Second, Innovation of production relations in Chainless systems

Enter the white paper series

We start today to unveil the mystery of the chainless system and introduce the relevant contents of the white paper. Many programmers have had close encounters with Bitcoin and ended up empty-handed. We are destined to meet each other and believe your wealth is proportional to your cognition. Our airdrop design does not require you to spend money, but you must spend time reading articles to improve your cognition and contribute to your strength; otherwise, you will miss wealth. Interpreting the innovation of chainless systems” is divided into five sections.

Introduction

The WEB3.0 chainless financial platform is referred to as the chainless platform. Its design breaks out of the constraints of the blockchain, and there is no limit to the impossible triangle of the blockchain. Cryptocurrency is better than advanced ideas, but its development is slow. According to statistics from PANews, at the end of 2022, there are 1,259 active DAPPs in Ethereum, which is really pitiful. The chainless platform adopts the idea of cryptocurrency and designs a transparent and centralized platform. The external characteristics are no different from the blockchain ledger. It is also a platform that implements openness and fairness and cannot be tampered with. Only in this way can the design compete with the ease of use of Web2, be popularized on a large scale, and make the number of DAPPs jump by an order of magnitude. Chainless design has no technical innovation and uses mature technology; it has unique innovations in products, incentives, communities, and core teams. This series has 5 sections in total. One is product innovation; the second is production relationship innovation; the third is business model innovation; the fourth is the role of the core team; and the fifth is the Interesting Reads Chainless Platform.

Second, Innovation of production relations in chain-free systems

In layperson’s terms, production relations are the relationships between people. One of the most important relationships between people is money. The second chapter of the chainless white paper,” Incentives,” and the third chapter, “Community Governance and Indirect Incentives,” are about innovatively designing relationships between people’s interests under legal conditions.

Community economic phenomena require new legislation

Chapter 2, “Incentives,” and Chapter 3, “Community Governance and Indirect Incentives” of the chainless white paper belong to the production relations section. There are almost no eye-catching research results in this cryptocurrency section, and there is not much progress compared with Bitcoin.

After China’s reform and opening up, there was an additional element of entrepreneurs, and their fate determined China’s national destiny. After the emergence of the Internet, there are two more elements: group owners and big Vs. The group owner represents relationships, and Big V represents knowledge. The boundary of relationships and knowledge is the boundary of the Internet. The organization of relationships and dissemination of knowledge transcend national borders and existing legal boundaries. We have watched social e-commerce grow taller, and we have watched them decline. They try to revitalize the value of relationships, which is the intuition of entrepreneurs, but it is also easy to touch the fuzzy zone of the law. As I pointed out in the article “Using Airdrops to Accumulate User Energy” (chainless.hk), “Cryptocurrency is a wide-ranging field, including politics, law, economics, finance, stocks, currencies, products, markets, and technology,” requires a comprehensive ability. The production relations of cryptocurrency are more oriented toward politics, law, finance, currency, and stocks.

Both group owners and influencers Big V belong to the community. We have corporate laws, and there should also be corresponding community laws. Communities are of great value; how can we find a new path without new legislation? Obviously, if it goes through, it will step on a treasure, but if there is no corresponding law, even if it goes through, the community’s advantages will still not be maximized.

Community design attempts that comply with current laws

The core of “Incentives” in Chapter 2 of Chainless is “Participation is Mining,” which means that participants have the opportunity to win prizes. Users do not need to pay any money but may receive reward tokens if they participate in various activities. The easiest way to win is to sign up and win. Users do not have to pay, meaning there is no financing, and it will not violate relevant international laws.

The addition of users brings an increase in the value of the chainless system. This increase does not occur as the system runs longer but is caused by increasing users. The key is reasonably distributing the chainless system token CLY to participants through algorithms. Obviously, we cannot use a time-based algorithm like Bitcoin, but an algorithm based on the number of people. This algorithm is an innovation; details can be found in the chainless white paper “2.3 Incentive Methods for User Communities”.

The algorithm based on the number of people and the data source involves recruiting new people. This method can easily confuse people with MLM. In fact, the areas involved in attracting new customers include MLM, direct selling, and membership systems. Our method is based on the customer soliciting methods of Costco, a well-known membership-based direct seller in the United States. Membership fees are Costco’s most crucial source of profit. Some of its users are found by themselves, but there are old members A brings a new user, B registers as a new member, and B pays at least US$50. At this time, old member A gets US$10, equivalent to a 20% rebate. Although its rebate level is only one level, its new chain, as the “organization level,” can be infinitely long from A→B→C→D→…, while the organizational level stipulated in China can only reach level three, which is A →B→C. If the organizational level of the chain from A→B→C→D is already level four, A has already violated the law. In other words, Costco’s method is illegal in China but not a crime. Therefore, in order to make up for this ridiculous regulation, China divides MLM into illegal and criminal when enforcing the law. Breaking the law will result in a fine, and committing a crime will result in jail time. The laws governing criminals and jail time are pretty serious, and it makes sense. Fines just open the door for law enforcement agencies to shear sheep.

Costco’s new customer rebate is limited to level one and is 20%. Chainless White Paper 2.3.6 Contributor rewards adopt Costco’s regulations. Our recruit reward is 10%, and it is only limited to level one. But there is still 10% used to attract new gaming rewards. Costco’s method is simple and crude. Gaming is the core concept of Bitcoin’s success. By spending the same money, we may be innovative.

The chainless platform has no customer service, which the group owners provide. The group leader serves his direct customers, and the basic needs of customers are transactions, so 10% of the transaction fees of the group leader’s direct subordinates are returned to the group leader. This method has been implemented as a rebate on cryptocurrency exchanges. Justin Sun’s Poloniex exchange transaction fee rebate is 30%. He also only inspires level one.

In comparison, we still have a lot of room for incentives in transactions. How to motivate? We will design according to development.

Be aware of breaking the law and committing crimes

Illegal laws and crimes mainly depend on the social harm caused. For example, if you cross the street without walking on a zebra crossing for convenience, the social damage is not great; it is illegal. If you run a red light and kill someone, it is a serious social harm, a traffic accident crime, and you will be jailed.

Similarly, the harmful nature of society will also be reflected in pyramid schemes. Deliberately organized or led a fourth-level pyramid selling activity, requiring participants to pay fees or purchase goods and services to obtain qualifications to join. There were 50 people involved, each joining for 1 yuan, and the amount involved was 50 yuan. From a formal point of view, it is subjective and intentional, and the external form is also over 30 people and level 4 distribution, but I intuitively tell you that this does not constitute a crime because the social risk is small (the amount involved is only 50 yuan unless there is another substantial direct harm)

To take a step back, even if you define MLM, the participants below do not need to panic. The people held responsible for MLM are the organization’s initiators, decision-makers, operators, and leadership roles. In other words, only the organizers are afraid, not the participants.

No more than two levels of calculation incentives shall be calculated in compliance with current law

The incentive principle of chainless is a one-level incentive. Should there be multi-level incentives? From the point of view of Satoshi Nakamoto’s peer-to-peer principle, it shouldn’t be. However, first-level services often do not fulfill the group leader’s assistance. Who can the group leader ask if he does not understand something? Ask his upline. There is such a problem with the issuance of token PI. Each level has to attract people, but the operation is very complicated. If his downline has questions and asks him, he does not understand, so he can only ask his upline. There is no corresponding profit for the contribution provided upline, so it is obviously a loss. It is reasonable to have two levels; otherwise, the system’s service quality will be worrying. How should the two-level profit distribution be divided? Usually, the direct superior gets the big head, while the indirect superior gets the small head. If there are too many levels, this kind of distribution will inevitably fall into the phenomenon of exploitation where the distribution of the powerful exceeds the contribution, or it may become a secret “company secret.” The subordinates in the insurance company will not know how much the superiors took.

Indirect incentives

Even with only two levels, the contribution of indirect superiors is challenging to quantify. But the indirect superior did the job. We were studying YouTube’s evaluation of broadcasters. We found that 3% of the hosts shared 85% of the total profits of the broadcasters, which means that the contributions of many hosts have not been correctly evaluated. The distribution of benefits to broadcasters is based on an algorithm equivalent to traditional piece-rate wages, which are uncommon in conventional enterprises. Traditional enterprises use a wage or a combination of salary and piece-rate systems. Only considering piece-rate wages is an immature distribution mechanism.

Chapter 3 of Chainless describes indirect incentives. Chainless takes 15% of profits as indirect incentives. The operating costs of the chainless system are meager, and the 15% reward is equivalent to the company’s labor costs. In Satoshi Nakamoto’s thinking, computing power changes, personnel changes, and everything depends on gaming. It would go against Satoshi Nakamoto’s original intention if designed to have a fixed salary. Chainless implements the spirit of gaming in indirect incentives and divides it into 12 levels of reward systems. The bonus gap from the highest to the lowest is as much as one hundred times. The author’s original design of the dividend gap was 12 times. Li Xing and Cui Qi in the team believed that it was not in line with the salary gap of an Internet company, so they revised it. Why has the community mechanism never escaped the mold of interest (hobby)and MLM communities? Perhaps the incentive mechanism is not designed correctly.

Indirect incentives are the Innovation of Chainless. For other descriptions of indirect incentives, please refer to the chainless white paper “3.1.4 User Community and Indirect Incentives”.

Three types of community members should adopt different motivation strategies

In the chainless system, indirect incentives are divided into groups: corresponding group friends, owners, and big Vs. Each group has 4 levels, a total of 12 stories. Since their properties are different, the assessment methods are also different. The upgrade of group friends is based on points, the upgrade of group leaders is based on the number of group friends, and the upgrade of Big V is based on the number of fans. The calculation of the number of group members to which the group owner belongs includes two levels of downline group members because the group owner needs to provide indirect services to the second level of downline group members. The reward for the group leader has nothing to do with the contribution of the downline group members but is only related to the number of group members. The most significant feature is that group members can jump to another group. If they change the recommendation code, they will jump to another group. Everything is competition, and being a group leader is very stressful. Please refer to the chainless white paper “3.5 Benefit Distribution at All Levels” for a detailed introduction. The distribution of indirect incentives is also an innovation of the chainless system. Community innovation is the same as product innovation. The materials are mature, but the combination is Innovative.

User community

The user community is the weakness of cryptocurrency. The author introduced this issue in detail in the article “What Satoshi Nakamoto did not think of and did not say… Series 4: The cryptocurrency community has a long way to go”. Jack Ma said: “Users first, employees second, and shareholders third.” Jack Ma did not say how to achieve this goal or what form it would take. The user community puts users, employees, and shareholders on an equal footing, regardless of first, second, or third place. Jack Ma’s thinking is still a hierarchical concept.

In contrast, Satoshi Nakamoto’s peer-to-peer thinking is expressed as equality, fairness, and openness, supplemented by incentives, which is the idea of ​​realizing a harmonious society. But, a harmonious society is an ideal because the path and form are always unclear. Can a desirable society formed as a volunteer? Satoshi Nakamoto’s answer is: No. Community autonomy is a model close to a desirable society. The community must have a company’s distribution mechanism to produce efficient and reliable operations. However, the mechanism design must comply with Satoshi Nakamoto’s equality, fairness, and openness principles. The chainless community implements this principle.

From a formal point of view, MLM has the characteristics of certain business innovation behaviors. In other words, some business innovations are related to pyramid schemes. How do you distinguish whether it is a pyramid scheme? We have to return to its essential judgment, whether to seek illegal benefits or legal blessings.

Commercial exchanges require credit, and the era of information explosion highlights the value of credit. MLM shows excellent potential for “relationship credit,” but due to opacity and deception, the “relationship credit” is overdrawn, and a good market idea is finally ruined.

The user community of chainless design attempts to reconstruct “relationship credit” and legally unleash the potential of relationship credit, allowing users to evaluate group owners and Big Vs, automatically promote and demote them, and be open, fair, and transparent.

The design of chainless incentives and communities refers to cryptocurrency and is based on the current legal basis. It has to abandon some more creative ideas and does not realize the enormous potential of the community, which is also a pity.

If readers don’t understand the community, you can read “What Satoshi Nakamoto didn’t think of, what he didn’t say… Series 4: The cryptocurrency community has a long way to go” (chainless.hk).

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