Token Curated Registries Explained
Lists play an important role in our lives. The format is simple and efficient. Top charts, top movies, top restaurants, top hotels, and to-do lists. Everything around us is listed. Lists help us make sense of the world. Lists activate the brain’s cognitive penchant for categorization by minimizing choice and making it easier to process data.
Most public online lists are curated by a centralized company or individual. Consumers trust centralized companies to create these lists honestly. As a result, these companies hold all the power and exert an enormous amount of influence. There is a possibility to remove an item from a list with few repercussions or manipulate a list by including advertisers.
Situation like this happened couple of months ago. When a popular rapper Drake released his new album, Spotify added Drake’s music to almost every playlist there is on Spotify. People requested refunds and trust issue developed.
Lately, there is a new concept being discussed and used that can change things — Token Curated Registries (TCRs). Essentially, these are lists that apply an intrinsic token in combination with an incentive mechanism to drive proper and accurate list (registry) curation. They have the potential to increase the accuracy and governance of any online list.
Token Curated Registries (TCRs)
The concept of TCRs can be applied in a wide range of scenarios. From honest curation of top universities to DApp ratings. TCRs represent a decentralized system where the value of the intrinsic token directly reflects the demand to be on the list.
The basic idea for a TCR to work is for there to be a market where honest and effective registry curation is needed to provide consumers with accurate and useful information that is not subjected to the typical problems associated with curated lists today. The format follows a staking model between 3 types of users:
- Candidates;
- Consumers;
- Token Holders (Curators).
Candidates
Candidates are also referred to as listees. By being listed, they receive that desired attention and compensation from the consumers. Being listed on a TCR gives the consumer even more confidence in considering their product. For example, a restaurant that wants to be on a registry of the “Top 10 Restaurants in London”.
Consumers
Consumers are the average users perusing the Internet for information to help guide their decision making into the right direction. No matter what market you are in, consumers want high-quality information about the products they are purchasing. TCRs will help prevent consumers from being let down from low-quality lists. In the case of the “Top 10 Restaurants in London”, the consumers would be those that are looking to find an authentic list of potential restaurants for themselves.
Token Holders (Curators)
Both token holders and candidates want to keep demand for the token high, as this increases its price. They keep demand for the token high by producing high-quality lists, continuously. If listing qualities are high, then consumers will more likely be interested in the registry, resulting in an increasing desire for candidates to be listed on the record, which will increase demand for the tokens. This means that there is a direct financial benefit for token holders to curate the lists expertly.
How Token Curated Registries Work
Each TCR (list) is completely decentralized and isn’t owned by a single entity. Let’s go back to the case of the “Top 10 Restaurants in London”. If a hypothetical restaurant candidate — let’s call it Freddy’s Italian — wants to be listed on the “Best Restaurants in London” TCR, it needs to apply to the TCR by making a deposit denominated in the TCR’s intrinsic token.
If the majority of the TCR’s token-holding community votes to accept Freddy’s Italian as a “Top 10” restaurant in London, then the restaurant will appear on the list, get to keep the tokens it deposited, and be able withdraw the tokens anytime they want to leave the TCR.
If the TCR’s token-holding community doesn’t think that Freddy’s Italian should be listed on the “Top 10” restaurants list, they can challenge the restaurant’s application. If the majority of the community votes to deny Freddy’s Italian, it gets rejected from listing and must forfeit its deposit to the TCR. The deposit is then divided as a reward among token holders who participated in the challenge.
Candidates and token holders continue this process, until all candidates either receive a spot on the list or are rejected. In this idealized scenario, consumers searching for “Top 10 Restaurants in London” can now enjoy a Wisdom-of-the-Crowds driven, economically-incentivized final product that isn’t owned and isn’t manipulated by any single party. Theoretically, a TCR should be more accurate than a traditional list because people are willing to stake economic value for an entry they strongly believe belongs on the list.
One of the most positive aspects of a TCR is its credibility. With the community incentives to challenge applications as well as listees, the TCR ecosystem can self-regulate and fight off many common attacks. People can be confident that TCR ecosystems help protect against trolling, madman attacks (purchasing the majority of voting tokens and populating the registry with low-quality listings), as well as registry poisoning (when a listed entity becomes of degraded quality after being admitted to the record).
Problems with TCRs
There are some unanswered questions with TCRs: Will TCRs lead to polarised lists, in which groups of like-minded people will continue to only pay attention to lists they are contributors to? Will TCRs create echo-chambers? Could non-blockchain companies implement the TCR concept using traditional software and micro-payments in fiat currency? What kind of attacks are TCRs susceptible to, and how will they protect themselves? Moreover, they are far from ready for the average consumer.
TCRs may bring an economically-driven way to any online lists, they are a fascinating. Practical application of blockchain technology that have the potential to create next-generation platforms for online list curation. With TCRs we may see encouraging high-quality records. Consumers, candidates, and token holders all benefit from TCRs. This may be a win-win-win registry system, and it is likely we will see an increasing number of them over the next few years.
References
- What It Means When Spotify Has Nothing to “Recommend” But Drake
https://pitchfork.com/thepitch/what-it-means-when-spotify-has-nothing-to-recommend-but-drake-op-ed/ - Why Token Curated Registries Could Become the Lists of the Future
https://bitcoinmagazine.com/articles/why-token-curated-registries-could-become-lists-future/ - All you Need to Know about Token Curated Registries (TCRs)
https://btcmanager.com/all-you-need-to-know-about-token-curated-registries/ - Token-Curated Registries 1.0
https://medium.com/@ilovebagels/token-curated-registries-1-0-61a232f8dac7
