How Decentralized News Network (DNN) Payouts Work
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Understanding Tokens
To better conceptualize tokens, think of them as you would seat tickets at a sports game. Tickets enable you to reserve access to an available seat. For every available seat in the arena, there will be one ticket accompanying it. A person who has a ticket is free to sell their ticket for a price that is greater than or less than the going rate. Since tickets are limited, the cost of the ticket will increase as less tickets become available.
Broadly speaking, tokens are digital tickets. Alternatively, these are keys that grant access to a particular service over the blockchain. Depending on the platform, the number of tokens available may be fixed or infinite, each of which affects the value of a token.
In DNN’s case, there will be a fixed supply of available DNN tokens, all of which give people the ability to interact with the DNN platform. You can think of this as fuel. Submitting, reviewing, and commenting on articles, or even tipping writers, are a few examples of actions that require fuel, or tokens. Each of these actions requires a different number of tokens in order to be carried out. How many tokens an action requires gets dictated by the DNN network.
Note: Unlike most platforms that have a single type of token, DNN has two tokens: one that has value — called DNN, and the other with no monetary value on the platform — called DCC tokens. DCC tokens only serve as an indication of entitlement to a portion of the DNN tokens available for distribution.
The Reward Pool
The reward pool holds DNN tokens that have been used to carry out actions on the platform, which are later swapped for DCC tokens. Commenting, reading, and liking articles are some of the actions which fund the reward pool with DNN tokens.
Readers can earn DCC tokens by suggesting topics to writers. If an article is accepted, a portion of DCC tokens generated from the review process will be given to reader who suggested that topic.
Publishers can earn DCC tokens for hosting nodes. Nodes help ensure that the DNN software is readily available to all participants on the network.
Writers have the ability of earning DNN tokens directly in the form of tips, as well as DCC tokens either through reader suggestions, or by submitting articles that end up getting approved by reviewers.
Upon acceptance of an article for publication, the writer of the piece will earn DCC tokens proportional to the quality of work they provide. Work in the context of the DNN platform is defined as the ratio between accepted and rejected articles from the writer to-date and adherence to the DNN content guidelines.
Each writer earns a different number of DCC tokens depending on their reputation. The writer’s reputation is based on the ratio between the writer’s total number of articles accepted and articles rejected. The higher the ratio is (more articles are accepted than rejected), the more DCC tokens the writer will earn, and ultimately DNN tokens. The more articles a writer submits that are deemed worthy of being published by reviewers, the more DCC tokens that writer can earn. The possibility of earning a considerable amount of DNN tokens for writing for the DNN platform is therefore limitless.
When a group of assigned reviewers reaches a consensus for a particular article, each reviewer within the group earns DCC tokens proportional to his or her bid. DCC token rewards come from the Writer Fee and newly minted DCC tokens. Each reviewer can earn a potential payout proportional to the amount of DNN tokens that he or she bids to review the article, and their personal reputation. We use the word “potential,” because no reward is issued to a reviewer should they vote incorrectly. Furthermore, the more DNN tokens a reviewer is willing to forfeit for an incorrect vote, the higher the potential payout he or she can earn. A reviewer’s reputation is a ratio between the number of times they voted with the majority and as a minority.
For DNN, reader suggestions solve this issue by incentivizing writers to write articles about things that readers want. The power to suggest meaningful subjects directly to writers gives readers a voice by allowing them to participate in the creation of news that interests them.
At the beginning of each suggestion cycle, readers will propose topics that they would like writers to potentially cover. These topics will be ranked by popularity, before being presented to writers for bidding. To entice writers into writing articles about the suggested topics, additional tokens are awarded for each topic suggestion that gets approved and deals with that particular subject. Each reader is limited to no more than a single suggestion per cycle, which is a period of one week.
Should a reviewer fail to cast a vote, the number of DNN tokens used to bid for the article will be forfeited and redistributed to other reviewers and the writer (dependent on acceptance into the network). In this regard, a reviewer’s bid also serves as collateral.
Writer Example
A user who writes for the DNN platform starts out by acquiring DNN tokens. DNN tokens can either be obtained on the platform or purchased. DNN tokens are the fuel that give writers the ability to submit their articles to the network for a complete assessment by reviewers. For the sake of this example, our writer will start with 10 DNN. Having obtained DNN tokens, the writer can construct an article and submit it to the DNN network for review. Upon submitting the article, the writer will need to pay a writer’s fee dictated by the network. We’ll assume the writer fee is 2 DNN tokens, leaving our writer with 8 DNN tokens.
Depending on the outcome of an article review, the writer earns DCC (a DNN Contribution Coupon) tokens proportional to their reputation. Each writer starts out with a reputation equal to 1. The reputation of a writer is nothing more than the ratio between the number of articles that have been accepted and the number of articles that have been rejected. In the case where the writer has no rejected articles, a value of 1 will be put in its place to prevent an invalid ratio. In this example, let’s assume that the writer submitting the article starts out with a reputation of 2 (accepted articles) over 1 (0 rejected). At the conclusion of each review, DCC tokens are minted by the platform of an amount equal to the summation of the reputation of the reviewers assigned and the writer submitting. For the sake of this example, we’ll assume that each reviewer has a reputation score of 1. The summation of reputations would mean 9 DCC tokens (1 for each of the seven reviewers plus 2 for the writer) will be minted at the conclusion of the review (i.e. when each reviewer has casted a vote). Assuming the article gets accepted, the writer will earn 2 DCC tokens.
The goal of each writer is to accumulate as many DCC tokens as possible. The more DCC tokens a writer earns, the more they will be able to exchange for DNN tokens from the reward pool during the exchange period. The reward pool acts as a bucket that collects DNN tokens from each action carried out by every user of the platform. The network calculates how many DCC can be converted into DNN for each user during the exchange period.
Let’s assume a ratio of DNN tokens to DCC tokens is 2:1. Since our writer has earned 2 DCC tokens, they would be able to receive 4 DNN tokens in exchange. Our writer’s new balance would then become 12 DNN tokens when including the balance of 8, which they are free to sell to other contributors of the platform or use within the DNN network.
Reader Example
Every reader on DNN starts by out acquiring DNN tokens that can either be obtained from the platform or purchased. DNN tokens allow the reader to influence the platform in the form consuming, tipping, liking, commenting, or flagging articles for subsequent review. Let’s assume that for this example the reader starts out with 10 DNN tokens. In order for a reader to view articles published to the DNN network, a rather small micropayment of DNN tokens is needed (which gets determined by the network) for each unique article that gets viewed. In our example, let’s say the reader views 10 articles, paying 0.002 DNN tokens for each article, for a total of 0.02 DNN tokens paid into the system. This would leave the reader with a balance of 9.98 DNN tokens. Similarly, liking and commenting both cost DNN tokens that get deducted from the readers total DNN balance as they are performed.
Each reader can earn DCC tokens by flagging articles for review and suggesting topics that are considered by writers. Similar to writers and reviewers, readers earn DCC tokens proportional to their reputation. A reader’s reputation can be described as the ratio between the sum of articles that incorporate their suggested topics, articles that have been rejected as a result of their flag- over, the number of suggested topics that were not used, and articles that were re-accepted as a result of their flag. Each reader will start with a reputation of 1. Since the reputation is ratio, a zero denominator will be replaced with a 1.
Similar to writers, readers earn DCC tokens that get minted during the review process equaling their reputation. A reputation score of 2 over 1 would mean the reader earns 2 DCC tokens for their contribution. Let’s assume the reader suggests flags an article for inaccuracies, which ultimately is rejected after being re-reviewed. This would yield the reader 2 DCC tokens for their efforts.
The goal of each reader is to accumulate as many DCC tokens as possible. The more DCC tokens a reader earns, the more they will be able to exchange for DNN tokens in the reward pool during the exchange period. Let’s assume the ratio of DNN to DCC is 2:1. Since our reader has earned 2 DCC tokens, they would be able to receive 4 DNN tokens in exchange. The reader’s new balance would then become 13.98 DNN tokens, which they are free to sell to other contributors of the platform or use within the DNN network.
Reviewer Example
Each reviewer starts by obtaining DNN tokens, either by purchasing them or by obtaining them on the platform. Reviewers use DNN tokens as a way of getting considered for review. Let’s assume that a reviewer starts out with 10 DNN tokens. For this reviewer to be considered for assignment by the DNN network, the reviewer must pay DNN tokens up to the specified cap, dictated by the network. The higher the number of DNN tokens a reviewer puts out, up to the cap, the quicker they will be selected. However, to prevent top DNN token holders from strong-holding the review process, every reviewer who places a bid, will “eventually” be assigned an article. For the sake of our example, let’s assume that the review pays 5 DNN tokens into the selection pool to be considered for a review. The tokens paid into the selection pool will be held there until the conclusion of the review process once the reviewer has been assigned an article.
Once the reviewer has been assigned an article and has casted a vote, they will earn DCC tokens proportional to their reputation. A reputation value of 3 will entitle the reviewer to 3 newly minted DCC tokens, while a reputation score of 1 would result in 1 DCC token. Every reviewer starts out with a reputation score of 1. Should the review opt to not cast a review in time, they will lose their initial DNN token bid (which now acts as a security deposit) and will no longer be entitled to newly minted DCC tokens. For the sake of our example, let’s assume that each reviewer votes in a timely fashion, and has a reputation score of 1 (including our example reviewer). At the conclusion of the review process, our example reviewer would earn 1 DCC token and will have their 5 DNN tokens returned to their account.
The goal of each reviewer is to accumulate as many DCC tokens as possible. The more DCC tokens a reviewer earns, the more they will be able to exchange for DNN tokens in the reward pool during the exchange period. Let’s assume the ratio of DNN to DCC is 2:1. Since our reviewer has earned 1 DCC tokens, they would be able to receive 2 DNN tokens in exchange. Our reviewer’s new balance would then become 12 DNN tokens, which they are free to sell to other contributors of the platform or use within the DNN network.
Publisher Example
Each publisher node must start out by obtaining DNN tokens, either by purchasing them or obtaining them on the platform. Unlike reviewers, readers, and reviewers (who must use DNN tokens to continuously interact with the platform in order to earn DCC tokens) publishers earn DCC proportional to their DNN token holding. The more DNN tokens that a publisher node accumulates, the more DCC tokens will need to be minted. In a similar sense, the number of DNN tokens that a publisher node holds with respect to every other publisher node is the equivalent of their reputation. As with any other type of contributor, publishers earn DCC tokens that get minted at the conclusion of the review process.
Unlike the other types of contributors that directly influence the number of DCC tokens that get minted based on their reputation, a fixed number of DCC tokens will be minted for all publisher nodes. These newly minted DCC tokens will then be distributed according to the percentage of DNN tokens that each publisher node holds with respect to all publisher nodes.
The goal of each publisher is to accumulate as many DCC tokens as possible, while counter balancing that with the number of DNN tokens they hold. For a publisher node that holds 50% of the DNN tokens out of the total active publisher nodes, 50% of the DCC tokens minted will be awarded. So a publisher node with a balance of 2 DNN tokens, which accounts for 50% of the DNN tokens held by publisher nodes, would be entitled to 5 DCC tokens out of 10 DCC tokens (although this number will vary depending on what the network decides) minted. The publisher is free to exchange the DCC tokens within the same exchange period as the other contributor types.
