A Discussion on the POAP Commercial Use Policy

This thread is for a broad discussion of the commercial use policy being introduced on April 18th, 2023.

The rule set being proposed is summarized below for reference:

When the new module is available, issuers using the Proof of Attendance Protocol should anticipate the following:

  • The Proof of Attendance Protocol will remain free for personal use, with all associated costs subsidized by POAP Inc.

  • Today we choose to subsidize the cost of most drops at our own discretion, particularly where savvy issuers are proposing drops that align strongly with POAP’s broader mission and vision. We anticipate that in practice, the only issuers impacted by these changes are those executing large commercial drops.

  • Issuers who have a history of using POAP autonomously may opt in to commercial pricing before May 31st, 2023 to be grandfathered in at a rate of $25 per 100 POAPs through to December 31st, 2023.

You can learn more about how commercial use is defined by the POAP Curation Body here.

We want to make this change in a way that encourages the creation and distribution of precious digital collectibles, while accounting for the needs and limitations of all commercial and would-be commercial users.

To that end, please use this thread to ask questions and provide feedback, as your thoughts are invaluable to us in our ongoing efforts to steer POAP safely to port.

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I’m glad to see POAP moving in a direction that allows it to become a sustainable business.

What are the actual costs associated with producing a POAP, and what are the key cost drivers?

I’m going to make a guess that the review and approval process is the expensive part, and the actual minting of POAPs is very cheap.

If that is the case, perhaps there can be a flat fee for the creation and review process, with free mints up to a certain large-ish amount.

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I believe that sustainability is the most important thing - we all love POAP and want to see it last for our entire lifetime + more.

While many people have become accustomed to getting many internet services for free (facebook, instagram, google search, etc), it’s because those providers are extracting values in others ways - through selling our data. It’s not actually free.

POAP is the opposite of a value extractor and has been essentially a pure value-giver for more than 4 years now. I think it’s time to align incentives more, and having issuers pay for commercial use cases feels like a great starting place!

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Hey, welcome to the forum!

The analysis you’re offering is a good one, but there are a few nuances. The creation and review process is done in context.

Something that’s okay for 50 POAPs, might be okay-ish for 100 (but this is a harder call, and might take longer) and is not okay at all for 10,000. It might be “well, if you really feel like you need it, then maybe…” for 500. So, quantities are a spectrum. That’s part of the rationale behind making pricing volume-based.

That brings us to a second thing: Rate of minting (in addition to total volume) has a notable impact. Servers have a load they can handle, and (eventually) blockchains have a hard limit on throughput. Minting 50 POAPs in 15 minutes, vs minting 5000, have noticeably different impacts on other people’s ability to use the system. Larger drops are also harder for issuers to secure, and tend to wind up creating a proportionally higher load in other human-in-the-loop portions of the system, like customer support.

In an eventual end state, its likely that the pricing will be something like a subscription which permits minting up to a certain cap in addition to some other nice-to-have features, with optional top-ups for additional POAPs available for purchase.

But for now, we’re just trying to open the conversation around commercial use being a commercial offering, so the idea was to keep the model simple and directionally correct, while giving the community plenty of time to anticipate changes. Hope this helps clarify how we’re thinking about it :slight_smile:

Ensuring the long-term sustainability of any platform is crucial. While this change may not be favorable for all brands, it is just the start, with possibly different subscription models available in the future. Therefore, it’s important for POAP to take a stance and begin its path toward sustainability.

There are benefits to this new model. One of the benefits of this new payment model is that it encourages brands to be more diligent in distributing their POAPs to reduce farming activity. Additionally, because these products now have a price tag, they will be viewed as more premium and rare, creating a more exclusive user experience and improved user engagement. Knowing the brand spent more money on a product versus obtaining it for free inherently provides more perceived value for its users. Finally, brands will be more efficient with events as they will be forced to forecast and better predict user participation.

Providing sustainability is necessary for the poap ecosystem because of the cost of reviewing issuer work. poap has become an essential application for the ethereum community and a great way to attract a large number of non-cryptocurrency users into the crypto community. The cooperation with well-known brands is the most practical marketing to promote poap application.

This is a rather sad twist. While I agree it is crucial for protocols to be sustainable for the long term, not allowing alternative routes for users who desire to use the protocol is simply anti-web3.

It isn’t “Proof of Participation as Defined By Curation Body”. POAP is (was?) a protocol for proving attendance. Of course, an attestation isn’t worth the bytes it takes up if it isn’t issued by a legitimate provider. So far the POAP team has done an outstanding job curating the drops, and this has bootstrapped substantial legitimacy in ecosystem. Yet, it is still frustrating how little has been done to facilitate others interested in using the protocol.

Why is there no documentation on the smart contracts that run POAP? Is it possible for non-POAP related entity to issue “POAPs” if they pay the fees?

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Great questions. Last I checked the smart contract functionalities are all onlyOwner, with closed source backend/UI, not possible to interact with the “protocol” directly as a user.

We faced the similar dilemma before, and was never able to issue a poap (by a Canadian entity) :confused:

Discussion from #23196 - Shir ya Khat Astronauts club

I was expecting introduction of a pay wall for POAP services for some times. As the platform has matured, it is in a suitable state to implement a small fee, similar to other platforms like Zora, Mirror, and Manifold which have recently introduced service fees. This move will ensure the sustainability of POAP development, which is crucial for the longevity of the platform.

While introducing a small fee may have some disadvantages, such as a reduction in POAP issuers who may seek free alternatives, it will ultimately lead to a reduction in spam and an increase in the quality of POAP drops.

I believe 25c per POAP is reasonable price and will not be a burden to issuers. However, I understand that some issuers who frequently issue POAPs or hold large events may find this new fee structure challenging. As an example, Daily Dose issued 138K POAPs, which would amount to $34.5K – a significant cost to bear.

Nevertheless, POAP is a platform that is building in public. We can always revisit and adjust these parameters to ensure that POAP remains accessible to all users while still generating value for the community. With over 6 million POAPs issued for 63,112 events (95 POAPs per event), I am confident that this new pay wall will be a positive step towards the sustainability and growth of POAP.

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gm. thank you for building in public and providing the opportunity for the community to be part of the discussion.

I fully understand the criticism so far. That said, I also can see the point that costs need to be covered, especially if big brands do huge drops or companies use POAP infrastructure commercially. Imho that would really be the main criteria for the pay wall: Are the POAPs issued to use them commercially, drive engagement etc or is it primarily about commemoration.

I think that while some brands, companies and creators are able to use POAPs already for Marketing, Communications, Community Engagement - many companies are not there yet. To a certain degree I see a risk that those are scared off issuing drops or looking for other solutions or free NFT / open editions drops.

Another criteria or way of implementing the paywall could be sort of a commercial business lane for big drops, professional service, fast approval, full support by poap.xyz, premium features (?) etc and a private lane for free drops without those services.

Something missing in the commercial use policy are drops that are neither small private drops nor for commercial usage but help to onboard people to POAPs and web3. “for the culture” if you will. One idea that falls into that category from my point of view would be public POAP Hunts.