In recent years, alternative ways to raise capital has risen in popularity. Crowdfunding lets projects to be funded by raising small amounts of money from a large number of backers. Subscription patronage lets fans support their favourite Creators with regular payments in exchange for goods or special perks. Both crowdfunding and subscription patronage has helped creators reduce risk and generate a reliable income from their work. Lots of interesting projects would not have been possible without them.
However, deplatforming has become a major risk to fan funding. Large tech companies can and have deplatformed and demonetized many independent creators with little explanation or notice. This phenomena effectively destroys creators’ audience and income should it happen to them. This is especially true because of data silos and platform lock-in.
In a centralized system like Patreon or Kickstarter, one party has control over everyone else. The intermediary is able to make decisions on behalf of other users within the system, whether they like it or not. Platform censorship is strengthening the case for decentralization.
We were inspired by Vitalik's post on Harberger Taxes: https://vitalik.ca/general/2018/04/20/radical_markets.html which highlighted a way to solve problems using free market mechanisms.
In addition, Non-Fungible Tokens (NFTs) are an interesting, decentralized asset class that are seeing widespread adoption in different domains such as gaming and art.
What it does
Patronage Collectibles is decentralized crowdfunding. It's a decentralized version of crowdfunding platforms such as Patreon.
Creators create and sell Harberger Taxed ERC721 non-transferrable Collectibles to Patrons, without the need to work with a centralized high-commission platform. Taxes are paid directly to the Creator in a recurring fashion.
Patrons can buy limited edition Collectibles that fund their favourite Creators in a recurring fashion by pledging taxes. Patrons can then redeem these Collectibles to unlock exclusive patron-only content and other special perks determined by Creators.
How we built it
We implemented the protocol as Solidity smart contracts, with the help of the Truffle dev suite. We use React.js and Drizzle to build the DApp frontend application which can be interfaced with the Metamask web wallet.
Challenges we ran into
- Designing recurring payment abstractions on a smart contract platform, when transactions can only be initiated by an Externally Owned Account (EOA) and can't be scheduled in a recurring fashion.
- Debugging reverted transactions during Solidity smart contract development can be painful!
- Drizzle and Metamask can arrive at inconsistent states between contract migrations which breaks the local DApp state and requires a hard refresh.
- Having to cut our initial scope to ship on time.
Accomplishments that we're proud of
- Working implementation of Harberger-taxed ERC721 crypto-collectibles (with unit tests!)
- We built a working MVP DApp frontend from scratch! Creators can create collectibles, collect pledged taxes from patrons, and browse their list of created collectibles. Patrons can browse a Creator's collectibles, buy, pledge taxes, and set new prices for their owned collectibles.
What we learned
- Harberger Taxes
- Building DApps (Solidity, Drizzle, etc.)
- UI/UX design
- Business pitching and marketing
What's next for Patronage Collectibles
- Deploying a live version on Rinkeby and Mainnet
- Exploring the game theoretic aspects of Harberger taxed cryptocollectibles
- Exploring a dispute resolution layer for creator-patron fulfilment using decentralized governance / moderators.
- Exploring other recurring payment abstractions e.g. ERC1337, ERC1820