2020 has quickly signaled an emerging trend surrounding personal tokens – or a tokenized version of an individual used for either utility, speculation or some combination of both.
Today, we saw the launch of meTokens – a new form of personal tokens offering collateralized synthetic labor using bonding curves and the Stake on Me platform.
Today we're officially announcing that meTokens are now live at https://t.co/inq2ge17FY!
💁♀️ meTokens are a new kind of personal token
👹 they can be used w/DAOs, eg @MolochDAO
💎 are collateralized (always have value)
📈 issued using a bonding curve
🌐 now on @ethereum mainnet pic.twitter.com/1oOGFpy1Sd
— meTokens (@meTokens) April 13, 2020
Every meToken represents a deed to the future labor of a person or group of people like guilds or DAOs. This “synthetic labor” provides a financial instrument that can be exchanged for goods and services with its owner, all of which are backed by cryptocurrencies like Ether and priced on a bonding curve.
In comparison to something like Roll, meTokens are highly customizable and backed by different economic models relative to what the token is to be used for.
As a creator of a meToken, you can set your supply and choose between different types of bonding curves, all of which are based on unique economic models. The 4 types of designs currently offered include:
- Hustler who “work for their community”. Geared towards creators looking to have their tokens used in a wide variety of ways.
- Heros who’s “community works for them.” Geared towards creators looking to have their tokens used in a very tailored or specific way.
- Hypeman who “think aloud and get people excited.” Largely speculation driven and redeemed by true believers for big picture support.
- Custom – Build your own curve!
The novelty of this approach is that creators can have more flexibility over how the future value of their token should be determined, while redeemers can very easily see how the price of a given meToken will appreciate in different scenarios.
The usage of bonding curves on the creation of personal tokens is the first we’ve seen to date, effectively mitigating trust by allowing issuance, redemptions and withdraws to be handled by an autonomous smart contract rather than by the issuer themselves.
Lastly, the emergence of new use-cases like IOUs and Guild summoning requests create a novel approach to further democratizing distributed work.
How Do They Work?
An easy way to think of meTokens are as collateralized personal tokens – or personal tokens backed by cryptocurrencies. A fantastic primer of collateral tokens and how they work can be found here.
The TLDR version of this design can be largely synthesized as follows:
- Every meToken has three functions: mint, deposit and withdraw
- Only creators can withdraw collateral from the curve by burning meTokens.
- Both creators and redeemers can mint new meTokens or deposit to the curve.
- The mint and deposit functions are very similar with one key difference. When minted, new meTokens are minted at the current collateral rate. When depositing collateral, no new meTokens are minted – causing the amount of collateral backing each meToken (and the subsequent price of that token) to increase.
The Big Picture
Just this week, we saw prominent community member Alex Masmej close his $20k round using personal tokens. Gitcoin recently posted a $7k bounty for the creation of personal tokens into their platform. While there are a dozen other examples to highlight, personal tokens are gaining some serious traction.
The Initial $ALEX Offering is now complete! Thank you so much to the 29 participants 🎉
$20,000 raised in 123 hours since Medium article went live
Proportional airdrop will start soon. pic.twitter.com/T2OoY4e9Tf
— $ALEX Masmej ☄️ (@AlexMasmej) April 12, 2020
What’s lacked so far to date is a reputable platform which a) allows users to easily purchase and redeem tokens and b) bakes in mechanics for price to be adequately determined based on the underlying collateral, rather than by sheer speculation.
Taking this a step further, meTokens offers a novel approach for owners of tokens to redeem collateral for exogenous assets like ETH or Dai with tried and true value, all without having to figure out how to enter in a personal token contract address on Uniswap and hope that there is underlying liquidity.
All in all, we’re quite excited by the rise of personal token launchers like Stake on Me.
Cooper is the Editor of DeFi Rate and an active contributor to leading DeFi media outlets like The Defiant, DeFi Pulse, and Bankless. He works with early-stage teams through Fire Eyes DAO to incubate governance models and grassroots community development. He is an ambassador to Set Protocol and an author of a weekly publication called Token Tuesdays. To stay up with Cooper, follow him on Twitter.