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<!DOCTYPE html>
<html lang="en">
<head>
<meta charset="UTF-8" />
<meta name="viewport" content="width=device-width, initial-scale=1.0" />
<title>About</title>
<link rel="stylesheet" href="style.css" />
<style>
body {
max-width: 600px;
margin: auto;
}
li {
margin-bottom: 1em;
}
</style>
</head>
<body>
<nav>
<ul>
<li><a href="/">Home</a></li>
<li><a href="/about.html">About</a></li>
<li><a href="https://t.me/revnet_eth">Community</a></li>
<li><a href="https://www.revnet.app/">Make a Revnet</a></li>
</ul>
</nav>
<h1>About Revnets</h1>
<p>
Let's say you want to build an open-source alternative to Google Maps.
Unless you want to build it by yourself, you'll need some type of
organization.
</p>
<ul>
<li>
Something like an LLC or a C corporation could work, but you would have
to deal with legal fees, paperwork, and management.<sup>1</sup> These
structures make sense for working with investors, but investment can
have its downsides: after months of outreach and negotiation, you may be
left with unfavorable terms or lose control of the project down the
line. Investors might push you towards risky growth strategies,
short-term goals, or selling the company.
</li>
<li>
You could set up something more experimental like a DAO, but this comes
with its own challenges – you have to figure out governance and onchain
logistics before you even get started, and DAOs come with risks like
governance takeovers that you don't want to worry about.
</li>
<li>
You can try to make things work without a formal organization, but a
lack of pre-determined rules and boundaries can lead to disputes later
on. The risk of this happening makes people less likely to buy in.
</li>
</ul>
<p>
Even if one of these options <em>did</em> work, how would you attract and
grow a network of users to write reviews and label addresses?
</p>
<p>
We ran into this exact problem when building our own software projects:
why wasn't there a simple way to set up rules in advance, and
automatically share money with a network of supporters as it comes in?
</p>
<h2>Our Solution</h2>
<p>
To solve this, we're building "Revenue Networks" or <b>Revnets</b>, which
are a new way to get your project started and fairly share money with your
entire network of investors, workers, and customers. Revnets are designed
with a few key principles:
</p>
<ol>
<li>
Anyone who supports a Revnet should get some of its revenue, whether
they're a worker, an investor, or a customer.
</li>
<li>
Revnets are owned by everyone in the network. Everyone interacts with a
Revnet according to the same rules.
</li>
<li>
Those rules should be set in place when the Revnet is created, and
impossible to change afterwards. Money can only come into or leave the
Revnet as those rules allow, making scams and
<a
href="https://www.coindesk.com/learn/what-is-a-rug-pull-how-to-protect-yourself-from-getting-rugged/"
>rug pulls</a
>
impossible.
</li>
<li>
Anyone can make a Revnet and use it for whatever they want. Revnets
shouldn't depend on us or third parties to work.
</li>
</ol>
<p>
To accomplish this, we built Revnets using
<a href="https://ethereum.org/en/smart-contracts/">smart contracts</a> on
Ethereum (a smart contract is a computer programs uploaded to the
blockchain). Our smart contracts don't have an owner and will keep working
as long as the Ethereum blockchain is active.<sup>2 3</sup>
This means Revnets will keep working, even if we stop supporting them.
Also, Revnets don't depend on legal enforcement – unless the contracts get
hacked, it's impossible for anyone to break a Revnet's rules.
</p>
<h2>How Revnets Actually Work</h2>
<p>
When you make a Revnet, you pick which currency you want it to accept.
Since Revnets are built on Ethereum, ETH is the simplest option.<sup
>4</sup
>
</p>
<p>
To represent a Revnet's ownership (and a claim on some of its revenue),
Revnets use tokens. Tokens are really just numbers stored on a smart
contract – you can just as well think of these as "points", "credits", or
"options".
</p>
<p>
Let's return to our Google Maps alternative. We'll make a Revnet named
<b>MapNet</b> which accepts ETH and uses MPN tokens to represent MapNet
ownership.
</p>
<p>
Anyone can pay MapNet with ETH to make new MPN. The price to make new MPN
is also called the <strong>price ceiling</strong>. At first, it costs 1
ETH to create 1 MPN, but MPN will get more expensive over time, depending
on the price ceiling's <i>increase frequency</i> (how often the price
increases) and its <i>increase amount</i> (how much the price increases).
</p>
<p>
Anyone can destroy their MPN to get back some ETH from MapNet. The amount
of ETH you can get back is also called the
<strong>price floor</strong>. In the most basic scenario, if you have 1%
of the total number of MPN tokens and destroy them, you get back 1% of
MapNet's ETH.
</p>
<p>
MapNet can also have a price floor tax, which means you would get back
less than 1% of MapNet's ETH. That ETH you didn't get would stay in
MapNet, raising the price floor for everyone else. The price floor also
increases as it gets more expensive to make new MPN (as long as people
keep making it). This is why Revnets are 'up-only' – as long as network
activity continues, the price floor should continue to rise, backing the
value of everyone's MPN.
</p>
<p>
The most you can lose is the gap between the price you bought MPN at and
the price floor. Over time, that gap should shrink, and eventually become
profit.
</p>
<p>
MapNet will make MPN at the price ceiling until a
<a
href="https://support.uniswap.org/hc/en-us/articles/8829880740109-What-is-a-liquidity-pool-"
>Uniswap pool</a
>
(trading market) forms between MPN and ETH. From that point onwards, while
MPN's pool price is between the price ceiling and price floor, MPN will be
purchased and sold in that pool. If MPN's pool price reaches the price
ceiling or price floor, the MPN supply will grow or shrink to meet that
demand, keeping the pool price between the ceiling and floor. This keeps
MPN prices stable and predictable, making people more confident in the
token.
</p>
<p>
To boost early growth, MapNet can set up a
<strong>boost</strong>. A boost sends some MPN to a wallet address called
the <i>boost operator</i> for some time after MapNet is created. For
example: "for the first 100 days, when people buy MPN, send 10% of it to
our developer team's wallet".
</p>
<p>
MapNet can also pre-mint some MPN to that address when MapNet is created.
These tokens can be used as a budget to pay a for early development, but
they can also be used for staking rewards, an airdrop stockpile, or
something else.
</p>
<h2>Why it Works</h2>
<ul>
<li>
MapNet development needs some heavy lifting up front to get the basics
working – the boost (and pre-mint) can be used to encourage early work
from a team of developers.
</li>
<li>
Because MPN gets more expensive over time, early MapNet supporters are
rewarded for taking greater risk, and have more of an incentive to leave
reviews, label addresses, and use the platform. If it grows, they win
too.
</li>
<li>
Holding MPN means you own part of MapNet – the more valuable MapNet
becomes, the more valuable MPN becomes. This makes workers, investors,
customers, and other MPN holders more likely to support MapNet's growth
through referrals and word-of-mouth.
</li>
<li>
Because of the price floor, the tokens can never lose all of their
value. This makes Revnets safer to participate in.
</li>
</ul>
<p>
But you need to be careful: the rules that control MapNet's price ceiling,
price floor, and the boost are locked in place once MapNet is launched. If
your boost or pre-mint is too large, it might feel unfair and make people
less likely to support the Revnet. If the price increases too quickly, it
might cause liquidity issues later on. To get a sense of how these options
play out, experiment with the
<a href="/">Revnet simulator</a>.
</p>
<p>
Software companies sometimes use investor funding to make their product
free, or cheaper than its alternatives. Once their product has enough
users, the company will raise prices, often leaving users worse off than
they were before.
</p>
<p>
Revnets take a different approach: nothing is free, but customers know
exactly what they're getting into. If the project grows, the network of
people that made that happen is rewarded for it. And if the project fails,
losses are limited – even in a worst-case scenario, people can always get
some ETH back by destroying their MPN.
</p>
<p>
We think that Revnets will work best for open-source software,
decentralized protocols, social networks, and platforms which rely on
user-generated content: a platform which fairly rewards its users can
attract and retain people better than one which doesn't.
</p>
<p>
If you want to talk through an idea, message us on
<a href="https://discord.com/invite/6Zr7Rtv6Ea">Discord</a> or
<a href="https://t.me/revnet_eth">Telegram</a>.
</p>
<h2>Further Reading</h2>
<p>If you'd like to learn more:</p>
<ol>
<li>
Message us on
<a href="https://discord.com/invite/6Zr7Rtv6Ea">Discord</a> or
<a href="https://t.me/revnet_eth">Telegram</a>. We'd love your input.
</li>
<li>
See our
<a
href="https://raw.githubusercontent.com/rev-net/whitepaper/master/whitepaper/revnet.pdf"
>yellow paper</a
>
for an in-depth explanation of the Revnet's mechanisms.
</li>
<li>
The Revnet smart contracts are available on
<a href="https://github.com/rev-net/revnet-contracts">GitHub</a>.
</li>
<li>
More Revnet writing is available on
<a href="https://revnet.eth.limo/">revnet.eth.limo</a>.
</li>
</ol>
<hr />
<p>
Using a revnet could carry significant legal and regulatory risk. Be sure
to consult an experienced legal counsel in your jurisdiction prior to
usage.
</p>
<p>
<sup>1</sup> Depending on the nature of your project, your Revnet may
require a legal entity. Talk to a legal expert about the relevant
regulations in your jurisdiction before using them.
</p>
<p>
<sup>2</sup> Operating on Ethereum means users must pay gas fees to
interact with Revnets. This can be expensive on Etheruem mainnet, but
we're planning to deploy Revnets on
<a href="https://ethereum.org/en/layer-2/">Layer 2 Networks</a> where gas
fees will be negligible.
</p>
<p>
<sup>3</sup> There could be smart contract exploits, or exploits in the
Ethereum blockchain itself. Always do your research, and exercise
appropriate caution.
</p>
<p>
<sup>4</sup> Revnets can accept and denominate prices in other currencies.
</p>
<p>
<i
>Thanks to Jango, Mieos, KMac, Sage, Sofia, Hans, Grace, and Owen for
reading drafts of this.</i
>
</p>
</body>
</html>