In December 2018 we launched App Mining as the first-of-its-kind way to incentivize founders to build great decentralized apps. To date, the program has been more successful than we initially hoped. Over its 8-month run, the number of apps in the program has increased nearly 10x to over 150 and developers created password managers, productivity tools, content creation platforms, and more. The early success of the program drove us to think about how we might invest in making the program even better for founders.
Today we’re excited to announce that we plan to increase the monthly App Mining payout, which we anticipate will ultimately 10x from today’s amount when it reaches $1,000,000 per month in STX in May 2020.
High-quality developers as early miners is a powerful concept. We’re turning that concept into reality with App Mining. We collaborated with game theorists from Princeton and NYU on the incentive mechanism.
So far the App Mining initial pilot has paid out a cumulative $800,000 to the top apps —$100,000 in BTC per month. Starting next month, we plan to award $100,000 in Stacks token (STX) payouts in addition to $100,000 in BTC, doubling the total monthly payout. In November, we plan to increase the monthly payout to $500,000, entirely paid in STX (we plan to phase out BTC). In February we anticipate increasing to $700,000 in STX, before ultimately reaching $1,000,000 in STX by May 2020. App mining rewards in STX earned before the hard fork will be accrued and the tokens distributed following the hard fork, which we expect to happen within ~30 days after the close of the Stacks Token Offering.
|Payout Period||Payout Pool||Payout Share|
|August 2019 – October 2019||$200,000 ($100,000 in BTC* and $100,000 in Stacks tokens**)||20% of the remaining BTC payout for each sequentially ranked app + 3% of the remaining STX payout for each sequentially ranked app|
|November 2019 – January 2020||$500,000 in Stacks tokens||5% of the remaining STX payout for each sequentially ranked app|
|February 2020 – April 2020||$700,000 in Stacks tokens||4% of the remaining STX payout for each sequentially ranked app|
|May 2020 – October 2020||$1,000,000 in Stacks tokens||3% of the remaining STX payout for each sequentially ranked app|
More founders will earn more substantial payouts
Whereas today only a single developer or team is able to earn $20,000 in App Mining payouts each month, by next May nearly 15 apps will receive over $20,000 given the larger payout pool and new distribution rate. We believe that this increase will incentivize more teams to focus their efforts on building great decentralized apps. And by moving the payment to Stacks tokens, we’re aligning incentives with developers to make the platform successful. Put another way, the more successful the Blockstack ecosystem is, the better it is for developers (and vice versa).
Added incentives for the best new apps
We plan to incentivize new projects by awarding bonuses to the highest-ranked 10 new apps each month. For now, we’ll reserve a 10% equivalent of the monthly App Mining payout for best new app bonuses, and each of the 10 apps will each earn 10% of this additional bonus payout pool. For instance, if the total payout pool is $500k of STX, this additional pool will total $50k in STX, of which each app will receive $5k in STX.
|Month||Bonus Payouts (monthly)|
|August – October 2019||$10,000 in STX total / $1,000 in STX per team|
|November 2019 – January 2020||$50,000 in STX total / $5,000 in STX per team|
|February – April 2020||$70,000 in STX total / $7,000 in STX per team|
|May – October 2020||$100,000 in STX / $10,000 in STX per team|
That means that by next year a top-rated new app can make up to $40,000 in STX each month ($30,000 for App Mining and $10,000 for best new app bonus). We’re not only excited to expand the program in the coming months, but we are also optimistic that we’ll improve and expand the program even more over time.
Expanding and improving app reviewers
Along with an increase in App Mining payouts, we plan on improving the app reviewer process by increasing the number of reviewers that factor into ranking. When we originally designed App Mining, we designed the program to be as impartial as possible by partnering with four external entities that have provided inputs that signal app quality:
- Digital Rights, which is a measure of data ownership through security and encryption (the current reviewer is New Internet Labs).
- User Experience, which is a measure of user experience quality as determined by user testing (current reviewer is TryMyUI).
- Awareness, based on online reach (current reviewer is Awario).
- Product Launch quality, which is measured by excitement and demand at a product’s launch (current reviewer is Product Hunt).
Each reviewer has a proprietary methodology that helps them make objective judgments for why a certain app might be better than others. They are paid for the data they provide, and while we believe that the dimension each reviewer measures is important, we are willing to change data sources should a better reviewer emerge. To learn more about how these rankings are merged into an overall ranking — powered by an algorithm developed by game theorists and behavioral economists from Princeton and New York University — read the documentation here.
To improve the ranking process in the future, we plan on increasing the number of inputs that factor into a review. So in the coming months, we’ll be expanding the total number of reviewers (and what they measure) to cover additional dimensions that are good signals of app quality. While those dimensions are not currently finalized, you can imagine that we’re exploring inputs such as user growth, revenue, and more.
In closing, we’re broadening the concept of mining beyond miners who contribute computing resources on networks like Bitcoin. App Mining is not just an exciting way to incentivize founders and teams to build great decentralized applications, it’s an engine of app development that has been shown early signs of success. We’re optimistic that increasing the payouts by 10x will attract more founders to the ecosystem and couldn’t be more excited to continue to iterate and improve the program. Each step helps accelerate the transition to a user-centered Internet where fundamental digital rights cannot be taken away.
*The value of BTC will be based on market value at the time of the payout.
**The price of the Stacks Tokens distributed under the App Mining program in exchange for non-cash consideration will be deemed to be $0.30 per token for at least three months from the first distribution of tokens pursuant to this offering circular, for purposes of determining whether over $40,000,000 of Stacks Tokens have been sold under this offering. If at any time following that three-month period the Stacks Tokens are traded on one or more authorized exchanges or alternative trading systems, and there are trades for at least one million Stacks Tokens executed through or on exchanges or alternative trading systems during any calendar month (any such month, a “calculation* month”), then we will value the tokens paid to developers in the following month and in all subsequent months until and including the end of the next calculation month at the average closing bid price for the tokens during the calculation month. We will disclose both any changes to the price of the Stacks Tokens to be distributed pursuant to this offering circular, and whether the new calculation price will result in a curtailment of the number of Stacks Tokens being issued in the next month, using either an offering circular supplement filed under Rule 253(g)(2) or a post-qualification amendment, depending on the facts and circumstances at the time of such change.
The Securities and Exchange Commission (SEC) has qualified the offering statement that we have filed with the SEC. The information in that offering statement is more complete than the information we are providing now, and could differ in important ways. You must read the documents filed with the SEC before investing. The offering is being made only by means of its offering statement. This document shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
An indication of interest involves no obligation or commitment of any kind. Any person interested in investing in any offering of Stacks Tokens should review our disclosures and the publicly filed offering statement and the final offering circular that is part of that offering statement here. Blockstack is not registered, licensed or supervised as a broker dealer or investment adviser by the SEC, the Financial Industry Regulatory Authority (FINRA) or any other financial regulatory authority or licensed to provide any financial advice or services.
This communication contains forward-looking statements that are based on our beliefs and assumptions and on information currently available to us. In some cases, you can identify forward-looking statements by the following words: “will,” “expect,” “would,” “intend,” “believe,” or other comparable terminology. Forward-looking statements in this document include, but are not limited to, statements about our plans for App Mining, developing the platform and future utility for the Stacks Token, our Reg A+ offering and launch of our network, and collaborations and partnerships. These statements involve risks, uncertainties, assumptions and other factors that may cause actual results or performance to be materially different. More information on the factors, risks and uncertainties that could cause or contribute to such differences is included in our filings with the SEC, including in the “Risk Factors” and “Management’s Discussion & Analysis” sections of our offering statement on Form 1-A. We cannot assure you that the forward-looking statements will prove to be accurate. These forward-looking statements speak only as of the date hereof. We disclaim any obligation to update these forward-looking statements.