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The Token Is The Product (mirror.xyz)
7mo ago by timdaub.eth •

I read this and was inspired by it. I think over the last few months, we have spent almost no time whatsoever on improving our token, and so this post gave me some perspective into product-related tasks that are not "product" but token-related. For example, in roadmap calls and day-to-day calls, we've mostly focused on creating lasting utility for those using the product. These changes include adding comments, making the site faster, smoothing the wallet UX, etc. However, by not caring about the NFT that we're selling, we've actually also created new problems that arose from simply not addressing the token's basic flaws, some of those being that (1) it cannot be transferred or sold, (2) it isn't used as a symbol for membership to the group, (3) it's not valuable, (4) it's not making us any money. With the recent meme coin craze and considering that this is now just a "market fit" for what they're not catering to with our product, I do think we have to spend some significant time each week on improving the interaction between Kiwi News Protocol and the token. So then, how could this look? First and foremost, I think it is important to stay within the realm of legality. There's a fair amount of non-clarity related to tokens and meme coins, and I'd hate to spend time figuring out stuff with lawyers instead of building a product. I also think there are many ways of playing "with a token in a product." For example: 1. Drakula has integrated with Degen and it seems they have a partnership going on that is mutually beneficial. But this probably also means that Drakula didn't have to do a bunch of complicated legal stuff to actually launch a token. 2. Warpcast has no token, but they have built such a great product that, at one point, some community members just started to launch tokens, and so the effect of having financial incentives on the app became equal to them launching a token themselves. The meme is that you can get rich by being on Farcaster. This is not because the FC team launched a token but because the community is full of opportunities. 3. Lens and ENS are selling identity primitives in the form of handles. To me, this is particularly interesting because it is much easier for me to say yes to as selling a handle for money seems to be much less "launching a security" related than launching an actual ERC20 token. 4. NounsDAO has added a token to its community, but the intentional and slow distribution of the token has made the community consist of many high-net-worth and influential people. This is to say that it is not necessary to just go full send and launch an ERC20 Kiwi token. Besides, I've never been a fan of "big-bang" software development. Instead, I think we should also do this through iterations, as we do with anything else. And so, since we have the Kiwi Pass NFT, the question is, what can be done to improve the product value by improving the token? Here are a few ideas: 1. If you remember, we once dynamically priced the token based on demand. We could reintroduce it, but the price would be determined by, e.g., WAU or MAU growth direction. If WAU or MAU growth is decreasing or negative, we'd drop the token price, whereas with MAU or WAU growth, we'd increase it. However, I don't feel like the price is actually that related to the number of new users onboarding anymore. 2. The Kiwi Pass NFT is technically non-transferrable at the moment. Or, at least, you won't get additional upvoting and commenting power if you transfer the NFT to a new account. But this also means that it makes the token basically worthless on the secondary market, as there's nothing to be gained from buying it. We could change this and hence allow people to sell their token on the secondary. This would, however, create some weird effects on the protocol, for example, that we wouldn't know what to do with a seller's data. Should it be deleted upon selling the pass? 3. We've been crediting users with karma through the upvotes they received from their fellow Kiwis. But this karma isn't onchain, and in a pre-EIP-4844 world, it was also not possible to take this data onchain (too expensive). But things have changed recently, so I feel like there is now a new chance of attempting to do this. For example, I've created a new Solidity library that can validate whether a signed Kiwi News message is valid and stems from a Kiwi News NFT holder. In turn, this means that a smart contract could start counting a Kiwi Pass holder's karma and make that number available on storage. And this could be used for all sorts of interesting stuff: (1) Someone could use this to airdrop tokens to others, (2) We could launch our own token on the basis of this, (3) proof of personhood project could use this data to improve a person's trust score, (4) other projects could base their token distributions on this, (5) we could redesign the NFT such that it permanently displays the karma point number for a user, giving them bragging rights. 4. Bonding curves?? 5. More work on tipping Anyway, in conclusion, I think that while it has proven very useful to spend a lot of time iterating on the Kiwi News website and product, it is probably now also a good moment to spend more time on the token design and to properly re-align the protocol towards the trajectory that it was initially intended. I've written this post intentionally as a comment on Kiwi. I hope others find this interesting, and I'd love to hear people's feedback and learn what they think can be done.
2) contradicts 3), I would say. If the Kiwi NFT is a status token with karma and benefits, it should be only transferable to another account of the same person. Otherwise, if the karma benefits are large enough, there could be a market for "pre-leveled" accounts, like in gaming.
In hindsight, 3) might depend on the future nature of KN: - more public goods: the token(s) might be a mixture of personal status and external institutional support for being a neutral attention amplifier for the crypto communities - more commercial: depending on the nature of the story, KN integrates with prediction markets, art or token auctions to provide users with the ability to act on their upvotes (see https://news.kiwistand.com/stories?index=0x66042c07d02bd9d5deb6f2d6ecdc40dc2df402ceb3e92a3821765d37bf9bc79e787e95d8 for models)
What makes the "Kiwi NFT as a status token" tricky at the moment is that it is factually not a status token, right? It only costs 4 USD, so everyone can buy it. However, nobody sets their Kiwi Pass as a profile picture to signal membership (compare with, e.g., Nouns or Milady). If you think about the Kiwi NFT as status, then there'd have to be some kind of skill or cost related to maintaining or acquiring it, but since it is also the ticket that lets you onboard and post here, those motivations are disjoint. On one hand, I'd love to see really expensive Kiwi Passes being traded on OpenSea similar to how expensive Nouns are — this would capture the value of participating and nurturing this community. We'd all get paid, and we'd have a treasury to fund the project. On the other hand, we're a consumer-facing application, and our mission is to promote the good values/projects/actors in the crypto community. However, that may also be fairly populist, as in, everyone should be able to own a Kiwi Pass to make participation a low-bar activity. Growth is important. As I said earlier, I don't see these two things going hand in hand somehow, and I've felt inclined to frame the Kiwi Pass less like a status symbol and more simply like a ticket or a pass, an obtainable marker that grants you the right to store your usage data on the network.
Maybe we could have a dual-token model, where one NFT just lets you post, and the other NFT is status-oriented? E.g., you can only mint it if you have X amount of karma
That is an option, but frankly, having one token is already enough of a headache. As a founder, I want to keep things as straightforward and simple as possible, so if we can avoid it, let's focus on one token and not multiples. I think it's more about finding the right token model that is truly positive for the product. E.g., a few traits, I'd find reasonable is that the token and its price somehow can moderate demand and supply in the network “Tax the congestible [asset] and subsidize the increasing returns” - Glen Weyl For us, what is congestible? Surely, it is when people have multiple accounts and upvote their own content, when someone submits marketing content, etc., all of this "contests" the network, or when someone uses the Kiwi News network to store unrelated data. Whereas for "increasing returns," if every new user squares the network's value, then a token that increases in price with more users onboarding doesn't seem appropriate (unless all those new users are spammers).
Reminds me of Polynya's: "blockspace demand is not the primary long-term product for the industry, it's monetary premium"