Introducing: Activate by Codefi Networks
A new way of launching and participating in decentralized networks
We recently announced the launch of ConsenSys Codefi: a product suite built for the next generation of blockchain-enabled commerce and finance to create a more open, inclusive, and digitally native global financial system.A core pillar of Codefi is Codefi Networks,which is focused on providing products and services to create, launch, monitor, and utilize decentralized token-powered networks.
Our mission with Codefi Networks is to accelerate the adoption and use of next-generation decentralized networks. We believe that adoption of blockchain technology is currently blocked by solvable friction points such as fragmentation and poor user experience. Over the past year, we have been working on solving these problems as the ecosystem matures and innovation accelerates.
Today, we are thrilled to introduce Activate by Codefi Networks, a platform that facilitates the launch and participation in decentralized networks. Our mission is to enable the global activation of decentralized networks by connecting users, enablers, and creators of decentralized networks.
For all the latest updates, sign-up here or join the conversation on Twitter. We will be announcing our first launch partner very soon.
Our Motivation
Let’s face it: Participation in decentralized networks is hard.
Over the last few years, we have seen a meteoric rise in the number of “utility tokens” launched on Ethereum, each proposing to serve a multitude of functions on their native networks. Tokens are a novel way of creating multi-sided markets by allowing contributors to actually benefit from network effects. This incentivizes a new economy of like-minded users that participate in networks to achieve common goals, no matter where they are located.
There are a number of participation-based tokens in the Ethereum ecosystem that currently demonstrate individual or a combination of usable functions. These include:
- Governance: Tokens enable holders to vote on protocol and network-specific governance decisions
- Right to work: Tokens provide rights to contribute to the network (e.g. validate transactions on a network)
- Usage: Tokens enable users to participate in certain roles on the network, access resources on the network (e.g. liquidity), or serve as a means of exchange to network-specific products and/or services
In reality, however, the majority of these tokens and networks have failed to gain significant user adoption. We believe a number of factors have led to this:
Premature Launch
In most cases, tokens were launched and distributed before there was a functioning network to use them on, reinforcing the ‘HODL’ mentality, where token holders passively and speculatively wait for their tokens to accrue in value without actually using the tokens for their intended purpose.
Protocol & Incentive Design
In connection with the lack of an existing network, these networks often suffered from poor economic incentive design, resulting in the unbalanced and unfair distribution of network resources between participants, which prevents or disincentivizes a wider community from participating.
Participation Friction
The former phenomenons have been further compounded by the fact that most of these networks lack a user-friendly platform that facilitate and enable the use of tokens, which has resulted in poor engagement from users.
As a result of these issues, the lack of participation in an open, decentralized network prevent its native token from reaching its potential and the inherent degree of decentralization these networks strive to achieve.
Our Ecosystem Today
Over the last year, we’ve seen a notable decline in the number of token launches due to regulatory uncertainty, a tightening of global risk capital, and an increase in blockchain skepticism, all resulting in a wide-reaching bear market. However, during this trough of disillusionment, most of the industry has been hard at work building and deploying the underlying technical infrastructure of blockchain systems required to make long-term, wide-scale implementation of blockchain technology a reality. We believe the nature of this “bear market” has been essential for our community and will be one of its defining moments.
Over the past 18 months, progress in privacy, scaling and interoperability between networks has resulted in a significantly more mature and inclusive smart-contract platform ecosystem, as compared to the 2017 “ICO gold-rush.”
However, we still lack a key enabler for adoption and use of blockchains: an effective means to participate.
Introducing Activate by Codefi Networks
Over the last year we have used this insight to design and build Activate.
Our mission is to create a safe, sustainable and seamless user experience to enable interactions between decentralized networks and their respective token holders.
Who Can Use Activate?
In the Activate ecosystem there are two primary constituents:
- Platform Participants — actual users and consumers of decentralized networks
- Launch Partners — networks using Activate to launch with active users and consumers
Platform Participants
Users who join the Activate platform will have the opportunity to purchase tokens and participate in these decentralized networks by using their tokens. These tokens will demonstrate inherent utility to the functionality of their network.
Upon successful purchase, users will be able to “put these tokens to work” on the Activate platform by connecting directly to our launch-partner’s live network. The Activate platform will come with built-in tools for token holders to use their tokens, allowing them to perform a range of actions:
- Staking: stake your tokens to validate transactions on the network.
- Delegating: delegate your tokens to a network validator to validate for you.
- Voting: vote on protocol and network-specific governance proposals
Activate will provide these tools to users with a frictionless experience through carefully designed and intuitive interfaces that will allow users to utilize tokens in just a few clicks!
Launch Partners
Launch Partners are decentralized networks that are approaching launch on the Ethereum Mainnet. All Launch Partners are carefully vetted in accordance with the Brooklyn Project’s Consumer Token Framework to ensure design and philosophical alignment system.
Launch Partners must be building a network that successfully commands effective protocol and incentive design, ease of access to participants and mature technical infrastructure. These networks will have a native, usable token that participants will be able to use on the network to support or provide the networks intended purpose.
At ConsenSys, we strive to partner and work with communities, teams and projects that are collectively providing a useful and sustainable service to the Ethereum and wider blockchain ecosystems. We employ these same beliefs when selecting launch partners, ensuring that successfully chosen networks are supported and have the means to facilitate a truly decentralized network launch.
Activate Core Features
Encoded Participation: Proof of Use
A fundamental, yet historically difficult milestone for decentralized networks to achieve is significant user participation. This has been challenging to build into existing networks due to a number of reasons, the two primary ones being: Lack of technical infrastructure and/or poor user experience.
On Activate, we want to build a community of individuals who recognise the importance of collectively participating and putting their tokens to use on their networks. That’s why Activate will support what we call ‘Proof of Use’.
Proof of Use, originally conceived by the Brooklyn Project back in 2017, promotes a standard where users who successfully purchase tokens during a launch, will need to actively “prove use” of their tokens on the respective network before they’re allowed to transfer them outside of the network. These conditions are essential to:
- Ensure that a token is indeed being used for its inherent and intended purpose on the network.
- Bootstrap a network with a large collection of active contribution ensuring it can perform its intended function and attribute legitimate, measurable, transparent value to a decentralized network.
On Activate, after every successful launch with a network, purchasers will be required to use their tokens on the native network’s mainnet — for the tokens’ intended use — before the purchasers are permitted to transfer the tokens for other purposes.
For example, a participant may be required to stake at least 50% of the tokens purchased for a minimum of 3 months before they’re allowed to transfer any tokens freely. The goal is to minimize passive speculation on token appreciation and to maximize active contribution to the network.
Of course, in using their tokens, participants will typically also be rewarded for their efforts in the form of tokens or other rewards (rewards vary between networks), and will be able to continue using their tokens on the Activate platform even once they have satisfied Proof-of-Use.
Make Informed Decisions
Decentralized networks can be hard to understand. As a token holder, you’re expected to keep track of myriad different bits of information, events, transactions, and actions that take place on a network to help you make a decision in how you participate.
We understand that this will likely be a new and exciting experience for many users who will now be able to use their tokens immediately after purchase. Activate will guide token holders through the platform and provide the ability to interact with any of the platform’s tools to allow them to use their tokens.
On Activate, we’ve condensed and simplified this information overload for a token-holder, making the experience intuitive enough for anyone to understand the status of a network, alongside their own personal holdings, at any given time. This information equips users with more informed decision-making so they can decide how to best utilize their tokens.
An example of how this is achieved is the Activate platform’s ‘Network Dashboard,’ which provides the user with a macro-economic overview of the particular network, within which the user holds tokens. This dashboard distinguishes and presents live network information (e.g. number of tokens staked, number of nodes validating etc) so a user may understand what next action to take with their tokens.
These tools will come in the form of intuitive user interfaces which allow users to specify the action they’d like to perform (e.g. staking, validating, or voting), as well as the amount of tokens and period of time they’d like to deploy them for.
Enabled Token Lifecycle Management
Facilitating network launches is important, yet only a starting point for what Activate offers users. Our goal here with Codefi Networks is to create a platform that will serve as a home for your tokens.
Activate incorporates features which allow a user to manage the end-to-end journey of a token, such as secure wallet integration, the ability to add and use your favorite Ethereum-based tokens, access DeFi functionality, and collectively coordinate between the communities of networks in which you’re participating.
Minimize Risk, Maximize Fairness & Transparency
Token launches and network participation have had a notorious past; many were fraught with ambitious raises, lack of team experience, absent functional infrastructure, and questionable sales dynamics.
With Activate, our goal is to set a new global standard for the future of token launches and network participation. The platform will embody the virtues of fairness and transparency throughout the user’s experience and, as a result, minimize a user’s exposure to risk. Examples of this include KYC and ID verification checks, fair pricing and distribution mechanisms for launches via a Dutch auction, real-time transparency of network status, trackable logs as well as a host of other features.
Activate ensures that you, the user, are in complete control of every decision you make and have the tools to inform that decision.
Our Long-term Vision
Activate has been the result of extensive research and deep-rooted industry observation over the last two years as we’ve built out the Codefi suite, assessing everything from protocol and smart contract platform trends all the way to the more granular movements such as token holder habits, friction-points and frustrations.
A healthy decentralized network can only be achieved through a symphony of global participants, contributing and being rewarded for their actions through automated execution and token-based incentives.
Our vision for Activate is to remove the complexity that exists today when interacting with tokens and decentralized networks, and instead, facilitate and support the new, rapidly emerging decentralized communities of tomorrow.
This industry has come a long way since Ethereum was first proposed 6 years ago, and along the way we’ve built a very special community of developers, inventors, thinkers, contributors and supporters who all believe in the decentralized future of tomorrow.
We didn’t build Activate for ourselves, we built Activate for you and the participants of tomorrow.
Find out more at www.activate.codefi.network
Disclaimer: The views expressed by the author above do not necessarily represent the views of Consensys AG. ConsenSys is a decentralized community with ConsenSys Media being a platform for members to freely express their diverse ideas and perspectives. To learn more about ConsenSys and Ethereum, please visit our website.
