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PennySeed - Decentralized Income

PennySeed is a crowdfunding platform where the funding goal is divided by the number of pledgers. For instance, if you ask for $1,000 and reach 500 pledgers, then each pays $2, and if 1,000 people pledge, then each pays only $1.

Campaigns require a deadline and a minimum number of pledgers - that way people know the maximum possible pledge amount (campaign_goal / minimum_number_of_pledgers).

Payments are done via Stripe, and pledge amounts include the Stripe processing fees (2.9% + $0.30) so the campaigner gets exactly how much they ask for.

📚 Table of Contents

💰 Monetization Today
😔 Problems
💡 Insight
🤩 Solution
🔧 Implementation
📱 User Experience
👩‍💻 Developer Experience
👍 Benefits
🤔 Use Cases
📈 Revenue Model
🌎 Building a Community

💰 Monetization Today

1. Pay-per-Media
   ✔️ Money comes from Users
   ❌ Hard to Share and reach more people
   ❌ Price is arbitrary due to no overhead
   ❌ Worry about Piracy and Torrenting

2. Subscription
   ✔️ Users pay a regular fixed amount
   ✔️ Users can access all content
   ❌ Users still pay even if no new content is created
   ❌ Users have to subscribe for a period just to watch a single piece of content, cancelling after

3. Streaming
   ✔️ Users pay a regular fixed amount
   ✔️ User payment is distributed amongst creators based on streamed content
   ❌ Pay-per-Stream model can be exploited
   ❌ Rewards replayability over quality
   ❌ Incentivizes Creators to exploit fans to stream their content multiple times for cheap prizes
   ❌ Users have to subscribe to an entire Network even when they just wanna watch 1 or 2 creators' content

4. Advertising
   ✔️ Content can be free
   ✔️ Can Share and reach more people
   ❌ Incentivizes Creators to generate clickbait content
   ❌ Money comes from sponsors, not viewers
   ❌ Creators are beholden to sponsors, compromising content

5. Donations
   ✔️ Money comes from Users
   ✔️ Content can be Free
   ✔️ Quality over Quantity, since more content doesn't mean more donations
   ❌ Users aren't sure how much to pay (nor how much the Creator needs/has)
   ❌ Unstable income due to irregular donations
   ❌ Users can be emotionally manipulated into donating

6. Crowdfunding
   ✔️ Money comes from Users
   ✔️ There's a clear goal for users to reach
   ✔️ Content can be Free
   ❌ Once passed the goal, anything extra could've gone to other Creators they supported
   ❌ Winner-takes-all approach where few popular Creators get the bulk of the potential pledges
   ❌ Irregular pledge amounts lead to pandering to large pledgers who contribute most of the funding

7. Merchandise
   ✔️ Money comes from Users
   ✔️ Free advertising from wearers
   ❌ Users who want to support the Creator may not want that particular product
   ❌ Creators are incentivized to sell cheap products for high prices for greater profits
   ❌ Manufacturing & Shipping Fees

😔 Problems

❌ Arbitrary Pricing with no guarantee of a stable income
❌ Little incentive for supporters to encourage others to contribute
❌ Creator has to do extra work for money (merchanidise, commissions, side jobs, etc)

💡 Insight

• The Creator wants everyone to enjoy it
• Most of the money goes to living expenses
• Fans aren't paying for Content - they're paying for Future Content

🤩 Solution

✔️ A "Split-the-Bill" Model that divides the Target Amount by the number of Pledgers
✔️ A Minimal Design that doesn't try to be a Social Network

🔧 Implementation

⚙️ Stripe for conventional payment methods, with the processing fees (2.9% + $0.30 per pledge) pushed on the pledger's end to incentivize sharing the campaign to reduce their pledge amount.

📱 User Experience

1. A Creator creates a Campaign, specifying the following:
   • Campaign Description
   • Target Amount
   • Minimum number of Pledgers or Maximum Amount per Pledge
   • Deadline
2. A page is created, including the Campaign Details, the current number of Pledgers so far, and a "Pledge" button
3. The Creator shares the link with all of their followers
4. Pledgers submit their payment information (via Stripe, but aren't charged until the deadline is reached

By the deadline, if the Minimum number of Pledgers is met:

5. Each pledger is charged (Target Amount)/(Number of Pledgers)
6. The Target Amount is sent to the Creator

Otherwise, if the Minimum Number of Pledgers isn't met:

5. Nothing happens; life goes on

👍 Benefits

✔️ Creators are guarenteed the Exact Amount they specify
✔️ Pledgers are incentivized to share the Campaign to reduce their Pledge Share
✔️ Minimal Design allows for a wide range of emergent applications and extensions

🤔 Use Cases

👩‍🎨 Artists

• Artists can use the base model to maintain a stable income
• Content can be made free to the public, making it easier to gain more and more followers
• Pledgers can access "bonus content" using their pledger id
• Earlier pledgers can receive a "dividend" as later campaigns pay a percentage back, crowdsourcing "Content Curators" as people look for new artists to support early
• Different "Pledge Types" can be defined, allowing some pledgers to license the Artist's content. If the Pledger is also a PennySeed user, they can forward a percentage of their Campaigns to the Original Artist's Campaign

🎫 Events

• A Campaign can be made to cover all costs of the Event (venue, catering, staff)
• People can attend by Pledging, using their pledger id as a ticket
• The more "tickets" are sold, the lower the ticket price, incentivizing pledgers to get others to attend
• Different types of "tickets" can be defined, from selling individual days for multi-day events
• A "Maximum Pledgers" can be specified to ensure not "too many" people attend
• A "Minimum Pledger Age" can be specified if alcohol is involved

👩‍💻 API Developers

• Like Artists, API developers can use the base model for a standard income
• Pledgers can use their pledge id as an API Access Key to use the API
• The Pledge Amount can be based on API usage

📠 IoT Devices

• A Campaign can be made to cover the cost of the device (e.g. a Coffee Machine shared by a Coworking Space
• People use the IoT device by pledging, using the pledger id to access the device
• The Pledge Amount can be based on usage (pledge multiple times for multiple uses) or a single pledge for "full access"
• The Campaign can be set to be the day before its return policy, allowing the Campaigner to return the IoT device when the Campaign isn't met

🏢 Coworking Spaces

• A Recurring Campaign can be made to cover the total cost of running the Space (Rent, Utilities, Staff, Insurance, Maintenance)
• Pledgers can use their pledge id to access the CoWorking Space, encouraging more people to join to lower costs
• Pledge costs can vary based on attendance or usage of provided IoT equipment
• Events can be hosted in the Space, whose venue costs are coupled to the rent costs
• Startups and Unemployeed attendees can pledge indirectly with future earnings

👩‍💼 Startup Funding

• Pledges can act as "shares"
• A Recurring Campaign can forward a percent of Compaigns to past Campaign Pledgers, acing as a dividend
• Product Startups can treat Pledges as Preorders, setting a Maximum number of Pledges for a fixed set of products

📈 Revenue Model

• PennySeed will have a recurring Campaign with a dividend extension for "investors"
• All Campaigns pay a percent to a PennySeed fund
• Revenue will come primarily from the former for initial funding, but as more campaigns are created revenue will come from the latter (a percentage of which will go back to the "investors")

🌎 Building a Community

• Sponsoring Events by using PennySeed to fund the Events, including PennySeed Extension Hackathons
• Provide a way for existing pledges from external sources to act as retroactive pledges
• Provide a conventional payment method via Stripe, adding the Stripe processing fee (2.9% + $0.30 per pledge) on the pledger's end as an incentive to use a crypto wallet like MetaMask