a Commons sets for itself. That said, if a lot of people are impressed with a Commons’ performance and want to participate by holding Commons tokens, the increased demand could increase the value of the Commons Token, and covestors in this Commons could potentially be financially rewarded for their contribution.
This bears repeating: a Commons can achieve the same goals as a nonprofit organization but with an alignment of incentives that can turn what would be a donation into a covestment with a potential upside — a possibility unheard of in the traditional nonprofit space. Even in the likely scenario of covestors getting back less than they put in, non-zero returns are a major improvement over the status quo. More important than the monetary value, of course, is what the cyber-physical Commons offers to unlock: the power to enforce an equivalency between monetary value and the provision of a public good.
The Trusted Seed is essentially a seed round covestment club for a new community asset class: purpose-driven complementary currencies issued via our Augmented Bonding Curve. The Trusted Seed will get to take part in a groundbreaking, grassroots monetary experiment for the greater good. And they’ll get to support and participate in projects that are building a world they hope to see (with no obligation to engage with projects they have no interest in).
Commons Stack’s roadmap is being transitioned into a family of living documents, open to contributions by the Trusted Seed. It lays out our long-term plan to build the community funding and governance tools we all need. Engaging our community to collaborate on defining the best direction forward is a key goal of the Commons Stack, and so certain decisions will be decided by a vote involving all Trusted Seed members. One, mentioned earlier, is that the Trusted Seed will get to vote on which communities should be the first to use our Field Test Commons, but we will also invite the Trusted Seed to vote on & participate in various other decisions Commons Stack will make moving forward.
And of course, if a Trusted Seed member takes part in the Hatches of Commons, the Commons tokens they receive will give them significant say in how those Commons are run, and in how they use their funding. The Trusted Seed will share their expertise with every future Commons that chooses to invite them into their Hatch. They will be instrumental in guiding the design, Hatch phases, and stewardship of these Commons.
Should You Apply to Join the Trusted Seed?
If you are interested in helping launch new Commons, especially if you have experience that you think could be valuable to future communities that want to use blockchain tech to create aligned incentives around the production of public goods, then we encourage you to fill out our application form. If these future Commons are to succeed and thrive, they’ll need caring, dedicated, knowledgeable community members from Commons Stack’s community.
Our application form is our own sort of Commons Stack “KYC”, but we don’t need your legal name or photo ID. We do need some information, though, because of how important it is for us to select the members of the Trusted Seed carefully. We want people who share our values, who can be trusted to support the communities they care about, and who will not try to extract more value than they contribute. It’s because we take our mission so seriously, and because of the significant power that Trusted Seed members may accrue in not-yet-built Commons, that we must be extremely deliberate in vetting potential new members.
Once we’ve successfully reviewed your application, you can begin accumulating a CSTK Score, either by receiving Praise for work you’ve done or by paying membership dues. You’ll only become an official member of the Trusted Seed once you have obtained a CSTK Score, which will be pending minting until you have formally joined our Swiss Association.
If you want to get more involved, there are several ways to engage with the Commons Stack team and community:
🌱 Apply & Activate Your Trusted Seed Membership 🌱
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