So, I thought I’d chime in here and elaborate on my position made in #312-janitors.
I am not a proponent of the idea for fee the way it’s being presented, why? Well it boils down to incentives, we need to pay people to use Status, in the sense that people need to be able to profit from participating in the network, that’s why network incentivization and user aquisition engine are so important.
The reason we’re not working on the User Aquisition Engine is because it’s network effects on steroids and Ethereum doesn’t scale yet, although we’ll implement it after the lesser SNT use-cases.
The mental model of rent extraction, is largely rooted in the gatekeeper business model which is predominant in Web 2.0. “I provide service, you have to go through me to get said service, I extract rent from you by taking a fee”. That’s what Uber does, they middle man a network, and they also prevent the network from voluntarily improving the network.
LINE is doing exactly the same thing. Users can’t improve the sticker market by contributing code, they have to have LINE’s approval (thereby censoring and distorting the marketplace) and LINE takes a massive cut. What a shit deal for users. Doing this we’re making more work for ourselves, by enshrining ourselves (Status GmbH) as the provider’s (and governers) of the solution, it’s incredibly inefficient.
Infact it’s common for web2.0 business models to waive the fee until they get large enough network effects and then shanghai their userbase by dumping a fee on them later, it’s very feudal.
I heavily considered typical business models when Ethereum first started and came to conclusion that they don’t work. why?
Aside from them being inefficient, Ethereum is weird, in decentralised application it’s very difficult to concentrate power as the middle-man, because we disintermediate them. That’s why Status is open source, to minimize the ability for us to centralize and work against the users in the event we attain real network effects.
Better business models revolve around making a market and then acting as a node within that market, or some kind of transactional layer that requires the token to function (which is why messaging incentivization is important for SNT and our real asset)
This allows people to buy into the network, and improve it with their self-interest to maximise their return. Token’s represent networks of belief, they believe in the idea the token represents, even if that’s as simple as expecting the value to appreciate.
You can view Ethereum as a medium of pure free trade, more concretely anyone can take your smart contract code, your application code and ‘neuter’ the fee and re-deploy it, they can do this for less than $0.50 in 30 seconds or less. It’s basically piracy, they don’t have the overhead of creation of it.
This move undercuts your service and is more competitve than your service, and will win in the long run as your fee cannot compete with zero-margins.
So how do you prevent them from undercutting your service? Well, you look at the incentives.
The question isn’t “how do we recoup our development costs?” (which is insignificant in the scheme of things, and I understand that most people in Status haven’t experienced the appreciation of a token’s value)
Also don’t forget that the network participants paid for this, it’s not our money, they entrusted us with their money. We are working to reinforce their belief in us.
The question is “how do we make the bad behaviours unprofitable? or how do we make participation profitable?”
Remember, no one is going to use Status unless we (the network) pays them, unless they can earn from onboarding people into the network.
Also by virtue of you holding SNT, it’s very important to understand that you are part of the network, taking a fee isn’t going to make you richer, it’s probably going to make Carl and I richer and by our good graces we decide to put it back into the network (btw it’s not a charity, we’re SNT holders too and we want the value to go up for ourselves out of our own self-interest).
If you view every SNT holder as part of the organisation (think of them like shareholder, remember how I keep saying there is no us vs them, no internal vs external) then you want everyone in the organisation to profit, to prosper from what the network creates.
If we hold that idea in mind, and we want people to, then the ‘fee’ should be burning of the SNT. This is deflationary and therefore rebalances the value into the remaining SNT. Therefore everyone profits and the need to work against the network, to pirate the code is mitigated.
Because piracy of the code recognises value of the code, of the product - then by simple self-interest it’s better to participate in the network, buy more SNT and get more people buying stickers, which means getting more people to use Status to buy more stickers.
You want to capture that individuals interest, their enthusiasm and allow them to profit and contribute, thereby the entire network benefits and you’ll create stronger network effects.
All of our SNT use-cases should exist to create stronger network effects, by allowing everyone to earn more value by participating in the network. You want people working for the interest of the network and what it stands for, you don’t want to make them work against the network.
If you want to recoup development costs, then maybe it’s acceptable as an voluntary donation to the DAO in the UI.
Rent extraction that the network doesn’t profit from is short-sighted, alienates and works against our network. The very thing we’re trying to grow. This is bad.
Now if we do have a fee, there’s a big question of pricing it. I’m open to suggestions. Some ideas to explore are quorum based setting or some kind of difficulty-like adjustment.
(If we do come up with some sane fee, we could use the same for the 
)