Social VR, like any social network, suffers from a chicken and egg problem that you need content to attract users and you need users to attract content creators. One possible solution, inspired by Basic Attention Token (BAT), would be to create a token and issue it to early users to incentivize them to participate in the network before it achieves scale.
As well as incentivizing early participants in the network such a token would also provide all the privacy benefits BAT provides and eliminate middlemen from ad-networks from the word go. Ultimately VAT will allow world creators to monetize their creativity while protecting user privacy.
Here’s how I think it can work:
- Publishers: Managers of virtual world servers add code to their sandbox (perhaps in the assignment client within high fidelity) which allows the server to double as a ‘miner’ replicating the VAT blockchain and recording transactions in the network. The publishers have a stake of VAT to ensure integrity, tokens are distributed based on Proof of stake (more on how they are distributed below). The publisher is responsible for creating content that keeps the user engaged in their world.
- Users: Client avatars also run a script which communicates with the server and other avatars in the region. That script also runs a smart contract which allocates tokens earned by the user to the user and also any creators of content such as the person who designed the avatar or accessories. The smart contract could inspire creativity in new business models for content creators. This script would also allow the user to decide what personal data to release to the advertising network, perhaps with incentives to be paid more for sharing more. This puts privacy in the hands of the user, not the advertiser or the platform. Users could also be required to hold stake of tokens that they could lose for abusive behavior.
- Advertisers: Initially advertising would be built to support in-world activities such as posters advertising events, portals taking someone to the advertisers world or links to objects for sale in the marketplace. A user triggering an advertising event (eg viewing a poster or passing through a paid portal) will trigger a payment from the advertiser to the user and the publisher in some defined ratio (and perhaps also to the platform, eg high fidelity, as in theory this token could be cross platform if the platforms are based on open standards). Eventually advertising could include real world activities.
- Token distribution: Tokens would be distributed via Proof of Attention in a similar way to how coins are issued at the money tree. First every time period ‘t’ tokens are issued to some number of publishers based on their stake allocation (or perhaps based on how many avatars are in the world). The number of publishers picked per time period will be a fixed fraction of total publishers active. An avatar is then chosen in that world at random to pick another user to receive the token, so tokens are issued sort of like a virtual equivalent of facebook likes.
- Token supply: There’s a fixed token supply that is issued with ‘halving’ every few years. Early users will primarily get tokens through the airdrop and over time the mix will shift to earning tokens primarily from participating in advertising activities.
- Token price: A fixed token supply with a growing network becoming more attractive to advertisers should result in rising token price and distribution of wealth of the network to it’s users and participants. Recognizing this dynamic, advertisers may seek to purchase tokens from users/publishers in advance of needing them to secure a discount on their future advertising expenditure.
- Discoverability: because publishers earn VAT for having users in their world, they will be willing to spend VAT to attract users to their world. The publishers with the best content will earn the most VAT so will be able to bid the most to attract users, creating a virtuous quality cycle allowing the ads to be useful to discover the best content. Thus VAT allows bootstrapping an attention economy without requiring translation into real dollars in the early days of the network.
- Interoperability: VAT’s should be tradable for HFC and other tokens to provide liquidity to users/publishers and to provide a mechanism for advertisers to acquire VAT.
- Legality: Decentralization of the token issuance process, avoidance of an Initial Coin Offering (ICO), avoidance of a central managing agent controlling the network and launching with a clear utility purpose (for advertising) should be sufficient to fail the Howey test and avoid the token being considered a security in the USA.
I’m curious what the community thinks about the concept. If you are interested in the idea and would like to collaborate on developing out the concept please reach out and we can meet in world.