Cent Network Master Class
Understanding the Incentive Mechanics of Cent
|Steven McKie||May 13, 2019|
Note: This post was originally published May 13, 2019 on the Amentum blog: https://medium.com/amentum/cent-network-master-class-a9d473cb54a2
If you haven’t heard of the Cent Network, now’s the time to really look in-depth to understand one of the most intriguing and advanced platforms for mainstream adoption for Ethereum, to date.
Built atop Web3, Cent is a social network that abstracts away many of the headaches of Web3 by utilizing state channels to remove the need to pay gas, fees, and provide instant settlement for fund reuse on the platform. Ultimately the Cent team has created a Web2/Web3 hybrid that is easy to sign-up for and get started using quickly, even without ETH.
The incentive primitives that are native to the platform are: Sorting, Tipping, Bounties, and Seeding — each works to create a feedback loop of value exchange to keep users passively earning a income, while incentivizing them to create and support others concurrently while providing an income for themselves.
To help speed up the education process as Cent moves to exit beta (since it formally launched in August of 2017), here’s some insights into how the mechanisms on the network interact as you use the platform proficiently to grow your brand and influence.
Importance of Following
Explanation on why following Channels is useful as a Cent user.
Following Channels is straight-forward and very important, since your personal feed (notated by your custom-user color dot on the home screen) is self-curated; any channels or users you follow will have the content displayed direct into this feed.
Shot of the the main screen when signed into Cent, with all the channels we follow.
Follow the topics you love the most (similar to following hashtags on Instagram, if you’re familiar). This adds you to that community and will put any new content posted there front and center when you sign-in to use Cent, so you can quickly start engaging and earning by interacting with those posts right away.
Ensure you follow the users you come across and enjoy as well, as their latest content will show up in this feed in reverse-chronological order.
Why Use a Bounty?
Explanation of a post lifecycle with a Bounty attached.
When you include a Bounty on a post, you’re not just giving away money. The point of Bounties originally was to incentivize micro-tasks (like photoshopping an image, taking a survey, etc), with the best responses being curated and subsequently rewarded by the community — but that overtime has evolved into something flexible and more generalizable that enables more engagement for any type of content post.
Along with more engagement, Bounty posts have a longer life-cycle. Instead of immediately going to New, and slowly fading from lack of engagement, your posts get more opportunities for interaction through each phase it moves to as notated by the graphic above. This makes it more inviting for Seedersto reward you as they may make a profit if your content gets further traction based on its perceived quality to the community.
In summary: the more times users get an opportunity to read or interact with your post, the more likely it’ll be seeded, engaged with — increasing your overall passive earning potential.
Content Farming with Seeding
Explanation of how seeds enable a passive social income, while curating the site’s content.
Getting passive rewards for every social interaction you do online? Sounds like a crazy idea at first — one rife with technical and regulatory headache using traditional payment rails. Here it isn’t, with every reply capable of being Tipped (via state channel micropayments), and every post capable of being Seeded, earning passive rewards is easy.
Since Seeds go on forever (as the seed channel doesn’t close), whenever a future user discovers one of your posts on Cent, and subsequently seeds it in the future, you’ll still get your passive cut of the reward, proportional to your weighting in the seed in the channel (which depends on how much you seeded compared to others). The more seeds you accrue, and replies you post, the more passive rewards you can garner overtime as the site grows. Your time spent socializing is now money!
Where’s the Money Come From?
A web of the value exchanges in the platform from the various primitives that can be engaged with.
The illustration above shows how new value (in the form of ETH) comes into the network. Built off Ethereum, the state channel wallet holds your value while it remains unspent in your account. New value accrues in the network with the help of Sorting or Tipping for those with no value in their wallets and starting from square 1; this makes the network more inclusive for less wealthy individuals.
Since a user can earn without needing a wallet, only an email, and just for using the platform naturally, the barriers to entry are much lower. That said, the value that accrues also gets re-distributed by those that don’t withdraw.
Sorters make ETH, or can get Tipped directly, and then use those funds for future bounties or seeds. All these interactions are eventually connected, creating a positive feedback loop of earning and social engagement.
Those that include Bounties on posts make additional funds from Seeding, or those seeds end up as direct entries in a user’s wallet from a non-bountied/bounties post, or they accrue when someone who has earned distributes it as a tip directly to a user. Everything is connected.
Social Network Experimentation
As you can tell, a simple system that abstracts away fees and gas, and enables seamless value exchange in novel ways can create sustainable ecosystems. We believe social networks built atop of Ethereum also help strengthen its social moat and network effect, and enables adoptees an easy on-boarding ramp without dealing with the really step learning curve of self-custody or setting up a Coinbase account.
Recently, Cent announced the ability to use its platform without a Web3 wallet by utilizing a mobile pin and authorization to interact with your Cent state channel wallet, As well as the addition of an in-app messenger, enabling you to send money instantly anywhere in the world with no fee, in just a click.
We believe these features, coupled with their teams’ commitment to a seamless product UX, makes Cent the most accessible and powerful social network built on Ethereum to date. We’re excited to see how the platform further evolves, and we’ll discuss any significant changes as they arise here to keep you up-to-date.