Contribution Tokens
Fabric
1 min read·
When users contribute to a campaign on Fabric, they receive contribution tokens, proportional to the amount they contributed. These tokens are used to determine a pro rata claim on any future yield.
Beyond the core use of determining yield distribution, contribution tokens are ERC-20 compliant, which enables all sorts of composable experiences, for example:
Token gates
Allowlists
Splits
Allowances
Transfers
Trading
Liquidity
Derivatives
And more
Because contribution tokens conform to the ERC-20 standard, they are interoperable with existing systems, as well as systems not yet built (or imagined). This maximizes optionality for both contributors, and campaign creators.
The relationship between contribution tokens, and the token in which the campaign is denominated (eg. ETH, USDC, etc.) is one-to-one.
For example, let’s say Alice creates a campaign for 10 ETH (refresher: 1 ETH = 10^18, or 1,000,000,000,000,000,000 Wei). When Bob contributes 1 ETH, 10^18 contribution tokens are simultaneously minted by him, and the total supply of the contribution token increases by 10^18.
If Alice’s campaign is unsuccessful and Bob withdraws his 1 ETH, then his contribution tokens are burned, and the total supply shrinks by 10^18. In aggregate, the token supply for Alice’s failed campaign might look something like this over time:
However, if Alice’s campaign is successful, the supply of contribution tokens and the total contribution amount will diverge. This happens the moment she transfers campaign funds from the campaign contract to the recipient address:
When Alice transfers funds to the recipient, campaign tokens are not burned.
Why?
Because if they were, it would be impossible to track who gets what if/when future yield is deposited. For example, if Bob’s initial 1 ETH campaign contribution represented 10% of the total funds raised, then at the conclusion of the campaign, Bob has 10% of the contribution tokens and so can withdraw 10% of any future deposits into the campaign contract.
If Bob chooses to sell these tokens to Charlie, then Charlie would be entitled to these withdrawals. And so on.
Campaign tokens are a functional requirement for sharing upside. By complying with the ERC-20 specification they become composable crypto-economic primitives. We’re excited to see what you create, together.
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To see how yield is deposited in the Fabric crowdfinancing client go here: https://docs.withfabric.xyz/crowdfi_client/create#6-deposit-yield To see how yield is withdrawn in the Fabric crowdfinancing client go here: https://docs.withfabric.xyz/crowdfi_client/contribute#6-withdraw-yield
Contributing to a crowdfund and the "+10,000,000" had me a bit confused / spooked. Unsure what I'm getting in return for contributing
https://blog.withfabric.xyz/contribution-tokens
Ah, TIL - thanks for sharing
Maybe an unnamed token I guess. What’s your guess?
A simple app that I could use right now: 1/ people fund a contract with USDC 2/ USDC is put into aave to earn yield 3/ aave yield is passed back directly to each contributor pro rata (not to the pool) 4/ USDC in the pool is used to fund stuff over time I wish there was a simple way to cook this up
was thinking about this yesterday in the context of Fam revenue from memberships (USDC) fund a shared treasury funds are deposited into a lending/borrowing protocol like Aave members earn $$ based on how long they've been in the community community can use the pool to fund IRL events, merch drops etc.
there is: https://crowdfi.withfabric.xyz each crowdfunding contribution simultaneously mints an equivalent amount of erc20 tokens, which are used for pro rata withdraws more here: https://blog.withfabric.xyz/contribution-tokens
example: https://crowdfi.withfabric.xyz/receipt/fabric-on-base-1fctinte15urk/084f5931-e1f6-458a-9b76-396954ba9131?txn=0x76e8b9e932de0b76955d130290b640700b7c6d9559284d3d21c230bbb6a53cce
This is a few steps out but we’re headed towards an easy button version of this as power ups for your accounts
Gnosis Safe should be able to do this.
how?
The multisig would be the first point of the approach; allows people to be part of the wallet. Then you have Gnosis modules that can be programmed to do just as you described; put money to AAVE, distribute on schedule pro rata. https://docs.safe.global/safe-smart-account/modules
retroactive grants are cool but they require builders take on all the risk (build it and you *might* get *some* funding) an alternative ✨proactive✨ approach:
Is everyone on this am a super intelligent big brained chad. I feel like a kid at a candy store😂😂 I feel my curiosity coming alive here. This is absolutely brilliant!
Everyone is dwarfed by @nonlinear.eth when it comes to being a chad, don't worry
I didn’t notice, being that I’m dwarfed by literally everyone 😂😂🤣
Would.
why is retro funding prevalent?
because most people aren’t aware of better alternatives yet
proactive seems great when you know exactly what you want and understand the market
proactive requires work on "filling credibility gap" for builder and evaluation-via-weak-signals for supporter. most people want the easier/safer option. hence: retroactive is donation/purchase proactive is investment
mostly agree—do you think demonstrated history of shipping is a weak signal? eg https://github.com/gskril its definitely not a guarantee of future success, but not sure i'd call it 'weak'. granted, a prototype on staging would be even better
Does it flip the incentives? With retroactive goal is to build actual product with usage - that’s the only way you get rewarded With proactive you get paid regardless the usage - you can be better off getting new grants for new projects vs building
for bad actors with no reputation, yes. for credible builders with real reputational risk, no
Interesting what about streamed retroactive grants? It seems like one of the things is upfront costs that are difficult, but with streamed retro grants based on agreed upon milestones being hit can perhaps unlock some of those burdens?
💯 streaming grants retroactively based on previously agreed upon and executed milestones is a huge improvement. agreed it doesn't really address upfront costs. an interesting experiment: crowdfund upfront costs then share a portion of future streams with contributors
and have more metrics provable/verifiable onchain through attestations being automatically sent from credible sources Essentially need more components of the flow to become onchain/provable so the stream can’t be gamed.
I'm trying to make it happen a creator house (the equivalent of a hacker house but for artists) during Bright Moments collection in Buenos Aires but I think my project doesn't fit in this idea. 🥲
I love this model and can’t wait to do a round with you guys
So, shares in a company?
kind of? key differences are: 1) funding (risk) happens before not after 2) flow of funds entirely onchain (verifiable, predictable) 3) uncapped upside (contributors receive pro rata exposure to project success) "shares in a company" is a legacy/web2 way of framing it: not incorrect, but not really correct either
Shares in a company are literally 400 year old ideas, so safe to say not web2 😉. Venture/angel investing has a similar profile of funding/risk. Stocks have potentially uncapped upside, see the chart of Berkshire Hathaway class A shares. I still don't see the difference in the fundamentals but am open to being wrong.
Mad respect. I rarely see this problem discussed at all, let alone addressed proactively. Thanks for the nerdsnipe. Now I'm gonna be thinking about this model all weekend. 💜
nonlinear i luv u sm
🥰
curious what other DAOers are thinking or feeling given the recent shut down of DAOs that are "default dead" (eg DAO Masters, Meta Gamma Delta). thought provoking thread: twitter.com/JuliaLipton/status/1683535162808717312 cc @ccarella.eth @noun40 @nounishprof @nonlinear.eth @bli.eth @grin
¯\_(ツ)_/¯
@moar things I agree with re: DAOs
that all tracks except #5, unclear that "better alternatives have since emerged"
docs.withfabric.xyz (tho i'm biased, obv 😂)
If a small group of people can “shut down a DAO” was it ever really a DAO?
(there’s nothing wrong with a community pooling money together to do cool things but that alone doesn’t make it decentralized or autonomous)
👆
IMHO a major problem in many DAOs’ give/get has to do with - lack of autonomy to do great work (repels top performers) - lack of efficiency fails to achieve large outcomes, so the pie is small, and any % of a small pie is a small get
Agree with the lack of autonomy to do great work. Seems like a lot of this comes from other “trust less” parts of the crypto ecosystem. And in some DAOs the original membership wasn’t values aligned at all (aside from degen principles to see numbah go up). And very active DAOs are noisy as hell != efficiency
Whether you call it a dao or an org, market logic and human psychology still applies. No specific thoughts on DAO masters. Cool that she’s self awake and that she wrote up a postmortem
Wow this was pretty solid. I kind of agree that probably about 75% of the first wave of DAOs are dead or dying. A lot of people joined for novelty, financialization acted as a disincentive during bear markets, and most DAOs haven’t figured out community.
That said, I think there is a subset of existing DAOs that are very strong with a laser focus. Another set of DAOs will figure out how to refocus their energy and engage new/existing community if they haven’t over diluted tokens. But I do think improved DAO models will emerge with better tooling and incentives!
I also think the communities the most likely to leverage DAOs for the common good are so far disconnected from this space/world either because web3 isn’t accessible, they believe it’s all a scam, or they’re afraid to look into it because they’ll be “web3 negged”. The DAO revival however will be interesting
@survey thoughts on state of DAOs
🗳️ This cast has been tagged as a potential weekly survey! If viable, it will be voted on this Sunday, then launched on Monday. Follow me to see the results. Want to help decide? Come vote with us: https://t.me/+QdtIIDi8uzZlNTcx
My two cents is more DAOs need concrete goals and measurement of progress against said goals.
Yes and the more of these metrics that can be done on chain, the more likely we’ll have actual decentralized autonomous organizations.
I was thinking about this a bit yesterday. Would be cool to see what a community have agreed are the biggest goals and everyone can view their progress towards them. Helps to increase the transparency and shine a light on what's actually happening in these somewhat opaque internet clubs
Did you see OBRA from @pet3rpan? https://forum.safe.global/t/discussion-safe-dao-resource-allocation-model-obra/1001
I'd add a very narrow set of goals
what were the “Key Performance Vibes” (onchain metrics)? did current leadership decide to just throw in the towel? was this decided by vote? was there an opportunity for others to step up and take the helm? DAOs should scale leadership
Prudent to look beyond the hard dichotomy of centralization versus decentralization, choose an org design for the goals at hand, and evolve with scale. Open Collective and Gitcoin are treading well. (Image from: https://gov.gitcoin.co/t/gitcoindao-starting-conditions-are-different-than-other-daos/10603)
Explicitly stating that its over is a net benefit to the community and core members. This allows people to narrow their focus on DAOs that are viable, instead context-switching between DAOs that never had a chance. Strange that we expected DAOs to never die. How can things evolve without a fitness function?
I think we're ready for a new wave of experimentation around ICO technology. Take all of the learnings from Ethereum, the 2017 boom, the 2021 NFT wave and build actual securities that are trustless, global and unstoppable.
as long as there's liquid consent (e.g. ragequit), the raised funds are stored in a capture-resistant manner (e.g. subDAO-controlled multisigs vs private groupchat), and permissionless contribution is repeatedly accounted for (e.g. hypercerts over many epochs).
like this? https://blog.withfabric.xyz/contribution-tokens
ICOs but in a different jurisdiction than the US? Only way I see it possible.
Internet Companies Onchain
not until the SEC cloud goes away
what's the tldr on current state of SEC cloud affairs?
see Coinbase and Binance news
Been building just that https://mirror.xyz/ventureclub.eth/Vcm47BeT96oQSMjLXQqiZKXNY_dxOjQ9z_txSK_O0po
I don't know about going in the direction of on-chain securities, per se. But I couldn't agree more that the ICO experiments need to and almost certainly will be revisited. People forget how much potential good actually came out of 2017.
when you contribute to a campaign on @fabric you simultaneously mint an equivalent amount of campaign tokens. these are used to track who gets what if/when future yield is distributed. they are erc-20 compliant and so support all sorts of new & not-yet-imagined use cases https://blog.withfabric.xyz/contribution-tokens