Chapter 3: Flambu’s User Rewards “Sharing Economy on Web3”
Flambu is a community-centric marketplace that lets people share and borrow items in their vicinity powered by blockchain. Flambu features a two token model ($FLAME and $FLAMBUCKS) for enhanced peer-to-peer renting of anything, with a decentralized trust and fast low-cost payments. In this article, we would like to explain User Rewards and P2P transactions.
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As a community-driven platform, Flambu rewards users for their contributions to the platform’s growth.
Flame token rewards
As in any sharing economy platform the users bring in significant value with their content and good behavior, it is fair to reward them with part of the value captured by the platform. Up until now, all the traditional sharing economy platforms were created for profit and benefited mostly the platform owners and investors as they captured most of the gains.
At Flambu, we believe in a fairer model, which will not only benefit the platform owners, but also the community itself as the heart of the platform. With blockchain technology, it is now possible more than ever to make this idea a reality, to create a true sharing economy, where not only things are shared, but the overall value created is shared as well. It is the idea that evolves the users into stakeholders and aligns the motivations of a platform with its users.
The way that this evolution is brought to the sharing economy by Flambu is by creating a deflationary token called Flames on the blockchain, that will gain value with the platform’s success and a transparent distribution mechanism that will reward contributions that add value.
Rewards Distribution Mechanism
As in Bitcoin and other early use cases of blockchain, rewards are tied to the value added to the network, such as securely and trustfully verifying transactions, also in Flambu, the rewards will be distributed to the users proportionally to the value they create.
Users can earn Flame rewards by being active and adding value to the platform.
Initially, to bootstrap the community and incentivize early participants, the following actions will be rewarded with the corresponding number of Flames for each action:
- Registration
- Inviting friends (per registered friend)
- Listing items (per verified item)
Action Based Rewards
The following table shows the initial Flame rewards distribution per each action that adds value to the platform:
The rewards in the table above will be halved by a deflation mechanism each time when a threshold of transactional volume has been reached in the platform. The first threshold is set to $10K of transactions volume. Then each threshold will be 10x of the previous threshold.
For example, when the transaction volume reaches $10K, each user that signs up after that point in time will receive 5 Flames, and when the transaction volume reaches $100K, each user that signs up after that point in time will get 2.5 Flames, and so on.
As the platform grows, new actions can be added to the list and each action’s rewards amount may change either as a decision taken mutually by the community and the platform, or the deflation mechanism.
Transactional Rewards
In addition to the Action Based Rewards, when users enter transactions, 10% of the transaction value will be converted into Flames from the price at that point in time. At the end of the transaction, the two sides will be asked to give a review to each other in terms of stars, and the Flame tokens will be distributed back to the lender and the renter according to the following equations:
To clarify, here is an example (for simplicity we are assuming 1 Flame = $1 in this scenario):
Alice rented Bob’s VR headset for a week for $100. Everything was great and at the end of the rental the two gave 5 stars for each other
- Alice will get $100∗0.1∗0.2∗5/5=2 Flames
- Bob will get $100∗0.1∗0.8∗5/5=8 Flames
If one or both of the sides did not get a 5-star review, the remaining Flames will be burnt.
Note that, this mechanism incentivizes both users to give a review, and until both sides gave their review, none of them will receive their rewards.
Transactions in Flambu with Flames and Flambucks
As Flames are deflationary tokens and their value can fluctuate due to many factors, it will be more practical and desired for the transactions on Flambu to be processed with stable tokens pegged to a fiat currency. For each rental, the renters will be asked to pay for the rental with any of the provided payment methods such as credit or debit cards, or wire transfer, or if they already have tokens in their wallet from previous earnings they can pay with those as well (including with Flame tokens as they can be converted to Flambucks at any given time).
The payment process involves the purchase of stable tokens such as Fuse Dollars ($fUSD) from any on-ramp providers such as Ramp network that will be integrated into the Flambu app. Those purchased tokens will be kept in a reserve smart contract and an equivalent amount of Flambucks will be minted for the paying user, so Flambucks will be backed 1:1 by fUSD in this case. The user that purchased Flambucks can now freely pay for rentals or buy products and services from Flambu partnered businesses in the platform for almost 0% commissions. While Flambucks are circulating in the platform, the reserve tokens will generate yield on the most performant DeFi protocols, and when a user or a business wishes to cash out their Flambucks earnings, they can do so for a 10–20% commission depending on several factors such as their residency and 3rd parties involved. The purpose of the commission is to encourage the users to use Flambucks within the platform as much as possible. Part of Flambu’s revenues, including the commissions and interest generated on DeFi, will buy and burn Flame tokens from the bonding curve (see Flame Token Economics for details) which will increase the value of Flame tokens.
FBX tokens will always appear to the user as their local or chosen fiat currency in the app to avoid confusion and simplify the user experience.
Part of Flambu’s revenue will buy and burn Flame tokens from the bonding curve which will increase the value of Flame tokens.
To continue the example in the previous section, let’s say again that Alice wants to borrow Bob’s surfboard for 2 days for $100 as it is determined according to Bob’s listing ($50/day) and Alice’s balance in her wallet is 0 $FBX and 200 $FLAM. Let’s further assume that 200 $FLAM from Alice and 50 $FLAM from Bob is sufficient for this rental since the algorithm determines that this transaction is fairly safe, so in case of any issues the insurance pool will cover the losses. Therefore, for this rental, Alice needs to deposit only $100 with her credit card, so once she pays $100 which purchases 100 $fUSD, and sends to the Flambucks reserve smart contract, Flambu will mint and send 100 $FBX to Alice’s wallet automatically so she can proceed to request the rental. Once the request is sent, the escrow smart contract will lock 200 $FLAM and 100 $FBX from Alice’s address, and once Bob approves the request 50 $FLAM will be locked from Bob’s address. If everything goes smoothly and the rental ends happily, Alice and Bob will get back 200 $FLAM and 50 $FLAM, respectively. Bob will additionally get his payment of 100 $FBX in his wallet.
Now since Bob has earned 100 $FBX, he can either rent or buy a product on Flambu, he can decide to cash out, or he can convert his $FBX to $FLAM to have more stake in Flambu’s future success. In case he decides to cash out, he will get $80–90 USD to his bank account. In addition to the $FLAM’s that the two sides receive back after the transaction, they will additionally receive $FLAM rewards as their reputation scores will likely increase after a successful transaction.
In these short reads of 3 chapters, we tried to explain Flambu’s Token Economics, Trust & Security, User Rewards & Transactions.
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