Proposed token design
Our aim when designing the OtoCo token was to do something different, not for the sake of it but with the aim to improve on various token models we studied, some dating back to the ICO days and some from more recent DeFi projects.
Our design had three objectives:
- We wanted the token to have utility without forcing users to buy a native token in order to access services on otoco.io.
- At the same time, we wanted to have a transmission mechanism for rewards, not only for loyal users but also for outside developers who build and sell add-ons in our soon-to-launch dAppstore.
- Finally, we wanted to give token holders generally the broadest possible participation rights in the OtoCo project.
We believe or design as it stands comes close to reconciling these three objectives, in the following ways:
1. A tokenized points-system
First, we add a new token economics layer to the models we studied by introducing an ”airmiles”-type loyalty scheme for users.
Such scheme would reward users in OtoCo tokens based on how much they spend in otoco.io.
This will let users convert their points to top up or pay for their purchases, without expecting them to purchase a native token to access our services, which are all priced in USD.
Such airmiles-type token layer may create very interesting price dynamics:
- First, by linking token rewards to how much users spend in otoco.io, a direct link exists between the value of the OtoCo token and the success of otoco.io as a business.
- Second, as with pure DeFi tokens, tokens holders can stake OtoCo tokens in liquidity pools on decentralized exchanges and earn more OtoCo tokens as reward for creating a secondary market for users’ “airmiles”.
- This secondary market price would in turn feed back into the ratio at which OtoCo tokens can be used to spend on real, USD-priced goods and services in otoco.io.
2. “Proof of sale” rewards
As second key departure from the token models we studied is in how we plan to use the OtoCo token to reward outside developers in function of how well their products sell in the online, competitive marketplace otoco.io is building.
In addition to the USD-based revenue sellers generate as a result of selling their goods via the store, extra rewards in OtoCo tokens would kick in based on volume sold, the number of installs, etc.
Such sales-based token rewards would add an extra dynamic to the OtoCo token price and link its value directly to user demand for add-on components.
At the same time, otoco.io would share in the revenue generated by third-party developers, which in turn may feed into the value of otoco.io and its token.
3. Participation rights
A final dimension to the OtoCo token is its holders’ guaranteed participation rights.
Such governments rights have been embedded in many DeFi tokens, however our proposed token design seeks to improve on token holders’ “voice” by making each and every token holder a beneficiary of OtoCo’s newly formed Foundation (see Part IV on Governance below).
Beneficiaries of a Foundation qualify as grantees, which makes it possible to grant further tokens to long-term token holders linked to the project’s overall wellbeing, similar - albeit at the same time very different! - to how companies pay dividends.
As a result, the revenue of OtoCo has the potential to become circular, with the success of OtoCo as a business feeding into the value of the token, in turn increasing the dollar value of the Foundation’s token reserve which subject to a token holders’ vote can be dividended back to its token holders.
A gift to the community
otoco.io as a tool was always meant to be a gift to the community.
If via its token, it can become a project of its users, by its users and for its users, we hope it also provides a template for other decentralized ventures in the future.
Participate in the discussion on our token design via our official Telegram channel.
