Pitch

by Jango – originally shared on revnet.eth.limo

Revnets are revenue-backed up-only networks, great for funding and sustaining open source projects and internet networks.

State of Internet Business

Open source software and openly accounted-for businesses should outcompeting everything.

• Scaled Collaboration: Global community accelerates experimentation, leading to more innovation.

• Full Transparency: Public code and accounting is more trustworthy.

• Cost Effeciency: Many managerial expenses are not needed when there are no secrets or artificial barriers to progress.

Problem

Open source struggles to enforce revenue-generation to pay for innovation, maintenance, and growth, making its development reliant on free and inconsistent labor, donations, grants, or corporate sponsorship.

• Monetization Dilemma: Generating scalable and unilateral revenue while keeping information openly copiable is fragile since extracting profit margins encourage the use of alternatives.

• Value Dilemma: Conventional models fail to adequately and consistently reward all contributors, reducing incentive to participate on all fronts.

• Dependency Dilemma: Many profitable businesses rely deeply on open source components, yet don’t have clarity on how to foster a productive financial relationship with its community, or motivation to do so unless developed in-house.

Solution

Revnets: A win-win-win openly-accounted-for growth model, for investors, builders, and retail customers of open source and beyond. Powered by the Juicebox and Uniswap protocols on Ethereum.

• Networks matter: The value around open source projects is created by the community of supporters that invest, build, and use them. Revnets take everyone’s contribution into account, providing a structured yet open way to sustain the project’s growth.

• Revenue matters: People prefer to pay for and help projects when they love what it stands for and benefit from its growth. Revnets encourage the community to capture revenue, creating a self-fueling economy around the project.

• Growth matters: With each generation of investors, builders, and users building upon the last, revnets are a predictable and self-propagating growth model.

• Incentives matter: As a structured revenue-backed growth model, revnets incentivize contributions from investors, builders, and users while providing clarity around ongoing financial relationships, making the open-source project more community-owned and less dependent on inconsistent external funding.

How It Works

1. Investment & Revenue Capture: When revnets take in money, they issue out an option on that money to the payer, and possibly a little to a builder. This means each payer receives a rebate that increases in value as the network grows or shrinks.

2. Scheduled Option Issuance: Fewer of these options get issued over time relative to the amount of money paid in, on a fixed schedule. This acknowledges the risks and contributions of earlier participants, increasing the value of existing options as new money comes in.

3. Option Exercise & Value Appreciation: When the option is exercised, the remaining options become more valuable as the total pool of available options decreases more than the amount claimed from the revnet. The revnet’s money can only be accessed via these options, ensuring controlled access to the funds for those who need immediacy, while incentivizing patience and growth for everyone else.

4. Market Dynamics: As liquidity is created, the options can be traded on exchanges, creating a market window between the ever-increasing price ceiling created by the price of issuing new options, and the ever-increasing price floor created by the value of exercising options. This market dynamic provides a bounded-but-tangible value proposition for initial and future investors, builders, and users.

A revnet’s fiscal policy results in the chart shown above. There are only few immutable parameters tuned when a revnet is deployed which determine the rate of price ceiling increases as the issuance of options decreases, and the intensity of price floor increases as options are exercised. Play with simulations at sim.revnet.app.

Learn more about how revnets work

Why Bet On Revnets

Revnets tie the act of paying for a public product to both a moral and financial incentive. By paying into the revnet, individuals not only fulfill a required or voluntary debt to the project and its supporting community, they also create a means of benefiting from future payment. This dual incentive structure motivates communities to support its own growth instead of opting for free alternatives that struggle to find sustainability.

Revnets are a clear, tangible, and equitable financial structure that address the long-standing monetization dilemma in open source, built specifically as an attractive model for networks of investors, builders, and fee-paying consumers alike.

Getting Involved

$REV specifications and information about the first season of revnets that’ll be live on revnet.app are available here.

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