Design Concepts of Profitable Crypto Community “Chainless”
The previous section explained the similarities and differences between communities and companies. Based on this foundation, we designed the universal community software “Simi,” intended to serve the “Chainless” system.
The “Simi” software has an international version and a Chinese version. The latter is relatively simplified due to Chinese laws and regulations but includes backups of the content needed by the international version. The international version can fully display all content, including that backed up in the Chinese version. For a detailed discussion on crypto communities, please refer to Chapter 3 “Community Governance and Indirect Incentives” of the “Chainless White Paper.”
The system integrates two modes: user community and ecological community. Ecological projects, as independent entities, develop on the blockchain and have the characteristic of third-party independence. For Chainless, early ecological projects are similar to traditional internet infrastructure eco-investments. Later, ecological projects also have tokenized credential applications, enhancing the platform’s prosperity with more usability. Through a unified community platform, “Chainless” and its ecological projects can effectively interact. Given the limited commonality among various ecological projects, we suggest allowing similar projects to freely form groups to improve communication efficiency.
We classify both user communities and ecological communities as “crypto communities.” This aligns more with the current industry development trend and effectively integrates resources to enhance overall community efficiency. This integration strategy will enhance the attractiveness of the Chainless platform and promote its long-term healthy development.
I. Governance Framework of Chainless Community
1. Governance Philosophy
The core of Chainless community governance lies in coordinating the interests of all parties through fair, transparent, and efficient processes to achieve sustainable development. Governance is not the goal but a means to implement incentive mechanisms and maintain community fairness and justice.
2. Governance Principles
- Maximize Autonomy: Community members have broad autonomy with open and transparent decision-making processes.
- Free Participation: All token holders have voting rights and can actively participate in community governance.
- Efficient Operation: Artificial intelligence and automation technologies are utilized to minimize human intervention and improve efficiency.
- Checks and Balances: Multiple checks and balances ensure power balance and prevent power abuse (community voting, proposal mechanisms, election systems, and early investor checks).
3. Governance Structure
- Community Members: All token holders constitute community members with voting rights.
- Core Team: Responsible for the community’s daily operations, elected by the community through contract voting and subjected to community supervision. Team members rotate to ensure continuous vitality and innovation.
- Automated Systems: AI and automation technologies will be used to handle daily affairs, improving efficiency and transparency.
4. Decision-Making Process
Community members exercise their power through voting to determine the community’s development direction and major decisions. Throughout the entire process, data is transparent and immutable. The proposal mechanism allows community members to actively participate in community governance and supervise the core team’s work. The token holdings of early investors provide additional security for community governance.
Through the above governance framework, Chainless community aims to establish a fair, transparent, efficient, and sustainable ecosystem.
II. Indirect Incentive Mechanism of the Chainless Community
The traditional cryptocurrency community mainly relies on direct incentives (e.g., token rewards), which is similar to piece-rate wages in a company and easy to quantify. However, ignoring indirect incentives (similar to position-based wages) may limit the long-term development of the community. In the internet age, indirect incentive mechanisms are often overlooked, but their importance in the long-term development of enterprises should not be underestimated, as demonstrated by hundreds of years of corporate management practice.
A typical example is YouTube’s ad revenue sharing model (55% to creators, 45% to YouTube). Although both creators and users jointly create value, profit distribution is mainly concentrated between the platform and the creators, with user contributions lacking effective quantification and incentive mechanisms. This highlights the importance of reasonably quantifying contributions and effectively distributing rewards, which is the core issue that the indirect incentive mechanism needs to address.
The indirect incentive mechanism we designed is based on a grading system, which quantifies and evaluates the contributions of community members through a points system. This is not an easy task as it requires comprehensive consideration of both current and historical contributions of members and is evaluated through the following methods:
- Machine scoring: Using artificial intelligence technology for objective evaluation.
- Third-party evaluation: Introducing independent third-party institutions for assessment to ensure fairness (if necessary).
- Community evaluation: Community members participate in evaluations, reflecting community consensus.
Initially, due to limited data, the evaluation system may not be perfect. However, this is similar to YouTube’s early experience with machine evaluation. As data accumulates and algorithms are optimized, the evaluation system will gradually become reasonable and improved. Unlike YouTube, which lacks an evaluation mechanism with user participation, the Chainless Community will change this situation.
The Chainless Community’s indirect incentive mechanism combines direct and indirect incentives and involves community members in the evaluation process, effectively quantifying and incentivizing user contributions. This not only better motivates community members to participate actively but also promotes the long-term healthy development of the community. This mechanism is closely integrated with community governance, and the adjustment and improvement of the points system itself is an important part of community governance. Therefore, we discuss governance and the indirect incentive mechanism together to emphasize their interdependence and combined effect.
III. Power Structure & Operational Mechanism of the Chainless Community
The governance model of the Chainless Community draws on the transparency and accountability of listed companies. Community power is mainly reflected in the following aspects:
1. Decision-Making Power (exercised by token holders):
The ultimate decision-making power of the Chainless Community rests with the holders of Chainless tokens, similar to the power of shareholders’ meetings in listed companies. All proposals involving community interests need to go through the community proposal, discussion, and voting process to take effect. This includes:
- Adjustment of benefit distribution: Adjustments to reward mechanisms, token distribution, etc.
- Core team management: Nomination, removal, and performance evaluation of core team members.
- Formulation and modification of community rules: Formulation, modification, and supplementation of community charters, rules, and regulations.
The above is based on tamper-proof fundamental data provided by algorithms. If results are based on algorithms, they follow the algorithm; if not, the community votes based on data.
2. Supervision Power (exercised by token holders):
To ensure the transparency and accountability of community governance, token holders have the following supervision powers:
- Audit supervision: Electing audit leaders, selecting audit institutions, and reviewing and approving audit reports, core team work reports, and foundation reports. The transparent nature of the Chainless system makes the audit process relatively simple. Initially, reports from the core team and the foundation may be combined.
3. Suggestion Power (exercised by all community members):
All community members can exercise suggestion power, including:
- Product suggestions: Proposing suggestions for product functions, improvements, etc.
- Community governance suggestions: Proposing improvements to community rules, operating models, etc.
4. Reward Power (exercised by community members):
- Contribution recognition: Community members can recommend and evaluate members who have contributed to the community and participate in the determination of rewards.
5. Punishment Power (exercised by community members):
- Member management: Participating in the evaluation and decision-making of community member promotions and demotions.
- Rule enforcement: Participating in the formulation and enforcement of community punishment regulations.
- Technology selection: Participating in the selection and adoption of automated governance machines.
6. Continuous Evolution:
The governance model of the Chainless Community will continue to improve with the development of the community. New issues arising in practice will be resolved through the community proposal and voting mechanism, continuously supplementing and improving the community power structure. This power structure aims to ensure fairness, transparency, and efficiency in community governance while maximizing the interests of community members. By combining the principles of decentralization and transparency, the Chainless Community aims to establish a truly member-led, sustainable ecosystem.
IV. Hierarchical Structure and Incentive Mechanism of the Chainless Community
The Chainless Community adopts a five-tier structure with twelve levels, coded by the twelve zodiac animals (Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Goat, Monkey, Rooster, Dog, Pig), to reflect the contributions and status of community members. This grading system also makes it possible to use NFTs as identity markers in the future, with a full set of zodiac NFTs having special significance.
1. Community Hierarchy:
- Core Layer (Spiritual Layer): Composed of the founding team members, implementing a real-name system and performance appraisal, mainly responsible for community development. Members must maintain high performance, otherwise they will be replaced by higher-ranking members. Core layer members also follow the twelve-level system and are responsible for improving community governance and promoting community transparency and automation (details in the next section).
- Mentor Layer (Guidance Layer): Four levels (Monkey, Rooster, Dog, Pig) responsible for guiding and training community members.
- Management Layer (Backbone Layer): Four levels (Dragon, Snake, Horse, Goat) forming the backbone of the community, responsible for daily operations and management.
- Contribution Layer (Participation Layer): Four levels (Rat, Ox, Tiger, Rabbit) consisting of ordinary members who contribute to the community.
- Token Holder Layer (Passive Layer): Members who only hold Chainless coins, do not participate in community activities, do not enjoy contribution dividends, but enjoy token holding income and have voting rights.
2. Incentive Mechanism:
The Chainless system adopts a dual incentive mechanism: token holding income and contribution dividends. 15% of the total income is distributed as contribution dividends (the ratio can be adjusted according to actual conditions). Contribution dividends are distributed according to member levels (twelve zodiac animals), with a gap of 100 times between the highest and lowest levels. Core layer members also participate in contribution dividends, with the minimum level being Dragon level. In the early stages, core layer members will receive salary compensation. A decrease in member activity will lead to demotion, with a last-place elimination system.
3. Benefit Distribution:
The Chainless Community’s benefit distribution model is different from traditional companies. It embodies the “integration” characteristics of Web3 and cryptocurrency communities, where token holders, contributors, and the community form a whole. This is similar to a new type of “universal ownership”, but not egalitarianism. Chainless coins effectively link the interests of community members. Chapter 2 of the Chainless White Paper details the distribution plan for CLY coins, with roughly 50% for token holders and contributors each. Contributors can also receive additional contribution dividends. As the community develops, the new value created by contributors will increase their share of total income.
4. Voting Rights:
All Chainless coin holders have voting rights. Token locking or pledging does not affect voting rights, similar to an equity system.
V. Revenue Sources and Models for the Chainless Community
The revenue sources of the Chainless Community are diversified, relying on its unique decentralized financial platform and combining the advantages of e-commerce models to form an open and transparent “financial supermarket.” The income mainly includes the following aspects:
1. Platform Revenue:
- Advertising Income: Revenue from placing advertisements on the platform.
- Traffic Income: Fees for providing traffic services to other projects or platforms.
- Transaction Income: Fees or commissions generated by transactions on the platform.
- Service Fees Income: Fees for providing various value-added services, such as data analysis, risk management, etc.
- Investment Income: Income generated from the platform’s investment activities.
2. E-commerce Revenue Model:
Unlike the traditional financial industry, the Chainless Community uses decentralized advantages to directly connect users with financial product providers, serving the role of “financial e-commerce.” This disrupts the traditional financial intermediary model, such as banks and securities companies. The community can sell:
- Third-party Financial Products: Various types of financial products, such as funds, bonds, etc.
- Insurance Products: Various insurance products provided by insurance companies.
- Investment Products: Such as digital assets, NFTs, etc.
The community earns commissions or agency fees from the sale of these products.
3. Transparency and Trust:
All income and distribution in the Chainless Community will be made public in a transparent manner, establishing user trust in the platform. The complexity of financial products often requires professional explanation and Q&A, and the community provides an ideal place for consultation and discussion. The income model of the Chainless Community innovatively combines platform operations and e-commerce models, making full use of blockchain technology advantages to build a decentralized, transparent, and efficient financial ecosystem. For detailed profit distribution plans, please refer to Chapter 3 of the Chainless White Paper. The Chainless Community is committed to becoming a convenient, safe, and reliable “financial supermarket,” providing users with a full range of financial services.
VI. Summary of the Chainless Community: Building a Fair and Transparent Web3 Financial Ecosystem
The Chainless Community aims to provide users with benefits and participation beyond Web2 through a unique community structure and incentive mechanism. Its core goal is to build a fair, transparent, and efficient Web3 financial ecosystem, ultimately achieving community autonomy.
1. Community Structure and Roles:
The Chainless Community cleverly combines public and private domain operations, akin to Facebook’s department store model integrated with a financial boutique model. Mentors (KOLs) are responsible for public domain operations, similar to opinion leaders on Twitter, creating content and promoting products with their expertise. Group owners handle private domain operations, similar to WeChat group owners, maintaining community activity through interpersonal relationships. This combination of public and private domain operations, which Web2 lacks, allows for more effective user engagement and balances the interests of top and bottom-tier users.
2. Incentive Mechanism and Profit Distribution:
The Chainless Community’s incentive mechanism fully considers the phenomenon of “cutting leeks (exploiting novice players)” in Web2, striving for transparency and fairness:
- Advertising Revenue: Calculated based on turnover rather than the traditional pay-per-click model.
- Product Promotion: Mentors must review and personally purchase recommended products to ensure quality and reliability.
- Risk Control: A sandbox mechanism is used, first piloted in small-scale communities to reduce risk, with compensation for participating users.
- Performance Evaluation: Specific evaluation criteria are set for mentors, group owners, and contributors, with an elimination system to ensure community members’ enthusiasm and efficiency.
- Profit Distribution: Community income distribution is transparent and open, ensuring fair returns for all stakeholders.
3. Innovations and Breakthroughs:
The innovations of the Chainless Community include:
- Combination of Public and Private Domains: Effectively integrates public and private domain resources, balancing the interests of different user groups.
- Dual Incentives: Utilizes both direct incentives (contribution dividends) and indirect incentives (token holding income) to motivate community members.
- Transparent Governance: All community activities and income distribution are transparent, enhancing trust among community members.
- Financial Applications: Applies cryptocurrency technology to actual financial scenarios, providing a feasible model for Web3 financial applications.
4. Continuous Improvement:
The Chainless Community’s model is still being explored and improved, with specific plans discussed and upgraded within the community. This reflects the spirit of community autonomy and continuous improvement. The Chainless Community’s attempt is a bold exploration of Web3 financial applications, aiming to solve many problems in the Web2 financial system and ultimately achieve a more fair, transparent, and efficient financial ecosystem. This will be another revolutionary change in financial generative relationships following Bitcoin.
We will specifically discuss the roles of crypto teams in the next section.
