Cryptoeconomics of the Streaming Economy
Blockchain incentives to help you grow with POP Network
Drawing on economics, game theory, and the history of Delegated Proof-of-Stake coins like EOS, STEEM, and TRON, the POP Network cryptoeconomic system is meant to generate a singular result: mass adoption to dominate the $312 billion streaming media economy. All value, implied or explicit, is designed to emanate from accomplishing this goal.
Streaming media makes up nearly 90% of all internet traffic. POP Network is putting YOU back in control.
POP Network is built with the intent of using cryptocurrency to create economic incentives which direct all network participants to engage in behavior that benefits the long-term health and prosperity of the system.
To actively engage stakeholders it is important to provide a clear understanding of how the blockchain generates and distributes POP Network Tokens (POP). Trust comes from transparency, not control.
Every core network role is compensated directly from the chain and paid for through 9.46% annual token inflation
Since POP Network is launching as an Ethereum ERC-20 token prior to mainnet, 25% of the existing 1.6 billion POP are earmarked for a Pre-Mainnet phase Rewards Pool with the largest portions meant to:
- Aggressively encourage early adoption by Content Creators
- Speed the formation of a torrent-based decentralized content distribution network run by Masternodes
- Attract reputable Delegates & Superdelegates capable of securing the blockchain
- Ensure Developers have the resources they need to grow the network
Ten percent of the pool is held in reserve as a contingency.
The purpose of POP Network is to create a fair system of media distribution which creates value for all participants in a way that was simply not possible before blockchain technology. Without enjoyable content this endeavor is pointless.
Content Creators receive 50% of POP Network block rewards, by far the biggest stakeholders in the system
Our hope is that early creators see POP Network as an additive revenue stream rather than a replacement. In fact, much of POP Network’s initial success may depend on leveraging other social media platforms to create a user acquisition funnel.
For example, a Content Creator that is popular on Instagram may use her IG Story to create a trailer for a video which leads to POP Network. That video may be streamed exclusively and generate revenue with POP for a two-week window before being available on YouTube and Facebook for additional monetization.
POP Network helps Content Creators make more and diversify away from over-reliance on any one particular platform for monetization.
In this scenario, think of POP Network as first-run movie theater revenue while YouTube and Facebook become second-run cable television revenue.
If POP Network is seeded with content worth streaming, then the means for that content to reach consumers becomes critically important. This role is where Masternodes shine and why they are worthy of receiving 35% of all POP rewards.
POP Masternodes form a peer-to-peer content distribution network to store and serve all media.
Anyone with 50,000 POP can become a Masternode
Studies dating back decades have consistently shown peer-to-peer storage networks typically follow a power law distribution:
“In systems where many people are free to choose between many options, a small subset of the whole will get a disproportionate amount of traffic (or attention, or income), even if no members of the system actively work towards such an outcome. The very act of choosing, spread widely enough and freely enough, creates a power law distribution.”
As this relates to peer-to-peer torrent networks, simply put, a small subset of seeders does most of the work to service the vast majority of leechers. This is why POP Network heavily incentivizes the first 1000 Masternodes to join.
The belief is that if we get 1000 Masternodes to return their Pre-Mainnet investment in 90 days and double during the 182 day Pre-Mainnet period then those Masternodes are statistically likely to continue servicing the network for the foreseeable future and provide a level of stability typically not found in peer-to-peer torrent networks.
For comparison, the Tron network which (supposedly) is the blockchain backbone for BitTorrent runs a little over 1000 nodes. Below is a chart which outlines potential returns if POP Network maintains IEO price, matches BitTorrent Token (BTT), or grows to rival Tron (TRX).
If POP Network achieves the goal of running 1000 Masternodes then we will have effectively executed a community takeover of the BitTorrent network which Tron (allegedly) paid $140 million.
This is probably why the Tron Foundation stymied our initial efforts to build on the Tron blockchain by erasing an early iteration of this project from Tronscan, the leading Tron block explorer.
Delegates & HODLers
In a traditional Delegated Proof-of-Stake system the job of producing blocks is known by many names: block producer, delegate, witness. In the Superdelegated Proof-of-Stake system, POP Network typically refers to the role as “Delegate”.
Delegates’ base responsibilities are to produce valid blocks of transactions, maintain synchronized state, and keep a history of the blockchain. For their effort Delegates receive 10% of all POP rewards.
POP Network envisions an initial family of 21 Delegates growing to 101 as the network increases in size
Additionally, any change to the governance structure of the network can be proposed by any Token Holder and must be approved by a two-thirds (⅔) supermajority of Delegates with a 30-day confirmation period.
The authority to do this very important job is derived from holding a significant stake of POP. Delegates may stake their own POP or tokens delegated to them by Token Holders (HODLers). Since Delegates will likely have to lobby the community for stake support, it is envisioned that successful Delegates will actively incentivize HODLers to earn and maintain their position.
This scenario ensures that anyone acquiring and staking POP will be constantly rewarded for their role in securing the network.
Misbehaving or inefficient Delegates can be fired by Token Holders if the holders decommit their tokens from the offending Delegate and authorize an alternative Delegate.
Superdelegates are appointed by elected Delegates and have the sole responsibility of protecting the network from harmful or illegal content. Enhanced by Artificial Intelligence and GPU processing power, Superdelegates run machine learning models to produce a risk assessment for each piece of content.
Because the task of Superdelegates has a unique level of responsibility on POP Network, their identity is public, unlike Delegates or Masternodes. Superdelegates are selected by Delegates, earn 3% block rewards from the DPoS blockchain, but operate independently on a permissioned practical Byzantine Fault Tolerant (“pBFT”) sidechain along the lines of Hyperledger Sawtooth.
Because of the highly experimental nature of the Superdelegated Proof-of-Stake sidechain, The POP Network Foundation may be the sole Superdelegate prior to mainnet and may continue to operate in the role until sufficient development has been made to decentralize the function.
POP Network hopes to avoid this problem by having a clear self-funding policy ingrained into the core of the project where all users passively contribute to the betterment of the system.
Dual Token Structure: POP & LIT
To coordinate collective action among network participants, POP Network uses a dual-function structure, similar to EOS/RAM and TRON/Energy.
POP Network Token (“POP”) is the native utility token used to stake, secure, and govern the system while Legitimate Interchange Token (“LIT”) is the stable operational unit
The purpose of this structure is two-fold. First, since various functions on the network are only permissible by staking POP there is a natural decrease in circulating supply as the network grows. At the same time, mass adoption would necessitate a transactional cryptocurrency capable of high-frequency, high-volume usage. These are two very distinct use cases, thus two tokens.
Second, single token Proof-of-Stake systems are at risk of hoarding problems. Since Token Holders are rewarded based on stake, there may be an incentive to hold on for dear life (“HODL”) and choke off liquidity needed for the network to function. This is antithetical to the needs of a streaming media economy like POP Network where token velocity translates to popularity and, ultimately, mass adoption.
In practice, when a consumer wants to stream media, their staked POP uses LIT to exchange for bits of content from Masternodes. The flow of LIT acts as a chain-of-custody marker tracing received media through Masternodes all the back to the Content Creator. As content gets more popular, its creator and distributors get LIT.
The interchange token can then be converted back to POP with 33% made available immediately and the remaining 67% remitted at the rate of approximately 1.1167% per day. Time itself becomes the biggest protector of the network from fraud and a disincentive for malicious behavior.
POP Network wallet specifications are built on a zero-knowledge security model. No personally identifiable information is needed to create the means to interact with the network, except in the case of Superdelegates.
During wallet setup all data is encrypted client-side before being automatically backed up to the POP Network peer-to-peer cloud. Since your encrypted account data is on the decentralized CDN, you (and only you) can access your crypto assets from multiple devices.
POP is initially launching as an Ethereum ERC-20 token with an approximate 182 day Pre-Mainnet phase. During the course of development, the mechanism for swapping tokens prior to mainnet launch will be made available with considerable time for feedback and implementation.
The traditional streaming media value chain is being disrupted as power shifts from aggregators & platforms to content creators & their social networks. That means over a quarter trillion dollars is up for grabs as the old gives way to the new.
For incumbents, blockchain is a threat. For insurgents like POP Network, blockchain is a once-in-a-generation opportunity.