Dude, where does my ETH go?
It’s great that people are enthusiastic about our very simple concept for encouraging people to turn up to events they’ve committed to using their ETH.
You may think the rule of the game is super simple, but it’s actually not.
Enter the “cooling period”.
Yes, you lose the entire ETH if you don’t press “Withdraw” button within the cooling period (the default is set to seven days).
This “feature” was born about two years ago when the post-mortem of the infamous TheDAO hack promoted the security practice called “Pull over Push” — encouraging smart contracts not to send ETH to unknown addresses but instead letting users “pull” the amounts they are owed, in order to minimize attack vectors. In addition, the pull model forces users to pay for the gas when withdrawing their ETH rather than the contract owner paying on their behalf.
In this post, I will talk about the trade off between writing secure smart contract and creating better user…medium.com
When I first hosted a party during DevCon2 in Shanghai, one of the participants did not withdraw his deposit of ETH 1 for over 8 months. During this time the ETH price went up from $10 to over $200.
Historically the proportion of people not withdrawing was about ten percent (based on running my local meetup over ten times). However, when we piloted at EthBerlin, half of the people didn’t withdraw and we donated to EthMagicians thanks to the good will of the EthBerlin organiser Maria Paula Fernández
About a year ago, I wrote a blog post called “A SmartContract best practice: Push, Pull, or Give?” explaining why you…medium.com
We thought the ratio would become a lot lower once we started capturing email address of participants (so that we could remind them to withdraw), but we were wrong. Despite sending reminder emails after the events, 42% (146 / 345) of participants have not yet withdrawn as of writing this (in total the amount is Ξ3.38, worth €600).
- 1. Philosophers’ salon (8 days passed ) = 36 % (13/36) = Ξ 0.26 (€ 47)
- 2. Tour 1 (7 days passed) = 100% (1/1) = Ξ 0.06 (€ 10)
- 3. Cryptoween (7 days passed) = 48% (75 / 155) = Ξ 1.5 (€262)
- 4. OPEN HEARTS … (6 days passed) = 30 % (29 / 94) = Ξ 0.58 (€101)
- 5. Blockchain for good (5 days passed) = 52 % (13 / 25) = Ξ 0.26 (€45)
- 6. Aragon (4 days passed) = 48% (14 / 29) = Ξ 0.7 (€122)
- 7. Tour 2 ( 2 days passed) = 20% (1/5) = Ξ 0.02 (€3.5)
(NOTE: The number was gathered on 4th Nov)
So what will happen to these left overs? That’s a very good question!
Before diving into explaining the detail, let us make clear that we charge a fee to use our platform.
We believe in building a sustainable business model. Finding out whether people would pay to host free events was the biggest question we had. We had lengthy conversations with various event organisers; some of them agreed to pay without asking questions whilst others decided not to go with us. We are still experimenting with various price points.
So did all seven event organisers pay ? Not quite. We fully understand that the price propensity depends on the financial situation of the organisers (mostly depending on whether they have sponsorship or not) and we also wanted to test various use cases regardless of whether they could afford to use our service or not.
So we added the following “Exception closure” which we accepted case by case.
We would like to work with a variety of organisations during DevCon4 and we do not want lack of budget to be the blocker for trying Kickback. We will use our discretion to accept some organisations to take advantage of our service free of charge (or with a discount). The examples would be as follows:
1. The event organisers demonstrated contribution to Kickback in non financial manner (example: status has already allocated multiple staff to support & promote our service on top of the financial investment).
2. The events are more around shaping the future of our entire ecosystem (eg: ETH magicians council of Prague) rather than social gatherings to promote the event of their organisations and sponsors.
3. The events are very unique and it will stretch the boundary of Kickback as a product (eg: some sort of unique activity beyond a normal party, like a scavenger hunt across Prague)
NOTE: If you choose to apply for these exceptions, we will clear the leftover funds and use it to fund further development of our product.
The last note is the most important part. If you pay fee to our service, you decide what to do with the left over. If not, we decide.
The next question you would ask is “Which event paid for us?”
#3 Cryptoween (Golem , Stremr, Omise, and ECF), #5 Aragon, and #7 Alice (and friends) are the ones who paid for us so it comes down for them to decide (interestingly, if they take all the leftover, some of them can actually cover our fee). Leftover ETH from the other events (in total of Ξ 0.92) would go to Kickback to support our further development.
Currently Alice expressed that they would donate their leftovers to “Forgotten Animals”. Alice initially asked you to withdraw and donate in Dai via their donation website but you effect the same if you do not withdraw at all.
Aragon decided to use this to cover the fee they paid to us as well as using the leftover to further funding their bounty activities. Cryptoween is yet to decide what to do but we will update as they decide.
We are still not sure whether this feature is the “Act of evil” or “The viable business model”. The easiest solution is to take some fee and send back to the participants which we are considering adding as an optional feature.
Why do you think people do not withdraw within cooling period despite the fact that they have received reminder emails (unless they opt out)?
One question still remains - for those people who haven’t withdrawn, will being able to opt in for automatic withdrawal (i.e. by the contract) make a difference?