Crowdfunding with dynamic donations

Idea: Something akin to Patreon but with fixed upper limits so that the donation amount per person can be automatically reduced if enough donors exist.
In other words: Crowdfunding with automatically decreasing cost per funder once enough funders exist and further funders join.

Intended purpose: Eliminate / Decrease donor effort (manual adjustments / long-term cost) to increase the incentive to donate at all.
Side effect: A project is automatically only given the money that it “deserves” in each individual donor’s opinion.
Potential for abuse: Of course this doesn’t prevent misrepresentation of a project’s costs or flat-out scams.

Purpose of this topic: This is just for discussion, to gather related ideas or opinions; I myself have no intent to implement something like this (because I couldn’t atm ^^).
Perhaps someone knows of an existing platform that implements this kind of system?

Longer description:
This idea doesn’t exactly need the SAFE Network, but due to the ongoing discussions about incentives in https://safenetforum.org/t/poll-should-maidsafe-implement-ptp-pay-the-producer/5805 I thought why not just bring this little idea up here.

So let’s say we have a producer who needs funding to continue working on whatever™.
This producer uses the funding platform to present the work and to specify how much currency is required for whatever™, per time unit (e.g. per month).

Once a consumer decides to become a donor, at least the following has to be specified by this person:

  1. Individual setting (aka “donation-limit”): The maximum amount per time unit that the donor is willing to pay to the producer.
  2. Individual setting (aka “donation-target”): The maximum amount per time unit of total donations the donor is willing to support - i.e. by default this would be what the producer has specified for whatever™ at that point in time.

Just for the sake of the example’s clarity let’s say every donor has chosen the same settings.
Now let’s say more people continue to join as donors and the total donations combined (per time unit) surpass the donation-target (setting nr. 2).
From now on the amount that every donor pays is automatically reduced so that the cost of the donation-target (setting nr. 2) is shared among donors.

This could lead to ever more people joining in as donors (since the individual donations will likely decrease, and can never go above the selected individual donation-limit),
which in turn gives the producer a more stable income basis to stand on.

Outside of this example many donors would choose different settings and change them over time, the producer’s needs could change, and possibly more complex systems could be introduced (e.g. donor settings across multiple projects).

Poll: Would you like such a crowdfunding system & do you think it would be overall beneficial?

  • Yes!
  • No!
  • Undecided: I am not sure.
  • Undecided: Idea description is too unclear for me.

0 voters

2 Likes

I like the idea in theory, but how would the producer ever be able to raise his total price effectively? I would see two types of producers.

  1. If the producers donations have reached the maximum cap, but they keep adding users donating, some would be tempted to simply up their maximum, until the total donations are below the cap again. This is kind of shady behavior, even if each user willingly agreed to some maximum monthly donation. This could significantly damage user perception of the platform.

  2. Some producers would have a hard time justifying raising their maximum donation cap to their users, whether because they simply don’t like confrontation, or maybe they feel their work doesn’t justify it, thus, they would effectively make themselves poorer year over year as inflation sets in.

I would suggest adding a system where a producer could do one of two things.

  • During the creation of their donation maximum, they cannot change that maximum, except by automated increases preset and clear to the donators. Example: They set their donation maximum to automatically rise by 10% per year to account for inflation, and to allow for program growth. This increase defaults to a minimum 3% per year to take a little pressure off those that feel anxiety around asking for more money.

  • A producer should be able to create multiple campaigns under their account. Meaning, if a producer presents Project A to the userbase to donate to, yet, as proposed above, they don’t have the ability to raise their maximum to branch into another project, they can start a second campaign for Project B which people can donate to separately, or, the userbase can select multiple campaigns they are willing to donate to, and their donation will be spread through all of those projects, up to their maximum.

1 Like

As I intended to state with “setting 2” above, the maximum is set per donor. So if the producer ups their maximum, the donors have to manually agree to up their individual maximum setting.

Edit: To (hopefully) clarify further, there are 2 settings per donor in the described base system.
Nr. 1 states how much they are willing to pay to the producer AT MOST per some time unit. They will never ever donate more than that.
Nr. 2 states the maximum of the total donation amount of all donors that they are willing to support. If the total donation amount is higher than this, then their own donation amount will be reduced.

Sure perhaps that may happen, but that would absolutely be their own fault. (And as stated above, raising their maximum doesn’t automatically up the individual donor’s maximum, so a confrontation between producer & donors couldn’t happen due to that; only due to their communication and behavior.)

But your proposed alternatives could definitely be extensions of the idea of course! :slight_smile:

I understand that. I am simply saying that if a user sets their maximum to 5 Safecoin, but when they got in their actual contribution was 1 Safecoin, if the producer suddenly jumped what they requested from 10,000 Safecoin a month to 50,000 Safecoin a month and the donator’s contributions suddenly shoot up to 5 Safe from 1, it looks shady to the user, like the producer was trying to game them. This may cause users to start to distrust the app.

I agree that is the producer’s fault, but allowing for a system that raises on some increment of time would be helpful, and would seem more genuine to the userbase, as it is up front.

This also brings up another question that has been floating around for a while. The network has no concept of time, as stated by the developers, but there is certainly some need for time measurement for a ton of application concepts. I’m not sure if there has been a proposal to rectify that, yet.

1 Like

Hm no this really shouldn’t be possible. When the producer changes their request from 10,000 to 50,000, the individual donor(s) have their settings still at 10,000, then the donor(s) first have to each change their individual setting to 50,000 too. The donor who will pay 5 at most and is paying 1 now would only ever have to pay more (up to 5) when other donors reduce their their payment so far that the 10,000 (or whatever) can’t be reached by donating only 1.
…I probably should have tried to come up with some better names than “setting 1 & 2”. xD
Edit: I now call setting 1 the “donation-limit” and setting 2 the “donation-target”…not amazing names but I hope this helps in discussing this stuff. :wink:

OK, so you are saying the user would have to reauthorize a full 5 Safe at the 50K level if the producer changes the requested amount. I guess that makes sense, although how the math would work on that would be a little complex when you have some people who only authorized at the 10K level, and others at the 50K level.

Yeah that’s certainly true, when everyone has different settings this does get more complex.
(That’s why I overly simplified my post’s example so that every donor has the same settings. xD)

Seems like a great business idea or better yet free service worthy of earning PtD!

4 Likes

Also I agree, the system should preferably be able to handle more complex situations automatically.