So, I've read the Smart Media Token Whitepaper. It is written in 'Geekanese' so not the easiest to digest. However I think I've got the gist of the concept and in this post I will attempt to breakdown the Smart Media Token value proposition.
I won't cover my personal views, I'll reserve that for a later post.
I also will not cover the technical details of how Smart Media Tokens are set up. The whitepaper is 60 pages long, half of it (pages 12-42) is an "Owners Manual" really geared towards those interested in the mechanics of setting up a Smart Media Token. I'll leave it to others with a more technical bent to audit that!
I'll try and stick to the value proposition and hopefully do so in simple layman's terms.
Understanding the Smart Media Token (SMT) idea
User Generated Content (UGC)
There are a number of social media, blogging and news platforms in the world today that enable users to submit user generated content (UGC), be it posts or comments. Most platforms provide a means for readers or viewers of UGC to express their approval or disapproval of UGC either through votes/ likes and comments.
Until now there has been no way for users to easily monetise their engagement. Smart Media Tokens aims to be a way of enabling website owners to offer their users just that, in their existing platforms.
Smart Media Tokens - powered by STEEM
Smart Media Token (SMT) will be tokens (created on the STEEM blockchain by website owners) that can be distributed to users of social media and websites. Distribution will be based on the 'likes' or upvotes users receive on their UGC. The tokens can be integrated natively into existing websites.
Vote weighting
The token creator determines how much 'weight' each upvote carries. Each vote can carry the same weight. Or there can be stake weight voting, meaning the more tokens a voter holds the more weight their vote carries.
Token creation
Anyone can create a token and give the token a name. Upon creation the token creator determines (a) the total number of tokens that will be in existence (b) the amount of tokens that will be issued upfront (c) the rate at which these tokens will be issued and over what period of time.
Token allocation
The new tokens issued (e.g. on a daily basis) go into a "rewards pool", the voting will determine how those token will be allocated to users. The initial distribution of coins can be determined by the token creator.
Monetising tokens
It is ultimately for the token creator and the token's community to find new and innovative ways to create demand (and therefore value) for the token. SMT simply creates an out-of-the-box mechanism for tokens to be created, distributed and traded in exchange for other tokens/ STEEM and eventually into 'real world' currency. The whitepaper does put forward 5 potential use cases:-
- Content Publishers - using SMTs to reward subscribers through a comments interface
- Forums - enabling it's communities to tokenise their niche
- Online bloggers - using comment widgets on sites like WP and Blogger to reward commenters. Developers of widget can share in rewards
- Moderators - mods of e.g. sub-reddits or Steemit communities (when they come) can launch tokens for subscribers and to raise funds
- Arbitrary Assets - tokens can be pegged to 'real world' assets
How do token holders trade these tokens?
The STEEM blockchain will have an internal market, where all SMTs can be bought and sold. It is also claimed in the whitepaper that an 'automated market maker' (largely based on the Bancor Protocol) can be created upfront 'providing perpetual liquidity to an SMT community'. I.e. Token holders will always have the ability to sell their coin when they want. (NB: I'm not qualified to substantiate or refute this claim)
Shared Influence
Token creators also have the option to decide whether (and to what degree) STEEM holders/ other SMT holders have influence their token's distribution. Meaning that token creators can incentives holders of other tokens to get involved in their token.
Fund raising/ ICOs
Token creators can, if they so wish, sell an initial supply of their tokens (privately or publicly) in an Initial Coin Offering (ICO). The ability to easily set up an ICO will be baked into the SMT creation set-up process.
Splitting Rewards
There is an option to split token rewards between up to eight (for now) beneficiaries. E.g. Creators of comment widgets and apps can code a reward split into their application. Authors can split rewards with other contributors to their content.
Cost of token creation
1 USD (and a STEEM account) is all that is required to create a SMT. The fee is paid in a Steem Backed Dollar which is then burned.
That's it!
There you have it. An overview of Smart Media Tokens on the STEEM blockchain. This is by no means an endorsement of the concept. I'll save my views for another post! However I did think it would be useful to pull out all the key components of this proposal as I see it.
Let me know anything I've missed out (or misunderstood!) in the comments section below. I hope you find this resourceful.