REALITY CHECK: POAP Economics

Community
40

I agree that it is definitely not sustainable for POAP to keep the use of the protocol free. In this regard, I believe moving to a paid model is of great importance. At the same time, POAP has been one of those amazing & interactive applications used to onboard non-web3 native users into the space in a fun & (wouldn’t say) frictionless way, but very low friction.

That being said, in order to maintain the momentum of growth, suggest that issuers start paying for the POAP creation & distribution, while the acquisition and minting by collectors to remain free. This way, the protocol starts to funnel in some revenue while maintaining growth and empowering collectors to be issuers themselves.

Another thought would be to offer tiers of issuance, so depending on the size of the drop, a pre-determined fee will be set, with a rebate system in place to incentivize thoughtful & responsible usage of the protocol.

I think POAP would pay for a drop in the case of charity events for instance or in cases where issuers are not able to afford it, then there would be a proposal sent (referring to how maybe Decentraland DAO grant proposals are handled)

2 Likes
41

I am not against charging the Poap.

1 Like
42

Hi POAP team,

Here are my thoughts on your questions:

  1. Yes, at some point in the future, they should. This will increase the quality of applications and reduce the screening effort. We could also think about having two types of POAPs, one which you can issue for free and one that costs and has some additional utility.

  2. Generally, I am against collectors having to pay as they already pay by traveling to an event and/or spending their time and focus. I believe issuers should, as stated above. The only positive thing I would see is that this could maybe reduce the number of fake claims by people who have not actually attended the event.

  3. PAOP Inc should continue to pay for drops atm to get POAP even bigger and not stop its adoption, but at a certain point in the future (4-9 months), they should move the costs over to the users, mainly the issuers.

  4. Generally, the POAP community should consider creating a token to pay for the transaction costs sometime in the future :wink:

1 Like
43

Should Issuers pay for drops? Why or why not.
YES. I think it would be better to answer this question from the definition of POAP. POAP is more used as a proof of attendance (whether online or offline). Of course, it is sometimes used by some people or projects to reward people who have made outstanding contributions to a project. So from this point of view, I think it is more reasonable for the issuer to pay for this part of the fee.

Should Collectors pay for drops? Why or why not.
Both are suitable. If the issuer of POAP is compared to the organizer of an event, then setting a reasonable price for POAP can also be regarded as an event admission fee. Some activities are free and some are paid, I think whether it is charged or not is optional for POAP Claimer, so this question is appropriate for both

Should POAP Inc continue to pay for drops? Why or why not.
No.POAP has developed to a certain scale. From my personal point of view, I prefer the issuer to pay for this part of the cost, rather than the POAP company to advance the cost, which is more conducive to the long-term development of POAP

1 Like
44

A lot of people who are not aware of POAP will probably not go through the extra steps of sending coin to a wallet in order to pay for a POAP at an event. This will probably slow the growth of POAPs and make it harder for widespread adoption. I am really against making collectors pay for the drops because it will make POAPs harder for people who don’t know what it is to get into them.

As someone who makes events I would be more than willing to pay to use the service. I think POAP should have issuers of drops pay to make them based on the amount of links that they need. Bigger events can typically spend more money and smaller drops wont mind spending a little bit to get like 20 links for an event that is important. This will also have the added effect of people requesting the correct number of links for an event because they are the ones having to pay for them.

There can also be other ways to monetize the drop creation process to let people who what more customization from their event to pay for features that are costing POAP more money. For example, if someone wanted to make a higher quality apng have them pay a small fee in order to use a larger file size. POAP could also allow more customization on the template page for businesses who what more of their branding showing when people mint links.

POAP should continue to pay for drops in the short term but should start charging issuers so those funds can be used elsewhere and make the platform better.

3 Likes
45

POAPs obviously cannot be free forever, but they should be as free as possible for as long as possible in order to encourage early adoption and create network effects.

Many thanks to Patricio for subsidizing POAPs up until this point. My answer to your questions depends on how much it costs to issue or collect a POAP. (How much does it cost?)

In general, of the three entities, POAP should continue to subsidize or pay for POAPs to the greatest extent possible to encourage early adoption. Accordingly, is it possible for POAP to raise funds or issue a token in order create an economy to subsidize early usage?

For similar network effect reasons, I believe that issuers should pay a larger share than collectors. However, what if the issuer can set the percentage that issuers pay since they will understand better the prestige or importance and therefore demand of a particular POAP to collectors? Furthermore, how can we create an incentive mechanism that would provide additional benefits such as the ability to issue larger quantities of POAPs for each POAP type for the issuer if they shift the majority of the cost to collectors or issuers and away from POAP Inc?

2 Likes
46

I have a deep love for free distribution and its power to onboard and educate people. This positive, memorable experience acts as a great first impression to the crypto space. POAP provides that experience. It was a significant factor to why I fell so deeply in love with POAP, and why I continue to champion it to this day. In the preservation of on-chain memories, few are more significant than a person’s first steps into the space. Their first wallet, the first thing in their wallet, their first actions. Claiming a POAP as a first action builds a strong foundation for that person as they continue their journey. This is a much different road compared to joining through other traditional ways. It teaches people about how big this new world can be. It’s more than just numbers. This is an on-chain memory (a POAP) that warms my heart to distribute.

Who Pays?
Not the Collectors - or at least not all

A core component of what makes POAP so accessible as an onboarding and educational tool is that you do not need to connect a wallet to claim. This has immense benefits to the POAP community, both for accessibility, and security reasons. Benefits that are lost if you are required to connect and transact.

If the user if required to perform a transaction in order to pay for their mint, then POAP does not get to be their first transaction. Their first transaction is the one used to get the funds to pay for the mint. Just numbers. A completely different experience, and a completely different first impression. This potential to lock in that on-chain memory is taken away.

Collectors being required to connect a wallet to claim would also remove POAP’s ability to be claimed by an email address. This is another excellent onboarding tool to bring people in with a way they can understand, then they can learn more on their own terms when they have time.

So Who Pays?
I’m unsure of what the operating costs are to cover the minting of these POAPs. There are however two key groups that are not mentioned in this discussion. The cost does not necessarily need to fall on POAP Inc, or the Issuers. There are many others that benefit from the POAP protocol.

Sponsors
For hundreds of thousands of people, POAP will be the their first exposure to Gnosis chain. Every app on the network benefits from this exposure. For Gnosis, and all of its parties, it’s in their best interest to support POAP as it continues to grow.
Donors
The POAP protocol is a public good leveraged by many. Those that do have a direct incentive to help it continue to flourish. This could be done in various ways, such as communal donations, gitcoin grants, or a raise of come kind (see Pooly NFTs by PoolTogether for example).

These two groups coupled with the support of the issuers and POAP inc could produce a sustainable system without the need for the collectors to pay for drops, which would compromise the values mentioned above. POAP can remain the perfect onboarding tool to web3, but there must be ways it remains free for collectors in order to do so.

5 Likes
47

Minting PoAP tokens on the Gnosis network costs approximately…nothing. Applicants could pay for these ridiculous commissions themselves. The PoaP team seems to have another question in mind: who should or would like to pay for the centralization of their system, exactly hosting images on their servers. To do this, you need to find out from users whether they need this centralization, thanks to which tokens are carelessly destroyed at addresses, and those that are suspected of farming and stolen and those that were honestly bought on the secondary market for the sake of participating in the competition (any privileges). Investigations are not conducted properly, some kind of incompetence. Almost a month has passed since the team was contacted about the massive theft from epor.io they provided a report, but there was no response…Then why do we need this centralization if it works so strangely (selectively)?
If it was meant to pay for the infrastructure, then, as mentioned above, you can use the donation system + issuer fees (too many “junk” PoAPs were released)

48

Can’t poap farmers pay again with different wallets and get poap?
Certainly, farmers can spread the money in different wallets and receive several poaps every week just by paying 1 dollar, and this distribution is unfair.
In my opinion, the solution can be two options.
1-wallet must have transaction history on eth network to receive poap
2- Or the following options should be considered together
1- Transaction history in Ethereum and dapps to show that they are real users 2- 15 minutes participation in meetings
3- Authentication

49

Without knowing how much cost POAP to maintain:

Should Issuers pay for drops? Issuers shouldn’t pay meanwhile they follow the POAP guidelines

Should Collectors pay for drops? yes BUT, 5 first mints are free, after that the wallet should have a paid NFT (membership) that grants the access to free mint without signing, so we can have the same smooth experience without the most of POAP farmers because once the farmer wallet have 5 POAPs (minted free) they will need to hold the membership.
The NFT price? idk of course, but should be affordable for all, if it’s so expensive maybe creating the issuer NFT for projects after X events would be fine.

Should POAP Inc continue to pay for drops? Maybe, as I said before the same model can apply in different ways, the most important keys would be:

**Try for free **
Affordable for Issuers + collectors + POAP Inc
Avoid farmers
The NFT membership lasts a calendar year (maybe halving the price at midyear or different tiers)

50

quote=“Anthony, post:1, topic:7677”

  • Should Issuers pay for drops? Why or why not.
    Yes. To make it sustainable. I however do not know the economics behind the POAP infrastructure. Having said that: Registration needed for issuers, Free for less than X POAPs to be minted, Subscription model for issuers than want to mint more than X POAPs per month, independently of the number of drops. And: Convert POAPs in a sort of Web3 Eventbrite where people search for events, take a small cut of tickets sold via POAP events. I want to stress that I do not know the financials behind the current development and operations of POAP.xyz.
  • Should Collectors pay for drops? Why or why not.
    No. Collectors should not have any barriers. Only, if you declare “that particular POAP is a ticket to enter an event”, then yes. See above; Eventbrite model.
  • Should POAP Inc continue to pay for drops? Why or why not.
    No, because it is not sustainable.
  • Additional comments or insights you have.
    Thank you for creating POAPs. Fantastic idea, great implementation. You just reached the fourth and final level of development. Technically feasible, Market readiness, and Scalable. You only need to be profitable.
51

1. Should Issuers pay for drops? Why or why not.
Probably most times. Issuers are the ones creating POAP drop that they want others to claim. Typically, POAPs are “proof” that a collector did something.

2. Should Collectors pay for drops? Why or why not.
Sometimes. POAPs are NFTs, so there are circumstances where it’s really up to the Collector to pay the fee to claim. But POAPs also shouldn’t be a Pay-to-Claim mechanism

3. Should POAP Inc continue to pay for drops? Why or why not.
Question: what are the operational costs for POAP as an organization? What does a POAP drop cost? What does a single POAP cost? What does a mint cost?

There are a lot of factors to consider, but how does POAP Inc plan to continue business right now and generate revenue?

4. Additional comments or insights you have.
The UX and UI for Issuers need to be improved significantly. Same with the approval and petition queue and status.

1 Like
52

Yes, I also think that issuers should pay. Ordinary users try not to let them pay, otherwise many current users will quit and turn to projects such as galaxy, and the loss of users will be very serious.

It is unrealistic to expect user donations. First of all, it is not a stable income,secondly, it is too little to help. Relying on the economic model, the cost should not be too high at the beginning and proceed slowly.

53

The topic can be discussed under two main phases: 1) Before the widespread adoption 2) After the widespread adoption.
Definitely, each of these phases can have different business revenue models.

1) Before the widespread adoption
In my opinion, at this stage, the main goal should be to expand the utility of POAPs, to attract more customers and to maximize the market share as mentioned by several community members as well. The more the customers, the more sustainable the POAP project will be.

Should Collectors pay for drops? Why or why not.
So far POAP has been successful in onboarding new users to the cryptocurrency space. personally, I know people who made their first wallet after receiving a POAP link. This easy but major step has made them later adopt the cryptocurrency.
Generally, I don’t think making collectors pay for POAPs will have a positive effect on the POAP project growth. For example, consider a case where POAPs are issued as incentives to attract the potential customers to introductory sessions about sample products/projects. In this case, it is NOT expected the audience will be willing to pay for something they are not familiar with. It is as if to ask for payments from the people for taking their time to publicize projects. Furthermore, can we convince somebody who is not familiar with cryptocurrency to pay for an image in their wallet? In addition, at this stage, there are projects offering similar services free of charge. Asking for payments from the collectors will definitely have a negative effect in the long run on the project. Despite this fact, there might be cases where the collectors are willing to pay to receive POAPs. For those cases, a different policy can be devised provided that it does not compromise the main goal of the POAP which should be to maximize the market share under any condition.

Should Issuers pay for drops? Why or why not:
It makes sense to receive payments from the issuers, however, it may be again an obstacle to the growth of the POAP project. The issuers may prefer to use other products offering similar services free of charge, at this stage.

Should POAP Inc continue to pay for drops? Why or why not:
Let us look at the project like other crypto projects. At early stages, crypto projects mainly rely on fund raising, community enthusiasm and tokenomics. Is POAP willing to move towards decentralization of the project and issuing its own governance token? If yes, then it can rely on the token economy to cover the expenses in the first years.

2) After the widespread adoption
Let us imagine the POAP project has taken a major part of the market share and there are many users having POAPs as digital tradable assets *. Can the project receive a percent of the price of any POAPs tradings? I believe that it makes sense to think so. If yes, it can be a considerable amount after the widespread adoption of the POAP.

*) Previously, under another topic, I mentioned that POAPs can be considered as digital assets and they can be tradable if they are not considered merely as a proof of attendance.

2 Likes
54

I think that’s not good idea.

It’s much better if Poap Inc get money from the issuers, but how?
If they want all the issuers to pay, definitely they will lose their issuers.

I think It should be semi-paid, I mean if they want for example 0-500 poap, it’s free…
But if they are going to issue 500-1500 poap, it’s cost is $n
It they are going to issue +1500 poap, it’s cost is $N
They are serving the issuers, so they should get money from the issuers, not collectors.

1 Like
55

Lots of great responses here, and it sounds like a lot of people have agreed that the answer is “it depends.” At the same time I think it’s good to point out that charging Collectors for POAPs is going to be a hurdle, especially considering the last few weeks of using Guild for the POAP Community Call claim (I swapped ETH for MATIC, then realized that wasn’t the same as buying MATIC on Polygon, and I’ve been in crypto a few years now).

I like the idea of a Freemium model here to a point. Creating a POAP drop for 50 or less people? It’s free for both the Issuer and the Collectors. Doing a larger drop or several drops? Issuers can pay or charge Collectors. Maybe there’s a monthly plan for Issuers that create multiple POAP drops each month?

I don’t have all the answers, but I’d like to see Collectors continue to have access to free POAP claims as the barrier to entry is still pretty high, even with the simplicity of claiming these tokens.

1 Like
56

I agree with some of the others who previously commented, some form of Hybrid model would likely be best. Maybe POAPs cost over a certain amount or different features unlock. Perhaps something similar to an “unbound” NFT, or even provide smaller quantity drops free as soulbound POAPs while movable, tradable, migratable, & large quantity drops cost a “premium” fee. Others options could be offered as well in the paid version. This provides working capital while continuing to onboard new users at negligible cost (the original reason for free mint, if I’m not mistaken)

1 Like
57

  1. Should Issuers pay for drops? Why or why not.
    Case by case.
    If the event for commercial/big amount numbers -pay but negotiable
    If normal use-free but limited drop

  2. Should Collectors pay for drops? Why or why not.
    Prefer not, if there were a pay it is not easy to increase the loyal users. Users are always core to any brand.

  3. Should POAP Inc continue to pay for drops? Why or why not.
    In the future,if the whole cycle running smooth and better than today then there is an answer.
    So temporary yes.

  4. Additional comments or insights you have
    There should be balance between product and consumers.So what can we provide to consumer if they pay for products? This is one of thing we should consider.

Much love poap!

1 Like
58

POAP brings lots of value, if not the best value prop in web3 given the 900K wallets + emails participating is a proof of that.

Anything that helps to build the pipes strongly should be seriously considerered

1 Like
59

Should Issuers pay for drops? Why or why not.
Yes, example 1k poap per month, x dolars. what is the cost to mint 1 poap?

Should Collectors pay for drops? Why or why not.
No, because it will generate a limit on adoption, and friction when using poap.

Should POAP Inc continue to pay for drops? Why or why not.
No, because the things have a cost, but this cost, would be pay for the Issuers

1 Like