Assurance contract
TLDR: We are buying the island but how to incentivize early investors? Aligning game theory and crypto incentives.
UPDATE: Here is the code on Github — the minimal thing that works 👍
Open for business at basex.eth
basex.eth Don’t trust verify, the company and bank account is open: basexisland.com/bank but using ETH (and other ERC20) has many benefits…
Bitcoin, Blockchain, Ethereum, smart contracts, DAO.
New models of trust and governance.
New financial system, new definition of value.
Much more than just a new way of paying for stuff.
New fork order
A lot of revolutionary things unfolding in real-time in the world post-COVID.
There is a hackathon happening right now, brilliant minds coming together: https://metagame.substack.com/p/fork-the-world-hackathon
There hasn’t been a DAO focused hackathon yet, so we decided to start one. We also decided to make it about more than just development while we’re at it. Let’s hack on some designs, let’s hack some growth for existing DAOs, let’s launch some new DAOs!
On our side, there are still some unknowns — negotiating with the owner: Google Doc and evaluating the legal framework: post on Medium
Both statements are simultaneously true:
- 100% focus on the BaseX, limiting all the distractions, aligning commitment, energy, passion, massive transformational purpose.
- BaseX is taking part in Fork The World hackathon and we will be implementing the assurance contract on Ethereum.
Assurance contract
Check the definition: en.wikipedia.org/wiki/Assurance_contract
game theoretic mechanism and a financial technology that facilitates the voluntary creation of public goods and club goods in the face of collective action problems such as the free rider problem
Token Economy
Check our proposal Token Economy Google Doc, in a nutshell:
BaseX — owns the island — token name
$BSXBaseX Operations — runs the island — token name
$BSXO
$BSX— represents the ownership of the island, and yields$BSXO
The $BSXO will be used to pay for upkeep, repair, maintenance, various other services offered on the island.
Design principles
- Fair, simple, logical, straightforward
- Easy to understand
- Aligned incentives, positive-sum game
- Intuitively “makes sense to me”
Incentivizing early commitment
This is the name of the game — incentivize early investors?
The money you sent is yielding you benefits.
We use 20% APR as a baseline.
crypto.com is somehow reputable and they offer 20% staking reward. In order to be competitive and incentivize parking money with BaseX, we need to offer 20% as a baseline.
Data points:
$1mraised: deposits yields 20% APR$100kraised: deposit yields 50% APR$0kraised (at the very beginning): deposit yields 100% APR
Linear in between, you’ll need to use y=ax+b math.
For example, $50k raised is exactly in the middle and yields 75% APR
The $100k is the magical round number, the first $100k is the most difficult (and the riskiest) that is why offering increased ROI.
Features and configuration
Subject to feedback and discussion. That’s why we are starting the project as a blog post on Medium to facilitate the feedback from the very beginning.
1. No minimum investment required
Democratic and open for business.
2. 10% penalty for withdrawing
You can withdraw all your invested amount minus 10%.
The 10% goes to a marketing and operational budget during the fundraising.
The ability to use a portion of funds to promote the BaseX feels natural and intuitive.
3. Are $BSXO rewards expiring?
No. They are valid forever, even if we go underwater 100 years from now but we will have time to adapt, so do not worry about that. NASA data says 4mm per year
4. Limit of accumulation?
The slowness of accumulation maybe yes.
This is to encourage regular use as opposed to hoarding.
For example, if no use for 12 months then the accumulation ratio drops by 10%.
Feels overcomplicated though, most likely a feature bloat.
5. Are $BSXO tokens tradeable?
TBD.
Being able to sell them — the expectation of profit — different 3D world law would apply.
Not being able to sell them — cannot expect profit from something that is not possible to sell.
TO BE DISCUSSED WITH THE LEGAL
6. ETH / USD price oracle
- Chainlink oracles: https://feeds.chain.link/eth-usd
- Price feed contract addresses: https://docs.chain.link/docs/reference-contracts
- Read on contract Etherscan: https://etherscan.io/address/0xF79D6aFBb6dA890132F9D7c355e3015f15F3406F#readContract
7. ETH only in the smart contract
We are accepting USD and EUR as well: basexisland.com/bank
Maybe there should be a manual admin function to account for the money invested in other ways?
If could accept 3 parameters:
- ETH address
uintamount in USD- IPFS hash with PDF proof of the transaction
Receiving ERC20 could be technically possible but again — simplicity!
8. Investing ETH has no downside to you
To buy crypto or to invest in an island?
That would be a dilemma, that would be an opportunity cost. By investing your money as ETH, you will be participating in the crypto gains.
You can invest in crypto and invest in BaseX at the same time.
You participate in all the upside, without the downside in the days / weeks / month leading up to the purchase.
Illustrative example 1 (ETH price down)
- ETH is $250 and you invested 40 ETH into the project. Total investment value of $10k.
- The ETH price is now $200.
- For accounting purposes, we will still account for $10k investment.
Illustrative example 2 (ETH price up)
- ETH is $250 and you invested 40 ETH into the project. Total investment value of $10k.
- The ETH price is now $400.
- For accounting purposes, we will account as if you put $16k investment.
We are bullish on crypto, we understand there is an opportunity cost of investing into the BaseX — we want you to eat 🍰 and have 🍰 too!
9. Affiliate?
I have friends, you have friends, not everyone has crypto wealth, how about 10% referral bonus?
To incentivize other forms of contributions — referrals, introductions, sharing on social media — running the affiliate program.
What about organic traffic, will someone refer themselves to get a bonus?
Do we want to do referrals on-chain or manually in Google Docs?
Simplicity. Manually in Google Docs. Not including any additional features in the smart contract, period.
10. Upgradeability?
We haven’t used that yet: https://docs.openzeppelin.com/learn/upgrading-smart-contracts
Hackathons (and testnets) are a good place to learn and gain experience, do we really need it though?
11. Governance?
Some contract parameters will be determined in the constructor.
Do we want to have the ability to change them?
12. Cut off date?
There is no need to enforce strict deadline, there is always another island coming.
We identified plan B1 backup option — link, PDF brochure, Google Maps.
A single retweet from Elon can totally change the dynamic of the fundraising.
KISS (keep it simple stupid)
More info about the island
The island has a lot of cool features and in August we are going on a trip: basexisland.com/trip
Fundraising strategy
Previously we explained our upgraded fundraising strategy:
We would much rather call Elon.
We would much rather call Jeff.
Herding multiple decentralized cats is difficult but not impossible.
By developing the smart contract and being plugged into the MetaGame MetaCartel community magical things can happen…
Let’s see what happens!
Next steps
We have company open and bank details: basexisland.com/bank but you should never trust random dudes on the internet. DYOR first!
- Discord: basexisland.com/discord
- Community ☎️ ☎️ ☎️ every other Monday at 16:00 UTC
- Book 1:1 session: calendly.com/marsxr/basex
- Follow us on Twitter: @basexisland
PS. Vision for BaseX is much bigger than just the island. Just like SpaceX, we are making life multiplanetary starting from the Earth. The code for assurance contract can be also used for other entrepreneurial crowdfunding projects:
