Commun / consists of communities, the basic mechanics of which implies the ability to monetize content published in them.
Each community consists of:
* User-generated content
The last topic is something that we will discuss in this post.
The vital for understanding the economy of Commun / are the following concepts:
* Commun / CMN token
* Community Points
* A reward mechanics automated by smart contracts
The Commun (CMN) token is the underlying asset of the Commun / application. 4,500,000 000 CMN tokes were issued when Commun / was launched on the mainnet. The precision is 4 decimal places. The White paper states that it’s possible to issue CMns additionally in amount of 1% per annum one year after the launch of Commun /. The maximum possible amount of tokens that can be issued is 10,000,000,000 Commun /. There are several mechanics for burning CMN tokens, for example, currently 1000 CMN tokens are burned when the community is launched.
CMN token can be:
* Transfered to another user, without any commission
* Used as collateral when building a community
* Converted to community points and back
* Used when voting for Commun leaders (when the platform will be decentralized)
* Bought and sold through the third-party providers (currently only bought)
Buying / selling of CMN token
Immediately after the release, 50% of all CMN tokens were transferred to the c.reserve account. The tokens from this account are sold to payment providers (currently ChangeHero.io), which enable purchase of CMNs for the end users.
Any transfers of CMN tokens between users are free of charge. If a transfer is carried out by Commun / clients (iOS, Android or commun.com web-application), we provide the necessary bandwich.
The community in the applicable smart contract contains the following objects:
1. Users interested in the topic of the community
2. Leaders chosen by the users who provide community management, including moderation
3. A set of rules and descriptions written by users or leaders and approved by the leaders
4. Content, a collection of posts and comments, that users generate
5. Rewards in the Community Points that are distributed to the users who publish content, rate content (like / dislike), comment on content, as well as to the community leaders. The distribution occurs in a ratio of 45% / 45% / 10% (authors, curators, leaders). The top-10 posts on daily basis are rewarded.
6. The set of parameters for the reward system
7. The set of parameters for the exchange of CMNs to Community Points and vice versa
The community rewards are distributed in points. Each community has its own Communty Point. Community Points are created in the commun.point contract.
Creating Community Points is a prerequisite for building a community. When Community Points are created, the community economy is configured through the parameters.
1. Initial rate of Community Points to CMN. The minimum amount of CMNs needed to launch a community is equal or higher than 1 CMN. Currently the Community Points are created according to pre-set up parameters, but in the future the creator of the community will be able to specify the amount of Community Points to be issued. While creating a community, the maximum possible number of points that can be produced are set (max_supply). When Community Points are created, CMNs go to a special community balance (reserve), and the generated Community Points are sent to the creator’s balance. Community Point balances are stored in a smart contract. Also, the smart contract stores the current number of generated Community Points (supply) and increases this value when new points are issued or decreases it when points are burned. After the initial rate of Community Points to CMN is set the “Bonding Curve” exchange algorithm starts working.
2. The next parameter, which is set when creating a community, is the coefficient of dependence of exchange rate on volume, which is called CW (Connector Weight). At the moment, this parameter is hard-coded and equals 0.3. This parameter directly affects the performance of the Bonding Curve. Unlike a regular exchange, where any transaction takes place between users, in the case of Bonding Curve, the user creates Community Points through a smart contract. When exchanging CMNs to Community Points, their total volume (supply) increases, and when exchanging Community Points to CMNs, it decreases. Consequently, user’s actions affect the Community Point / CMN exchange rate. When exchanging CMNs to Community Points, CMNs are saved on the balance of the smart contract in the form of collateral. When exchanging Community Points to CMNs, the Community Points are returned to the contract, which burns them (withdraws them from circulation) and transfers the corresponding amount of CMNs from the collateral balance to the user. At the same time, the exchange rate of a Community Point decreases. In our case, the amount of Community Points also changes when new Community Points are issued to reward the active community members. In this case the amount of CMN reserve tokens stays the same. Thanks to CW, the Community Point / CMN exchange rate is adjusted correctly when the volume of Community Points changes during the issue. When CW is close to zero, the Community Point / CMN exchange rate increases sharply, and when CW = 1 (100%) it is constant.
3. There are several more parameters that are set at the start, namely, a fee, a commission for converting CMNs to Community Points and vice versa. This commission determines the percentage of converted CMNs that will be burned. There is also a transfer_fee, a commission taken for transferring Community Points from one user to another. This commission determines the percentage of the transferred Community Points that will be destroyed. And there is in addition min_transfer_fee_points, a minimum possible commission for transfer of Community Points.
The Commun smart contracts have an option to set up and change the parameters of communities by the community creator. It could be (and should be) activated in the future.
The information given above is basic for understanding Community Point emission, reward system and the Bonding Curve algorithm.