Dissecting the Smart Media Token (SMT) Whitepaper (an Easy Overview)
So, I've read the Smart Media Token Whitepaper. It is written in 'Geekanese' so not the easiest to digest. However I think I've got the gist of the concept and in this post I will attempt to breakdown the Smart Media Token value proposition.
I won't cover my personal views, I'll reserve that for a later post.
I also will not cover the technical details of how Smart Media Tokens are set up. The whitepaper is 60 pages long, half of it (pages 12-42) is an "Owners Manual" really geared towards those interested in the mechanics of setting up a Smart Media Token. I'll leave it to others with a more technical bent to audit that!
I'll try and stick to the value proposition and hopefully do so in simple layman's terms.
Understanding the Smart Media Token (SMT) idea
User Generated Content (UGC)
There are a number of social media, blogging and news platforms in the world today that enable users to submit user generated content (UGC), be it posts or comments. Most platforms provide a means for readers or viewers of UGC to express their approval or disapproval of UGC either through votes/ likes and comments.
Until now there has been no way for users to easily monetise their engagement. Smart Media Tokens aims to be a way of enabling website owners to offer their users just that, in their existing platforms.
Smart Media Tokens - powered by STEEM
Smart Media Token (SMT) will be tokens (created on the STEEM blockchain by website owners) that can be distributed to users of social media and websites. Distribution will be based on the 'likes' or upvotes users receive on their UGC. The tokens can be integrated natively into existing websites.
Vote weighting
The token creator determines how much 'weight' each upvote carries. Each vote can carry the same weight. Or there can be stake weight voting, meaning the more tokens a voter holds the more weight their vote carries.
Token creation
Anyone can create a token and give the token a name. Upon creation the token creator determines (a) the total number of tokens that will be in existence (b) the amount of tokens that will be issued upfront (c) the rate at which these tokens will be issued and over what period of time.
Token allocation
The new tokens issued (e.g. on a daily basis) go into a "rewards pool", the voting will determine how those token will be allocated to users. The initial distribution of coins can be determined by the token creator.
Monetising tokens
It is ultimately for the token creator and the token's community to find new and innovative ways to create demand (and therefore value) for the token. SMT simply creates an out-of-the-box mechanism for tokens to be created, distributed and traded in exchange for other tokens/ STEEM and eventually into 'real world' currency. The whitepaper does put forward 5 potential use cases:-
- Content Publishers - using SMTs to reward subscribers through a comments interface
- Forums - enabling it's communities to tokenise their niche
- Online bloggers - using comment widgets on sites like WP and Blogger to reward commenters. Developers of widget can share in rewards
- Moderators - mods of e.g. sub-reddits or Steemit communities (when they come) can launch tokens for subscribers and to raise funds
- Arbitrary Assets - tokens can be pegged to 'real world' assets
How do token holders trade these tokens?
The STEEM blockchain will have an internal market, where all SMTs can be bought and sold. It is also claimed in the whitepaper that an 'automated market maker' (largely based on the Bancor Protocol) can be created upfront 'providing perpetual liquidity to an SMT community'. I.e. Token holders will always have the ability to sell their coin when they want. (NB: I'm not qualified to substantiate or refute this claim)
Shared Influence
Token creators also have the option to decide whether (and to what degree) STEEM holders/ other SMT holders have influence their token's distribution. Meaning that token creators can incentives holders of other tokens to get involved in their token.
Fund raising/ ICOs
Token creators can, if they so wish, sell an initial supply of their tokens (privately or publicly) in an Initial Coin Offering (ICO). The ability to easily set up an ICO will be baked into the SMT creation set-up process.
Splitting Rewards
There is an option to split token rewards between up to eight (for now) beneficiaries. E.g. Creators of comment widgets and apps can code a reward split into their application. Authors can split rewards with other contributors to their content.
Cost of token creation
1 USD (and a STEEM account) is all that is required to create a SMT. The fee is paid in a Steem Backed Dollar which is then burned.
That's it!
There you have it. An overview of Smart Media Tokens on the STEEM blockchain. This is by no means an endorsement of the concept. I'll save my views for another post! However I did think it would be useful to pull out all the key components of this proposal as I see it.
Let me know anything I've missed out (or misunderstood!) in the comments section below. I hope you find this resourceful.
This is just what I have been looking for. Someone that uses English to explain the core concept and function of SMT. You explained everything very well and even I got it.
The more demand for steem the better, this sounds good to me :)
Thanks for taking the time to breaking it down and explaining it in non geekinese !
Wish you a good weekend !
I just need a video on how the smt is created
Very well thought out and easy to understand explanation. I've read so much on this today my heads spinning, but I feel I have a pretty good grasp of this now.
It seems to me, that all new SMTs are derivatives and essentially backed by Steem, this would create a very significant demand for the Steem token resulting in a much higher Steem price.
I see a plethora of reasons for wanting to do bring this platform to an existing or new website to attract and incentivize users. This will very interesting to see how this unfolds.
Can't wait to read your personal views on it. If it's another nanzo-ned conversation I'm really looking forward to it!!!!
Great post. Though STEEM is the currency, the network is Steem!
So how does this influence the price of STEEM. I see the increase in the use of the STEEEMIT blockchain and the potential to increase the number of users but price of STEEM. Still a bit lost.
Hi Cody, see my above comment STEEM is the currency, Steem is the blockchain and Steemit is the social networking platform (blockchain explorer).
Re: Price implications - Just like ERC20 tokens, where people have to use Ether to participate in the ICOs, people who wish to participate in SMT ICOs are going to need to purchase Steem :)
Steem will be a far better blockchain for ICOs as the transactions are ~ instant and there are no tx fees.
Interesting distinction between STEEM and Steem. I've just used STEEM as I like the capitalisation!!
Nice little run down of the increadibly dense whitepaper.
I would personally like to hear your views on it, after reading your runover of snip, you get down and deep ;)
Once again, Im excited to utilize this... curious what you think about tho. Ripoff of eth Erc20?
I think its a great move forward for the steem blockchain as other chains are also working towards this smart token approach.
Helpful thanks. I'd be interesting in knowing how easy it would be to set one of these up. Not aimed at a technical person but explained for a layman. Can anyone do it?
Depends on UI. With a good UI it should be easy to setup and manage.
Well, let's hope it's user-friendly. I quite like the idea of having my own token!
I tried reading it last night and failed,guess i was tired or it was written in gekanese hahahahaha
You have given us an overwiew of the whole whitepaper.
According to your analysis,it is a great way many people,businessesa reable to monetize their content.
This is really amazing and it will make Steemit grow massively when the implementation begins.
We should expect massive numbers of new users here before end of this year.
A SMT will be exchanged through STEEM, so we won't have a pack of SMTs and STEEM only one of them. We will have STEEM, and after that a cluster of SMTs over STEEM. Market-wise, this will in all probability help interest for STEEM, as a token.
Additionally, the SMT age system is far more mind boggling than only a token issuance on the Ethereum stage. When you dispatch a SMT, you truly dispatch a thin layer of Steem-application-forms over your substance, including your own particular prizes pool, your own particular swelling model, your own particular voting and curation calculations and your own vesting component.
Hope this helps.
If that's the case, then we'll win.
Just like that :D
I heard about this yesterday and I quickly went for the whitepaper. The whitepaper was one I found myself dozing intermittently. But with this demystified analysis up there. I'm sure going back to it. I should lend an input in your next post. Thank you.
Thanks for your time to read the white paper and report on it.