How people will be able to earn crypto for a living using Trust Price Protocol
A long time ago, I envisioned a world where people can earn their income from providing value on blockchains. So, a new socio-economic structure with, instead of companies, employees and customers, there are blockchains that enable users to make a living. Think of it like making Uber fee-less. Taking out the middle man. The possibilities for these ‘business-models’ are endless. Hence, I wanted to turn this idea into something even bigger and better and make something entirely different. What if you can buy and sell any (unique) item with independent pricing? How much easier would life become for everyone? How big of an impact can it make on the environment, if instead of throwing out old stuff, people re-sell them? If, instead of buying new products, you can buy second-hand items that you trust? Without a middle man. And what if.. we have trustless automated private data computation on the blockchain?
Earning some kind of income through blockchains was not possible before proof of stake technology emerged a few years ago. By staking tokens, users can earn passive income, as tokens held on exchanges dilute in value over time. However, the rewards of Proof of Stake are marginal, and pose risk. A person would absolutely not be able to live from these rewards when the token is in a bear market. Instead, to make income from tokens, a person should provide some kind of value that is independent from the crypto market capitalization (e.g. through providing knowledge to other people).
Earn by staking or by providing value
In simple terms, the TPP token can be used to earn through staking or through transacting with the blockchain. On the ‘staking’ side, users lock up their tokens, and automatically earn rewards. On the ‘transaction’ side, users can earn tokens by selling and estimating items. Here, users can also buy items and trade TPP tokens for other tokens and vice versa.
Staking
Firstly, on the ‘staking’ side, token holders stake their tokens by delegating tokens to validators and earn tokens from each successful Trustless Transfer on TPP. On top of that, stakers earn inflation rewards. These come from transaction fees collected from TPP transactions, and newly minted TPP tokens. The protocol makes sure that the amount of TPP staked is always around 67%, which works the similar to the ATOM token. On TPP, the minimum yearly inflation is 7%. The inflation can change by up to 100% to a maximum of 107% (recalculated each block) , until the total staked amount is 67%. Once it is over 67% the inflation will slowly decrease back until the minimum 7%. Hence, the total staking rewards are flexible and depend on the amount of staked tokens, block time and the amount of inflation. The period for undelegating (unlocking) is currently 21 days, like the ATOM token. Governance proposals can alter these dynamics, the undelegation period may be altered, and the proposed inflation may be changed. Tokens that are not staked lose value over time, this is to make sure there are enough tokens staked, keeping the protocol secure.
Transactions
On the other side, the ‘transaction’ side of TPP, interacting with Trustless Contracts, Trustless Transfers, and other transactions are possible. For Trustless Transfers, price estimators make sure that supply and demand are met. They are incentivized to be independent, and should create prices that meet both the seller and the buyer’s expectations.
Estimation rewards on Trustless Transfers
For a successful transfer using Trustless Transfers, the best estimator gets rewarded. So in order to earn tokens, an estimator should make prices that are attractive for both buyers and sellers. Here’s how it works. A seller sets a deposit, required for each estimator. To make an estimation, only a single transaction is necessary and includes the deposit, which costs around 0.10$. If you are the best estimator and the deposit was 5$, you get 5$ (this reward is given by the seller). However, in case the item was not transferred, the deposit of the ‘worst’ estimator is given to the ‘best’ estimator. By shifting funds each time to the best estimator, the protocol adjusts to find the optimal price.
- The best estimator earns a reward equal to the deposit when the estimation is the final price (i.e. the median of the aggregated estimations)
- The lowest estimator loses the deposit when the price is not accepted by the seller, and is given to the estimator with the median +1 estimation.
- The highest estimator loses the deposit when the item is not sold within a set period of time, and is given to estimator with the median -1 estimation.
- The deposit can not exceed a certain percentage of the final price (e.g. 25%, this can be altered through governance by the community).
Rewards on other Trustless Contracts
Using trustless private data computation, new kinds of applications can be built never seen before. For example, auto-ending private auctions, or a conditional auto-transfers of assets. The user inputs are encrypted and unknown, and the output is deterministic. Based on the computed output, a contract may reward or charge the user for their user input. So, contracts can encourage interaction by rewarding users with TPP tokens.
Value through Trustless Transfers
When the demand for items on Trustless Transfers increases, the demand for TPP tokens increases. So, the TPP token price is contingent on the demand for items. Estimators estimate attractive prices, so that potential buyers are converting other tokens to TPP tokens. Then, TPP tokens become more valuable. Hence, rewarding estimators generates more demand for TPP tokens.
To stake or not to stake?
It will be interesting to see how trustless private data computation can encourage knowledge sharing and remove middle-men for all kinds of purposes. For people with item-specific knowledge, one day it may become a reality to earn an income trough estimating items on TPP. Further, staking TPP tokens can become a great passive revenue stream, as it is contingent on inflation rewards and network growth. People interested in estimating items can find a functioning marketplace here (linked to a testnet, downtime can be expected) or learn more at trustpriceprotocol.com.
